During a trip to China to discuss the planned opening of a PC manufacturing plant there, Dell chairman and CEO Michael Dell speculated that demand from corporate IT buyers for system upgrades could lead to a buying spree around the first quarter of 2002.
Also Wednesday, Microsoft group vice president Jim Allchin announced the release date for the new Windows XP operating system, pledging that its debut in time for the holiday season would drive consumer sales in the fourth quarter, especially for the Windows XP Home Edition.
"The holiday season is going to be great for the PC industry," Allchin said in a conference call about the release.
Microsoft and many other software and hardware vendors have been cautious about forecasting a recovery for the worldwide PC industry, which slowed to single-digit growth in the fourth quarter of 2000. During a conference call 19 April to discuss its third-quarter earnings, Microsoft lowered its expectation for this year's PC sales growth from 10 per cent to about 7 per cent.
"There are some indications that the PC market could be stabilising ... but we are very mindful of the effect a further slowing economy could have on the industry and Microsoft," John Connors, Microsoft's chief financial officer, said at the time.
But that sentiment is beginning to shift.
Dell told reporters Wednesday that his company expects to see a "sequential increase in the first and second quarters of 2002 over this year," as that period marks a logical time for corporate customers to begin replacing computer systems. But he also noted that uncertainties in the economy make it difficult to predict precisely when the recovery will begin.
A Dell spokesman downplayed the CEO's optimism.
"If folks are concluding a prediction about an industry rebound they're reading too far into his comments," said T.R. Reid, a spokesman for Dell. "We have made it very, very plain: We don't know.
"But we do believe it absolutely will rebound," he added. "And we see a variety of things driving demand. Windows XP is one of them."
Research firm IDC said it doesn't expect worldwide PC sales to return to double-digit growth until the first quarter of 2002, according to senior research analyst Anne Bui. While such data would point to further recovery in the industry, Bui cautioned that the figures could be somewhat misleading.
"The only reason it's going to be double-digit growth is because it will be compared to such low numbers this year," she said.
In fact, year over year growth in worldwide PC sales slowed to about 4.5 percent in the first quarter 2001 compared to the same quarter last year, according to preliminary figures from IDC. In the US, which accounts for about one third of worldwide sales, sales declined about 8 per cent in the first quarter from the same period a year ago.