Thursday, April 19, 2007

US PC sales "sluggish"

From IBD:

The April index reading is almost 20% below the year-ago figure, and is 21% below the 12-month average.

Worse yet for the major PC makers — including Dell, (DELL) Hewlett-Packard, (HPQ) Apple (AAPL) and Gateway (GTW) — demand among some key customer groups has plummeted.

Planned PC purchases among parents sunk 32% in April from March. The purchase intent score for parents is at its lowest level since TechnoMetrica started measuring home PC purchase intent in April 2002.

Also hitting new lows for PC purchase intent were households with incomes over $75,000 and people with graduate or professional degrees. These groups are more likely to buy higher-end, feature-rich PCs, which carry higher prices and profits for PC makers, Kambanis says.

On a positive note, PC purchase intent among people 18 to 24 years old is at its highest level since the poll started five years ago.

IBD included this article so investors could get an idea of whether or not computer makers would be an attractive long of short. However, this information also gives us an idea of consumer sentiment going forward.

Retail sales are the only economic area holding the economy up. Because computers are a pricier item (with laptops still costing about $1000 per), consumer intent to purchase or not purchase these items gives us a clue for how confident consumers are going forward.

The drop in this number indicates consumers may not be that confident going forward. There could be a lot of non-income based reasons for this: Vista is unproven, it's too early to purchase for the fall semester etc... However, this number could also indicate consumers are either strapped financially or at least are pulling in their spending habits a bit.