The UK director of IBM's personal systems group today blamed confusion over PC specifications for lower demand from major corporations.
Ian Boulton, the newly appointed head of the PC business, said: "People are saying they don't know what to do in the corporate marketplace" and admitted that, while IBM was gaining customers, the value of orders was down.
He said corporate accounts that had originally placed large orders for PCs were now downgrading these because of uncertainty over the rapid introduction of different microprocessors by Intel this year. This is making them unsure of which architecture to standardise on, and which processor Intel and its OEMs will develop for the corporate space.
"Customers are bringing in external consultants and trying to explain to them what the market's doing," he said.
IBM will make price cuts on its desktop machines next week and he said that added to confusion in the corporate market.
But a senior marketing executive at Intel UK said that situation will change by the end of the year. Chris Hogg said: "The Pentium II 350 will be the corporate machine by the end of the year." Hogg denied that there was an overstock of the older processors, Pentium IIs with MMX, in the market.
"There is a finite amount of MMX products since we stopped wafer starts six or seven weeks ago and there will be a changeover," he claimed.
Boulton also admitted that IBM's plan to move much of its assembly to distribution had not gone as well as the company had hoped.
He said: "SCH is signing up as an assembler but [the process] is moving more slowly than we'd like. We'd have hoped that the split would be 60 per cent this time last year."
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