updated 01:05 pm EDT, Mon March 10, 2008
Analyst on Chip Oversupply
An oversupply in the amount of electronics chips stemming from the holidays is the sign of a decline in demand for computers and handhelds, according to a new Gartner report sent out today. The research group warns that its index of surplus inventory around the world grew nearly 12 percent between the third and fourth quarters of 2007, largely due to poorer sales. As the downturn is likely to have carried over to this quarter and potentially the spring, many companies should deliberately scale back their extra stock to avoid being caught out by any further drops, the report notes.
Much of the sales slump is attributed to a poor US economy, which has led to wide-scale job cuts and reduced money to spend on computers and other devices. The shortfall is also believed to be creating a ripple effect which affects southeast Asia, Europe, and other areas that are dependent on trade with the US.
The Gartner study confirms previous information from the NPD Group, which noted that media player sales tumbled during the holidays except for the iPod. However, Apple itself is also suspected of having dropped flash memory orders for the near future, forcing many companies to drop their prices in an attempt to clear stock during the quieter post-holiday period.