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Analysts flatten computer growth forecasts

Posted: 25 Jun 2002 ?? ?Print Version ?Bookmark and Share

Keywords:computer? advanced micro device? pc? processor?

Wall Street analysts cratered already low growth forecasts for the computer industry in 2002-2003 to near zero this week following quarterly earnings warnings from Apple Computer Inc., Advanced Micro Devices Inc. and others. Computer performance continues to outpace user needs, said analysts, many of whom expect the traditional three-year PC upgrade cycle for business users to stretch to four years.

Lehman Brothers analyst Dan Niles lowered his 7 percent PC growth forecast for 2002 to 2 percent, and lowered the 2003 forecast from 9 percent to 6 percent. Lehman projects overall spending on IT will grow just 1 percent this year.

"This is worse than our expectations even a few weeks ago, driven by consumer demand, which seems to be weakening following better-than-expected strength in late 2001," said Niles in a research report released Thursday (June 20).

As for CPUs, "Historical patterns suggest PC processor unit growth as low as 8 percent in 2002 ?a far cry from the traditional norm of 17 percent to 18 percent," said Ashok Kumar, senior research analyst at USBancorp Piper Jaffray.

"The gap between the PC performance available and the performance that typical users demand grows wider. Call it the dark side of Moore's Law: performance continues to double every 18 months, whether we need it or not," Kumar added in a research note released Thursday.

Apple and AMD triggered the new round of gloom on Tuesday, when each lowered its quarterly projections. AMD pushed its quarterly revenue forecast to the $620 million-to-$700 million range, down from its original expectations of $820 million to $900 million. That followed a similar statement from Intel Corp., which recently said its current quarter revenue is likely to be $6.2 billion to $6.5 billion, down from earlier projections of $6.4 billion to $7.0 billion.

Apple lowered its quarterly revenue guidance of $1.6 billion to $1.4 billion, blaming soft consumer demand for PCs globally.

? Rick Merritt

EE Times

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