PC price erosion hits HP/National

PC price erosion hits HP/National
Richard Wilson Profits warnings from Hewlett-Packard and National Semiconductor have rattled the US electronics sector as the industry fears a dose of ‘Asian flu’ and trouble in the PC market. HP blamed a fall in second quarter profits on weakness in the south east Asian market which has been hit by economic uncertainty since the end of last year. That in itself has not been enough to hit the world’s second largest computer firm, which is also suffering from price erosion in PC markets around the world. National Semiconductor warned that fourth quarter results will be below analyst expectations. It expects to report a loss with sales lower by as much as 20 per cent compared with the same period last year. The chip maker also pointed the finger at poor demand from the PC sector. Coming in the wake of warnings from PC giants like Intel and Compaq the news from HP will do nothing to ease fears that the all-important PC market is heading for troubled times later this year. Like most suppliers HP is struggling to make real money from the cut-throat consumer PC market which it made an aggressive bid to enter last year.


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