Three IT Warning Signs
From "Money and Markets":"First, Phoenix Technology, the largest BIOS (Basic Integrated Operating System) software maker in the world has coughed up a huge hairball, warning that it would miss its quarterly expectations by a country mile. That sure got my attention because BIOS software is used to start up every computer in the world. When Phoenix, which has a 70% share of the BIOS software market, is having problems, it’s a giant red flag that something is very, very wrong in the PC world. Phoenix Technologies warned that its second-quarter sales would only hit $10 to $12 million, a far, far cry below its prior guidance of $24.5 million to $26.5 million. According to the company, “We have seen slower-than-expected Core System Software or BIOS sales ... as well as a change in the supply chain buying patterns of ODMs [original design manufacturers] due to a general inventory build-up in the PC market.” In other words, Phoenix’s business really stinks.
Bottom line: If PC makers are buying fewer BIOS systems, it means they’re making few computers. And that spells trouble for Intel.
Second, Hewlett-Packard, the second-largest computer maker in the world, announced on Thursday that it was going to close “several hundred properties.” Wow, that’s a lot of closures! And believe me, they’re definitely not doing this because business is booming.
Third, Dell’s business is still a wreck. The company is now going to simplify its pricing structure by reducing its promotions and rebates by 80%. The goal: Raising prices to boost its slumping profit margins.
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posted by G @ 8:44 AM
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