Why Microsoft, Intel Differ on PC Sales

It just doesn't make sense:

Microsoft

(MSFT) - Get Microsoft Corporation (MSFT) Report

gripes that corporate PC sales are softening, and

Intel

(INTC) - Get Intel Corporation (INTC) Report

claims PC demand is so great it can't make chips fast enough. (Puzzling, I say, damn puzzling.)

How can that be?

Simple, says Mike Kelly, who runs

Techtel

, an Emeryville, Calif., market-research firm that has been tracking PC purchasing data for 15 years: They're both dealing with different ends of the distribution pipeline. "Microsoft is looking at shipments to OEMs

original equipment manufacturers, whereas Intel is looking at orders from OEMs," Kelly says. The result, he says, is that while shipments from OEMs may be falling, Intel wouldn't necessarily know because there's a normal lag of several weeks before a slowdown in shipments translates into a cutback in orders.

But that doesn't necessarily mean there

will

be a cutback in orders. Kelly, who has proven to

this column to be a good read of the PC industry, says he believes the current slowdown (which his surveys have confirmed is real) will be short-lived. His surveys of PC buying by companies with 250 or more employees show that purchases over the past two quarters were indeed flat, after rising for the prior two quarters. Kelly attributes that to Y2K-related issues.

However, while demand hasn't been there, interest in buying new computers has been rising "steadily and strongly" for five quarters. And interest, he says, almost always translates into future orders. "That indicates latent demand," he says, "which means sales will recover."

Notable quotable: According to Kelly, interest is especially high for purchases of

Compaq

(CPQ)

,

Hewlett-Packard

(HWP)

and

IBM

(IBM) - Get International Business Machines (IBM) Report

machines.

Short Positions

Ancor's away:

The stock of

Ancor Communications

(ANCR)

leaped 66% yesterday after the company announced it won a contract to supply its fiber channel switches to

EMC

(EMC)

.

TSC/NYTimes

reporter Kevin Max

quoted one analyst as saying the stock had risen so much because short-sellers were covering. Maybe some are, but not those who have steadily been quoted in this column as questioning the quality of Ancor's biz.

What the shorts found so intriguing yesterday was that while Ancor won some biz with EMC, so did Ancor's archrival

Brocade

(BRCD)

. And according to what an EMC spokesman told my assistant, Mark Martinez, one of the reasons EMC took Ancor in addition to Brocade is to give customers a choice. And

that

, my friends, was worth nearly $400 million in additional market cap.

Some Transaction!:

Transaction Systems Architects

(TSAI)

,

no stranger to this column, reported dismal earnings Tuesday after the market closed. That's what sometimes happens to companies with revenue recognition issues, just like those mentioned

here earlier involving Transaction.

Herb Greenberg writes daily for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, though he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. He welcomes your feedback at

herb@thestreet.com. Greenberg also writes a monthly column for Fortune.

Mark Martinez assisted with the reporting of this column.