Gartner revises PC market forecast, warns of downside
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The PC market won't grow as fast in 2004 as originally predicted by Gartner Inc. analysts, as concerns about the overall health of the U.S. economy weigh on the market, the market research company said Monday.
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A Gartner analyst today warned attendees at the company's data center conference to prepare by mid-2007 for a possible flu pandemic -- and figure out how to keep IT operations running, even during a quarantine lasting as long as 12 weeks.
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Gartner analysts are advising users to steer clear of Microsoft's low-cost alternative to Windows XP, Windows XP Starter Edition, saying that the lack of features will likely frustrate users due to its inability to grow with users as they gain experience.
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(InfoWorld) - Although a report indicates the world's largest PC vendor may be cutting back on some orders to PC manufacturers for the third and fourth quarters of this year, an executive at the company said the problem isn't in laptop PCs. A report published last week by Goldman Sachs Group said Hewlett-Packard cut orders to supply chain partners "mainly in desktop PCs and to a lesser degree on the notebook side," adding that the downward revision was "mainly from the U.S. with some from selected emerging markets, but so far no impact from Europe." The investment banking firm offered several reasons for the order pullback, including possible over-ordering, concerns of a potential end-demand slowdown attributed to the subprime problem in the U.S. and efforts to manage inventories ahead of the holidays. But a senior HP executive said it's business as usual in the company's laptop PC division. "There really has not been a slowdown in our order rate," said Ted Clark, senior vice president and general manager of HP's mobile computing global business unit. He said he could not comment on desktop PCs because that's not his area of expertise at the company. The PC industry has marked a stellar year this year with record shipments of laptop PCs in particular. But analysts and market researchers haveÂ grown more worried in recent weeksÂ that the weakening housing market in the U.S. and woes caused by risky home loans, called subprime loans, may cause consumers to slow their spending on new gadgets and computers. Most analysts say only time will tell whether theÂ housing issues have spilled over into consumer spending. The Goldman Sachs report is an attempt to gauge how consumer spending is affecting orders to PC manufacturers. Â
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Mixed economic news and forecasts of weak IT spending for at least the beginning of next year caused IT investor confidence to waver this week, though upbeat analyst presentations from Cisco and AT&amp;T and online e-commerce figures brought some cheer to the holiday season.Macroeconomic news is making technology investors uneasy. Wednesday morning, the U.S. Federal Reserve Board cut its federal funds rate in an attempt to allay fears that turmoil in the housing market would wreak further havoc in financial markets. But the move (a cut of 25 basis points) was not as great as some market observers hoped for and sent the tech-heavy Nasdaq Composite Index into a decline.Uncertainty in the U.S. is depressing IT spending forecasts. &quot;The economic slowdown we see happening in the U.S. will in fact translate over to slower growth in the U.S. IT spending market,&quot; said Andrew Bartels, principal analyst at Forrester Research, on a Thursday conference call with media and analysts.The good news, Bartels said, is that globally, IT capital spending should remain strong, U.S. spending should pick up again by the fourth quarter of 2008, and a real recession will likely be avoided.ComScore, meanwhile, had good news about online spending. Almost $19 billion was spent online during the holiday season up to midweek, an 18 percent increase compared to the same period in 2006, the market research company said.Companies that appear ready to supply the infrastructure for e-commerce and Web 2.0 multimedia services gave investors something to cheer about this week.AT&amp;T, which is melding the telecom services and infrastructure of the former SB Communications, BellSouth, and the old AT&amp;T, gave a presentation that impressed analysts Tuesday, convincing many that the communications giant is poised to leverage a wide range of assets.In a research note, Christopher King of investment firm Stifel Nicolaus said that AT&amp;T has &quot;the premier set of assets in the telecom industry.&quot; Independent analyst Jeff Kagan noted in an e-mail report that &quot;10 years ago, the company was only into the local phone business and was just getting into long distance and DSL. Today, it is a full featured company offering local and long-distance telephone, wireless, high-speed internet, and even television.&quot;The presentation came a day after AT&amp;T announced that it has expanded its 40G IP/MPLS backbone network to more than 50,000 miles in the U.S.AT&amp;T shares closed at $39.46 Tuesday, up by $1.56, and continued to move up over the next few days.Cisco&#39;s analyst presentation on Tuesday also drew good reviews. The company has a good track record of predicting trends and executing product strategy accordingly. The company announced, for example, that&#160;it will debut next year its Entertainment Operating System (EOS), a platform for multimedia content for online communities. Its unified communications product strategy and expected enhancements to its software offerings should also make its product suite more central to the corporate data center.Lehman Brothers sent out a research note saying that the company is well-positioned to offer products supporting the new generation of Web technologies. Cisco shares rose $0.46 to close at $28.08 Tuesday, and continued to move up during the week.In a shaky economy not all companies and sectors will perform well, and big questions surrounded chip maker AMD at its analyst presentation Thursday. The problematic launch of its Barcelona quad-core chips, which are still experiencing production delays, has shaken confidence that the company can make an effective counterpunch against Intel.Company CEO Hector Ruiz said that the company should break even by the second quarter of 2008, helped by -- among other things -- new graphics chips. But analysts are worried that may be too little, too late, to stop a market share slide. With product sales in doubt, the promise of cost controls was not enough to win over investors. AMD shares declined by $0.13 to close at $8.84 Thursday.
