Weak Vista Launch Continues To Take Its Toll On Computer Industry
from the wow dept
The release of Vista was supposed to have been a boon for the computer industry, as many were expecting business and consumers to upgrade their hardware at the same time they upgraded their operating system. But, despite Microsoft’s claims to the contrary, the launch has generally been regarded as weak. The upshot is that makers of computers and parts are now being forced to ratchet down expectations. Yesterday, chip maker AMD warned of terrible earnings stemming from low volume and a brutal price war with Intel. Today, hard drive maker Seagate is getting slammed after it warned of weak demand and a difficult price environment. The company didn’t say it explicitly, but it seems that the whole industry may have produced way too many drives in anticipation of strong, Vista-driven sales that never materialized. Seagate, of course, has another challenge: convincing investors that its core business is not under threat from makers of flash memory. There’s no evidence that its troubles are related to competition from flash, but you can be sure that investors are keeping a close eye on the situation. If makers of flash memory continue to sail along, and prices in that space hold up fairly well, you can be sure that obituaries for the hard drive industry will be written once again.