Merrill Lynch lowers forecast for PC sales
The company now says PC sales will shrink by 6 percent in the United States and 17 percent worldwide this year, a situation aggravated by the World Trade Center disaster.
In a research report issued Friday, the bank predicted dismal global circumstances will lead to a decline in unit shipments, revenue and average sale prices. Recovery, the company added, is at least a year away.
"All of our checks continue to suggest that PC demand remains very weak, especially in the U.S., and could become even weaker before rebounding," the report says. "While we are not at all backing away from our growth thesis for the industry, we now believe that the engine will not gear up until early/mid (third quarter of 2002) in the U.S., vs. our original assumption of early/mid" first quarter.
The World Trade Center disaster has cast a pall across world economies and firmly closed the debate over whether a recession will occur.
The high-tech sector will likely be affected both short and long term. September is the crucial month for sales in the third quarter. While PC sales were slow before the disaster, the market had begun to return to its seasonal pattern, a slightly positive sign.
Since then, sales have plummeted, according to analysts and resellers. The effect of the sudden decline will likely show up in the quarterly results of PC companies but also those of chip manufacturers such as Intel and software publishers such as Microsoft.
Under its revised forecast, Merrill now believes worldwide PC shipments will come to 126 million units in 2001 and 132 million in 2002, down from earlier predictions of 140 million in 2001 and 155 million in 2002.
Revenue will decline by 17.6 percent in 2001 and stay at the same level in 2002. Earlier, Merrill said that revenue would decline by 13.7 percent this year and grow by 9.9 percent next year. Average prices will drop by 12.3 percent in 2001 and 9.5 percent in 2002.