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Analysts warn of chip overstock, sales slump

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.

By Electronista Staff
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  1. danviento

    Fresh-Faced Recruit

    Joined: Dec 2005



    What? More economy fear-mongering? Let's spread the FUD on thick!

    "Poor economy" is the trendy excuse of today, instead of "we projected poorly, and didn't understand how likable products would be."

    That little tag that iPod sales didn't sag shold tell them something- people like good design and will buy it over poor design. In terms of holiday sales- that's been a "duh" fact for a while now. How the fact that people will splurge on items for others during the holiday season in our culture escapes some analyists makes me question their take on reality.

    The only FUD we should have related to the economy should pertain to Novemeber2008/January 2009 when there may be some radical additions to taxes. That's more likely to have an effect on people's incomes then a relatively small number of layouts. Go check your unemployment rate trends before citing that as an issue.

  1. robttwo

    Fresh-Faced Recruit

    Joined: Nov 2005


    spring forward

    And then in spring, after they have "cut back" they will claim - "demand now outstrips supply, we have to raise the price." Oil companies set the standard for this kind of "reporting." And we get screwed.


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