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(InfoWorld) - Timed stock market trades will go awry. Manufacturing lines will grind to a halt. Perplexed executives will hold court before empty conference rooms. These are just a few of the doomsday scenarios that have been tossed out in advance of Daylight Savings Time, which has been bumped up by two weeks this year by order of the U.S. Congress.  The warnings recall the Year 2000, or Y2K, hysteria that reigned at the turn of the Millennium, when some worried that the computer systems that were programmed to recognize two digit years and that were used to run just about everything would suddenly stop working. But executives and enterprise IT professionals contacted by InfoWorld say that the Daylight Savings Time (DST) change, while a nuisance, is no Y2K, and they expect few disruptions to their businesses come Monday. The new, accelerated time change is the result of the Energy Policy Act of 2005, which lengthened Daylight Savings Time in an effort to curb U.S. fuel consumption. IT vendors and industry groups recognized the potential for confusion, with many operating systems and applications programmed to use the old Daylight Savings Time date, and started warning about potential disruptions from DST just after the New Year. In a February alert to its members, the IT ISAC (Information Sharing and Analysis Center) said that the new Daylight Savings Time could "affect all consumers from home users to large enterprises," with problems ranging from missed appointments to system failures where correct time stamps are needed to store, monitor, or operate critical infrastructures. IT-ISAC members were encouraged to identify any systems that were time dependent and request patches for affected systems. Large platform vendors like Microsoft have also been sounding the alarm on DST in recent months, especially about the impact of the change on older versions of Windows and Microsoft Office. Windows Vista and Office 2007, released in January, are programmed to use the new DST schedule. "We've heard a wide spectrum of comments from customers," said M3 Sweatt, chief of staff for the Windows Core Operating System Development Group. Some companies have been working on the problem since last November, when Microsoft first issued patches for Windows to address the time change. However, other firms have waited until just recently to tackle the DST change, he said. "Some companies look at this as an extraordinary situation, whereas some have just incorporated it into their regular maintenance windows," he said.  One of the companies treating it as an extraordinary event is Microsoft, where administrators designated a whole weekend to roll out DST patches across the company's infrastructure, he said. More recently, Microsoft set up a Web site for customers with information on the implications of the time change and links to product patches and other advice for consumers, as well as IT professionals. Despite two years of lead time, however, the Daylight Savings Time issue only made it onto the radar at many enterprises in the last week or so, after the press began covering the issue more closely, said Patrick Foxhoven, CIO of CentraComm Communications, a managed security services provider in Findlay, Ohio. "The biggest headache has just been clients contacting us who are concerned because of all the hype," he said. Centracomm said that it was initially concerned about the impact of the daylight savings time change on security event correlation tools that it uses, but has since then received patches from the necessary vendors, as well as infrastructure vendors it depends on like Juniper Networks. Centracomm is ready to go for the DST change, as are the systems it manages for its customers, he said. But over at Ce De Candy, in Union, N.J., Daylight Savings Time may result in the burning of some midnight oil before Sunday, said IT manager Rick DePinto. "It's a big pain in the neck," said DePinto, who said changes to the company's payroll system and a matrix of Microsoft patches still need to be implemented. Ce De pays its workers hourly and bases the time worked on a time clock system that takes the information from the clocks and uploads the data to the program on a PC, which in turn uploads it to the ERP system on the back end. "All of these time-related payroll issues have to adjust when daylight savings goes into effect," said DePinto. Unfortunately the instructions Ce De got from the payroll vendor are not clear on what needs to be done. "We've been spending a lot of man hours on this," DePinto said. Scheduling anything in Outlook is also a problem. Shift schedules and appointments are all done in Outlook and there isnât one simple patch from Microsoft. "They have a multitude of different patches that you have to download and it is very involved," DePinto said. For now, changes to Outlook are being done manually at Ce De. Although there is a patch that will push out a change to all the desktops, installing it so complex that DePinto prefers to let his team update the PCs one desktop at a time.