Likelihood of Weak Sales by PC Makers In 1st Quarter Helps Depress Tech Stocks
Personal-computer makers seem destined for a disappointing first quarter, but evidence of a lasting drop in demand remains inconclusive.</br></br>Jitters about PC sales contributed to a sharp drop in many technology shares yesterday. The sell-off was partly triggered by comments from market researcher PC Data Inc., which on Monday said U.S. retail unit sales of PCs in February rose just 1%, while revenues dropped 16%. Later the same day, PC maker Micron Electronics Inc. reported a 24% drop in sales for the fiscal second quarter ended March 4.</br></br>Some of the revenue slowdown reflects rapid declines in PC prices. Some customers also appear to have held up purchases until they could buy machines based on a new chip from Intel Corp.</br></br>A more subtle factor, analysts and industry executives say, is that many investors appeared to be betting that computer spending associated with the year 2000 problem might stimulate PC purchases in the quarter. That now doesn't appear to have happened.</br></br>"It's clear that the first calendar quarter has not been as strong as everyone expected it to be," said Joel Kocher, Micron Electronics' chief executive officer. "I would characterize it as squishy."