The PC industry was good to investors in 2004, despite a slow start. Dell ( DELL) and even troubled Gateway ( GTW) sported advances on Wall Street of 25% and 41%, respectively, while a reinvigorated Apple Computer ( AAPL) appreciated by an astonishing 212% by mid-December.
All three of the sector's publicly traded pure plays were helped by a second-half rally that floated a lot of technology boats, and by strong sales of PCs as well. Market researcher IDC estimates that worldwide sales of desktop PCs, notebooks and low-end servers will have increased by 14.5% by the time the ball dropped in Times Square.
|Apple's 2004 Shine |
iPod mania sparked a massive surge
Apple, of course, is becoming less of a computer company every minute -- and is therefore less vulnerable to the ups and downs of the PC market. In its fourth quarter, for example, sales of Apple's hit iPod music player and related services such as iTunes accounted for 27% of the company's total revenue. In the December quarter, when consumer-electronics items top holiday shopping lists, the iPod will contribute 32% of the company's revenue and about 26% of gross profit, estimates Goldman Sachs analyst David Bailey.
The coming year is not likely to be a replay of 2004, but that's not to say it won't be interesting.