Â  Still, most enterprises are taking the change in stride and betting that disruptions, if they occur, will be minor, according to those interviewed by InfoWorld. "It is not on a Y2K scale," said Ray Repic chief technical architect at Coca-Cola Enterprises. "The only item that is a bit of a pain is with our calendaring capabilities for people who have scheduled meetings out beyond March 11." "To be honest, I've been so busy, I haven't even thought about it," said Sean Marsh, CEO of One Mortgage Network. Marsh said that outsourcing much of One Mortgage's IT operations and using service-based software like Salesforce.com has spared him some worry about the DST issue, but he's betting the downside won't be catastrophic even if he's caught unprepared. "The reality is, a one-hour difference is not going to cripple our company," said Marsh. In a worst case scenario, IT staff can manually update systems that can't be patched, then turn off the Daylight Savings Time feature so that clocks are changed again when the old DST date comes around, he said. Ultimately, scheduling will be the biggest problem for companies that haven't addressed the DST issue, so enterprises should make workers aware of the change at the very least and scrutinize appointments and meetings in the weeks in between the new March 11 Daylight Savings Time change and the old DST change in April. "The Boy Scout's model is to be prepared, and I think that's a good model for this: Plan ahead and be prepared," Sweatt said.
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Dell raced further ahead of rival Hewlett-Packard in the worldwide PC market during the third quarter, according to new research. In separate reports released on Monday, Gartner and IDC both found that the
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A Gartner Group report on PC hardware sales in emerging global markets has stirred up controversy in both the open-source and proprietary software worlds. Eighty percent of personal computers sold in Asia, Latin America and Eastern Europe that ship with the Linux operating system eventually will be running a pirated copy of Windows, predicts Gartner.
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(InfoWorld) - This week, the biggest market declines since the Sept. 11, 2001, terrorist attacks in the U.S. caused a crisis of confidence in sectors including technology, leading IT investors to reassess what's in store for the year. Considering that most analysts are predicting moderate -- about 6.5 percent -- global growth in IT product sales this year, vendors have been riding high recently. Key technology suppliers reported better-than-expected earnings in 2006, and IT companies in general enjoyed seven straight months of market gains capped last week by a six-year high in the tech-heavy Nasdaq exchange. But share-price gains for this year were wiped out this week as a precipitous decline in Chinese markets Tuesday led to panic selling around the world. The Nasdaq closed Tuesday at 2407.86, down 96.66 points for the day and 117.08 down from its six-year high last Thursday. The question for IT is whether the decline signals an overdue correction for valuations on technology suppliers: Given the modest prospects for overall revenue growth, have investors been a little too exuberant? "Yesterday's 3-5 percent drop in the popular stock averages is a wake-up call for a market that had become far too complacent, in our view," said Banc of America Securities analyst Tom McManus Wednesday. The Nasdaq slid again Thursday asÂ Dell reported disappointing results for its fourth fiscal quarter ended Feb 2. Dell posted net income of $673 million, compared with $1.01 billion a year earlier. Revenue declined 5 percent from a year ago to $14.4 billion. Analysts polled by Thomson Financial had been expecting $14.9 billion in revenue. Despite the warnings and the grim news from Dell, however, there still appears to be underlying confidence in the tech sector. For example, traders applauded Oracle's announcement Thursday thatÂ it would buy business intelligence software vendor Hyperion SolutionsÂ for $3.3 billion. Oracle shares closed at $16.78, up by $0.35. This is a big endorsement for strength in that sector. Often, an acquiring company suffers share price declines on the assumption that a big buy will negatively affect earnings even in a healthy market. And on Thursday alone, companies in various sectors of IT received kudos from analysts in the form of stock forecast upgrades. CAD maker Autodesk was upgraded to an outperform rating by Robert W. Baird & Co.; business software developer BEA Systems was upgraded from underperform to peer perform by Bear Stearns & Co.; and telecom equipment maker Ciena was upgraded from neutral to overweight by JP Morgan & Co., which noted that the optical market continues to recover faster than expected. Soothing remarks about the overall U.S. economy from Federal Reserve Bank Chairman Ben Bernanke to Congress on Wednesday also helped prevent a further big decline in markets. He said he was still looking forward to "moderate" overall growth this year. So far, "moderate growth" has been good enough to stoke investments in IT. If that's an indication of things to come, this week's sharp declines might end up being seen as only a brief correction.
