Mr. Bailey: Our universe includes PC, server, and storage companies. From the companies' point of view, there is an increasing amount of convergence between these segments. For example, both Dell (DELL) and Compaq (CPQ) are trying to move beyond PCs and increase their focus on enterprise hardware, and Sun (SUNW) continues to bolster its storage offerings. So there's more overlap now than there's ever been before.
TWST: Over the past 12-18 months, how have the computer hardware stocks
performed?
Mr. Bailey: I think there's a great deal of variability between segments
and companies. However, generally speaking, the hardware stocks suffered
dramatic declines in late 2000 or early 2001 and have traded in a range
since that time. The PC sector was the first to fall, because demand
dropped off there late in the fall of 2000. In 2001, the stocks
rebounded somewhat from their lows, but not appreciably, because demand
remains weak. The enterprise vendors held out longer. They typically did
well through the first quarter of 2001 and then they also fell,
mirroring the decline in overall IT demand.
Tickers included in this excerpt: AAPL, CPQ, CRAY, DELL, EMC, GTW, HAND, HWP, INTC, MSFT, NTAP, SUNW
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