This morning two of the worlds biggest computer vendors, Dell and Ingram Micro, are warning that demand for IT products was weakening, which in turn would hurt both corporate and consumer spending.
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“It sounds like things are really starting to slip everywhere. Both consumer and corporate end-demand are slowing. The question is how long it lasts,” said Cross Research analyst Shannon Cross to the UK’s Guardian newspaper.
And Dell said it seeing a further softening in global end-user demand, with that demand “not rebounding in September as it normally did”.
As for Ingram Micro, the world’s biggest computer products distributor, it has cut its third-quarter profit and revenue outlook, saying economic softness in July and August was continuing into September and “pressuring operating margins”, according to the Guardian report.
In Australia, according to one local IT vendor, the effects of a slowdown have been felt for some time now, regardless of what else is happening on Wall Street.
Steve Rust, the MD of Panasonic noted that, “due to the continually rising interest rates, corporate IT spend has been down for a while”.
“We have already seen the impact on both the consumer and SME market from this, however, whether the events from New York will have a further impact on IT spending is hard to tell. We will just have to wait and see”, noted Rust.
However in an interesting side note, Rust pointed out that companies such Panasonic that sell consumer items such as TV’s may well be buffered from the full effect of an IT meltdown since there is a “high demand for Flat Panels TV’s in this country, along with other AV products, especially leading up to Christmas”, which he notes” which may nullify the downward sales figures somewhat.
But not all IT vendors are putting such a positive spin on events. For example, storage vendor Seagate has also sounded the warning bells by noting that, “poor visibility about where the economy was heading was causing people to pull back spending plans”.
And adding to the IT industry’s woes was analysts firm Forrester Research, which forecast that tech spending in the US will grow at 6.1 per cent, down from its previous forecast estimate of 9.4 per cent.