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NEW YORK - US stocks are seen in a contemplative mood Friday with the revised second-quarter gross domestic product reading likely to have a large bearing on sentiment and overall direction.
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PC shipments have started to ease off, as expected, but the worldwide PC market remained fairly strong in the third quarter, according to research from IDC and Gartner released Monday.
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(InfoWorld) - Contract chip makers will have a worse time than expected this year, market researcher Gartner said Monday as it revised down its revenue growth target for 2007 to 5.1 percent. A weak first quarter hit the industry harder than expected as growth declined 12.5 percent compared to the previous quarter. Although a recovery for the industry is underway, revenue growth will be far worse than the 16.7 percent growth the industry achieved last year, Gartner said in a report. Next year will be a boom year for contract chip makers, but the market researcher did not provide a firm prediction. Part of the first quarter drop was normal for the time of year. Holiday shoppers tend to take a breather in the first three months of the year, so sales of a number of electronics typically fall. But contract chip makers have also faced a chip glut, which caused some companies to reduce orders. Chip shipments by contract makers fell by around 3.8 percent sequentially in the first quarter, Gartner said, while average selling prices slumped about 9 percent. Fewer high-end chips, which command higher prices, were ordered during the quarter. The market researcher said the weak quarter marked a bottom for the industry. Chip makers have largely agreed. The world's largest contract chip maker, TSMC (Taiwan Semiconductor Manufacturing Co.),Â posted its worst quarter in nearly two years in the first quarter. But it said the industry bottomed out during the quarter and will improve as the year goes on because demand is improving and the chip glut has eased. The company's top rival, United Microelectronics also called the first quarter the low point for the year. "Following two consecutive quarters of decline, we estimate that the foundry market will grow 11.9 percent sequentially in the second quarter of 2007, mainly because of inventory replenishment and a better pricing environment," said Gartner. The communications segment is leading the recovery, while demand for consumer electronics is also reviving, the market researcher added. Last year, TSMC, which founded the contract chip-manufacturing or foundry industry in 1987, took a 45.2 percent share of the contract chip market with revenue of $9.7 billion, according to Gartner. Chip industry revenue totalled almost $260 billion last year, while the contract manufacturing segment accounted for $21.5 billion of that figure.
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BOSTON - The semiconductor industry remains on track to record a significant increase in revenue during 2004, according to Gartner Inc.'s latest forecast for the year released Tuesday. After that, however, the outlook takes a turn for the worse.
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Investment bank HSBC has revised  downward its forecast for 2007 economic growth and cautioned  that the risk of an outright recession is growing as a retreat  in housing threatens household balance sheets.
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In the endless war of words and numbers between Windows and The Rest, Gartner has chipped in with a paradoxical observation. Forty percent of PCs sold with Linux installed are subsequently hosed clean and
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MacCentral - The PC market won't grow as fast in 2004 as originally predicted by Gartner Inc. analysts, as concerns about the overall health of the U.S. economy weigh on the market, the market research company said.
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A Gartner Inc. report predicts that SAS hard drives are on the verge of replacing models based on older Ultra320 technology