These are testing times for PC manufacturers.
In Europe, in particular, there have been worrying signs of a slowdown in both consumer and enterprise expenditure on PCs over the last couple of quarters. And the downward spiral in prices has hit the profitability of even those manufacturers that are seeing sales volumes holding up.
Some analysts, while not exactly predicting the imminent demise of the sector, believe there is little prospect of an immediate return to good times.
Time Computers is a case in point. It is in the middle of an urgent review of its business after apparently running into financial difficulty as a result of poor sales, but the situation comes amid a backdrop of plunging profit margins in the market as a whole.
And Time's move is no mere tactical rejig, involving as it does refinancing talks with bankers HSBC. Possibly seeing the writing on the PC wall, Time is also increasing investment in its mobile phone retail chain, Timetalk.
Brian Marsden, the company's financial director, said last week that Time "cannot rely on [the PC sector] improving in the foreseeable future".
Winter of discontent
But Time is in good company. Shares in such PC luminaries as Gateway, Dell and Compaq have likewise been tumbling in recent weeks as a hoped for pre-Christmas surge in sales has failed to materialise.
Gateway, in particular, seems to have hit the doldrums. It has just issued a profit warning, which it puts down to slower than anticipated consumer demand.
Usually untouchable Dell is also struggling and has warned that its fiscal third quarter results will be lower than expected because of poor sales in Europe, while Intel has been mentioning similar problems for a while.
But perhaps the most spectacular situation has been that of Apple. After three years in the black, it has become customary to assume that the once moribund Mac maker is now feeling healthy again, following the runaway success of the iMac.
The company now says that it expects to lose around $250m between October and December this year, however, and blames a "swift industry-wide decline in PC sales" for the problem. Worryingly, this news comes only weeks after the launch of a new range of Apple hardware, which was widely expected to send its profitability up rather than down.
Apple's chief executive, Steve Jobs, is hoping to return the supplier to "sustained profitability" by the first quarter of 2001, but he clearly has his work cut out. What to do about piles of unsold inventory is perhaps his biggest worry.
The issue seems to have clear geographical boundaries, however. Only Europe and to some extent the US seem to be heading backwards, while sales in Asia's resurgent economies are rocketing. China, Japan, Korea and India in particular are experiencing something close to a PC fever.
On the back of such growth, worldwide sales in the fourth quarter will almost certainly exceed 40 million units, according to research company Gartner.
So what's Europe's big problem? Is its appetite for PCs permanently sated, or are we just experiencing a long blip?
There is general agreement that Europe's maturity as a PC market is at least partly to blame. Most affluent households already own a PC or two, and do not feel particularly pressured to upgrade them annually, while in the corporate sector, companies are showing an increasing tendency to squeeze maximum value out of their PC investment before junking it.
It has also been a wobbly year for European currency exchange rates and general economic prospects, thanks in part to a floundering euro.
More importantly, however, it seems that people's attitudes to buying technology are shifting, and so is the kind of product they favour spending their money on.
Peter Duschinsky, an analyst with IT World Consultants, explains: "It's a mistake to look at what's happening in the PC market in isolation, without considering what's going on in the IT world in general."
"These days, there are far more demands on a company's or consumers' IT spend than just PCs. In the corporate environment especially, there's so much more going on. One you've e-enabled your desktop, you will be wanting to focus your spend on the infrastructure than it's attached to," he adds.
Steady as she goes
Duschinsky believes that, in long term, the PC market can expect to remain at least stable if not experience the huge growth it has become accustomed to. "There will be no wholesale replacement of PCs by thin clients, and nor is everyone going to move over to renting their hardware and software on an application service provider model over night," he says.
But there is evidence that the old selling points that used to send people scuttling off to their PC dealers or high street retailers are changing. Chip speed and memory size are no longer key differentiators, according to Gartner. Physical size of hardware, direct relationships with manufacturers, good security mechanisms and low prices are now perceived as more important.
This means that vendors can't make people jump like they used to by just releasing a new generation of systems. They need to consider other things than just a hike in clock speed and an over-stretched hard drive. People are asking for mobility over power, usability over speed, security over specifications.
PC hardware and software requirements have also fallen out of rhythm. Some 70 per cent of users do not need PCs based on processors that are any faster than 600Mhz to 650Mhz, says Gartner, but try telling that to Intel or AMD.
So PC makers currently seem to face a choice - either get with what buyers really want, or prepare for eventual acquisition or extinction. Those hoping that things will miraculously improve, and that they will see 15 to 20 per cent sales growth and steady profits from basic desktop and laptop machines, are simply living in a dream world.
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