Computer sales should jump up in the third and fourth quarters following their steep decline in the second quarter ended June 30, an industry research group said yesterday.
"Demand is picking up. It is not picking up at the rates it was before, but it is in fact picking up," said Jon Peddie, head of California-based Jon Peddie Associates, a market research group which has been tracking the computer industry for the past 16 years. He made the comments during a speech at the VIA forum in Taipei yesterday.
His firm forecasts the number of PCs sold in the third quarter will rise by nearly four million units over the second quarter, and a surge in fourth quarter will raise the total units sold to almost 40 million PCs, more than the amount sold during the same time last year.
Each quarter, the firm asks companies such as VIA Technologies Inc (
"If we know what chips are being shipped in Q1, then we can forecast pretty accurately what PCs are going to be in the channel in Q2," he said.
He blamed the slowdown in computer sales -- which has had a huge impact on Taiwan's exports -- on the fall of the dotcoms. A spike in computer purchases last year was due to the hysteria of the dotcom buildup, he said, which spilled over to manufacturers and stores who believed it would carry on, if not for the next few years, at least for the next few quarters.
"They were rudely awakened when they found out that wasn't going to be the case. Nonetheless, they tooled up, they expanded capacity, they added people and they built lots and lots of parts," he said.
When demand slowed, it was not just the consumer who pulled back, "it pulled back the outrageous spending habits that the dotcoms themselves were guilty of. And so the companies that were buying servers as fast as they could be built and PCs as fast as they could be built ... suddenly stopped," he said.
To aggravate the problem, a lot of the dotcoms went into receivership or bankruptcy and sold their computer gear at an extreme discount, competing with an already overstuffed market.
In the next few quarters, Peddie said demand would pick up in part due to seasonal factors. The third and fourth quarters are typically strong quarters because of back-to-school shopping and holiday-season purchases.
"It's not as if people have suddenly stopped buying PCs altogether, they're just not buying quite as aggressively as in the past," Peddie said.
He said another problem is that processor speed has outpaced software development. People still use computers mainly for word processing and spreadsheets, which do not require a chip such as the Pentium4.
One of the brightest electronics markets is graphics. Chips made to enhance images on computers and game machines are growing fast, Peddie said.
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