Wall Street Journal: Consumer demand Recovery technology industry is stepping out of the trough

"Sohu It News" Beijing time August 31 news, according to foreign media reports, consumer recovery by the promotion of spending, technology companies are recovering from the worst recession in history. At the same time, it is hoped that the major companies will soon resume spending, technology companies are more optimistic about the future.

A gradual recovery in demand

Recent reports by several technology giants, although reflected by the recession, are still stronger than Wall Street analysts expect. The company's earnings show that demand for laptops and flat-screen TVs has improved, particularly in Asia, where the government's stimulus package shows it has boosted sales.

Intel's share price rose 4% per cent in Friday, when it raised its third-quarter revenue forecast by 6%. Despite a big boost, many tech companies have risen 50% per cent from their lows, but investors are no longer eager to drive up share prices as soon as they hear any good news, fearing that the economy will not be better off as capital markets recover. There is still scepticism about consumer spending and corporate spending.

Dell's second-quarter results for the 2010 fiscal year showed growth in the chain despite a year-on-year decline in revenue. The company's consumer business rose by 2% per cent a year, but business receipts in big businesses fell 3% from a year earlier. Apple, which has almost all its income from consumer business, has reported record results in recent quarters.

Dell CEO Michael Dell says he has confidence in the company because factors such as Microsoft's release of its new Windows 7 system will drive users to upgrade their hardware systems next year. "I can tell you now that things will be different next year," he said in a conference call. ”

However, it is still unclear whether it spending will improve for enterprise users. During the economic crisis, many companies chose to keep their old computer and server systems as much as possible. In addition, there are many signs that American consumers are still very cautious. Internet retail spending fell 1% in the two quarter from a year earlier, with e-commerce spending falling for the first time in the second quarter, according to the research report by the market monitoring agency comscore.

The Chinese market is doing well

Analysts say China's recent market activity has been more dramatic. China is the world's second-largest PC market after the US and has more buyers for the first time to buy PCs. In the two quarter of this year, Chinese consumers bought 11.7 million PCs, an increase of 14% per cent year-on-year. By contrast, the United States sold only 16.4 million computers in the same period, a slight decrease year-on-year.

The Chinese government's stimulus package also looks like a boost. One of the economic stimulus plans is to provide Chinese rural users with home appliance purchase subsidies. Lenovo Group has launched 15 new PCs, with a minimum price of $365 (about 2492 yuan).

Zhou Jie Jay Chou, an analyst at IDC, a market research firm, says other stimulus plans have had a bigger impact as they boosted PC sales in rural areas. Most of the current growth in PC shipments comes from rural areas.

In addition to laptops and desktop PCs, some consumers opt to use government subsidies to buy tablets, Unni Narayanan, chief executive of research at Primary Global, a marketing agency. "China's economic incentive spending is very important," said Dale Ford, an analyst at market research firm Isuppli, Dale Ford. ”

Opportunities and challenges for inexpensive PCs

Buying decisions have different effects on different players in the electronics industry's supply chain. Chip makers are usually the primary indicators of a rebound in the market, as manufacturers of PCs and other products issue orders for related parts based on forecasts and consumer demand. Suppliers are no longer being ripped off by overcapacity and falling prices, and are now working at full capacity to meet order requirements. So the price of equipment parts is also rising.

The rise in parts prices is not good news for PC makers such as Dell, which are a thorny issue with rising prices for parts such as memory chips and computer monitors. Another issue facing PC makers is the rise of low-end netbooks. Because prices are usually below 300 dollars, netbooks have a lower profit margin. Acer's two-quarter earnings, released in Thursday, showed the company's net profit fell 20% per cent from a year earlier.

The growing popularity of netbooks has led manufacturers to face the pressure of selling PCs at low prices. Hewlett-Packard clearly reflected the impact of the reduction strategy in the third quarter of its fiscal year 2009 in July. HP reported a year-on-year increase in PC shipments of 2% per cent over the quarter, but a 18% drop in revenue.

Another question is how much impact Microsoft's new operating system, Windows 7, can bring. Some of the features of Windows 7 have been positively evaluated, calling it faster. Some industry executives, including Dell, have predicted that Windows 7 and new office will drive customers to upgrade their hardware.