A Day After Dell, PC Sales Estimates Rise
Bargain-happy consumers boosted PC sales in the second quarter, and will probably do it again in the third and fourth quarters, market researcher Gartner reported on Friday.
But the expected sales bump may also challenge margins. That's because there are signs that component prices are beginning to stabilize, so OEMs will no longer have the luxury of passing their savings along to consumers, said Gartner analyst Kiyomi Yamada.
The stronger-than-expected second-quarter PC sales, which were noted by Delll (DELL) in its second-quarter earnings announcement earlier in the week, prompted Gartner to up its PC sales forecast slightly for the rest of the year, but its outlook remains cautious.
Worldwide PC shipments are forecast to reach 39.8 million units in the third quarter of 2003, a 9.6 percent increase over the third quarter of 2002. Gartner had been expecting sales to grow by 8%. Gartner analysts project PC shipments to reach 161.3 million units in 2003, an 8.9% increase from 2002. Its previous forecast was for yearly growth of 7.2%.Gartner's numbers include shipments of desktop and notebook computers, but not servers or handheld devices. While consumers purchased PCs, especially notebooks, in larger-than-expected numbers, business purchases remained unimpressive, and may stay that way for the rest of the year. "A sustained PC market recovery requires a return to business IT spending, which, in turn, is dependant on a significant improvement in economic conditions," said George Shiffler, principal analyst for Gartner's computing platforms and economics research. "Despite some recent encouraging signs, economists are still guarded in their outlook for the second half of the year, so the prospects for a significant business PC recovery by year end remain questionable." Also guarded was Dell CEO Michael Dell: Small businesses and consumers have reacted faster than enterprises to price cutting, he said. "There haven't been a whole lot of reasons for companies to increase their IT budgets," Dell said during a conference call. Roger Kay, an analyst with IDC, said his company's forecast won't be ready for a few more weeks, but he agreed that second-quarter PC sales were stronger than he had expected. He added that strong sales of notebook PCs to U.S. consumers will likely prompt IDC to raise its yearly PC forecast for the U.S., but the worldwide picture was still unclear.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV