CEO Forum - Q3/2003

10. How have the events of 9/11 affected the world wide PC market? We have seen a global recession in sales, but what specifically has inhibited growth in the PC community (particularly with US to Asia relegations)?

CEO #1: Logistics have been impacted for a while. The economy impacted by 9/11 event might be the major factor to have inhibited the growth of the PC market, but it should not be that long.

CEO #2: I do not believe that 9/11 is a major factor for the slow down. There is no urgency to upgrade PCs. Interest is shifted to PDAs, smart phones, etc...

CEO #3: Basically, of course, major accidents and events do affect every industry including PC. 911 and the Iraq war caused the PC sales dropped down for a short term like 3 months or so. The major factors included shipping processes, costs, and demand of the areas where it got affected. However, the economy will eventually come back to its normal scale.

CEO #4: 9/11 affected the PC market ONLY in two consecutive years. It is pure economic recession and uncertainty of the Mid-East area.

CEO #5: The business in the rest of the world is still growing, but for the USA, sales are indeed decreasing after 9/11.

CEO #6: People are getting conservative towards spend money.

CEO #7: In the commercial sector, most of companies cut IT expenditures because the WW (worldwide) economy has been quite slow in the past two years. In the consumer sector, there is no … applications to match today's PC power. No specific impact from 9/11, but we did see Asia's PC market impact by SARS in the past few months.

CEO #8: The "911" impacted the real purchasing activities. However, I think the major reason of the recession in the PC community is due to product life cycles being too short. New items had been brought to the market in huge [quantities], while practical applications didn't really come out enough. Situations like 'the Internet not having been put to full use' also leads to the lack of more applicable features/functions of the PC to be brought up.

CEO #9: Customers are likely to be conservative. In light of that, total IT spending or CapEx (capital expenditures) has decreased. The PC growth is limited. Currently, hardware performance is sufficient for applications. Demand for replacing PCs will drop.

CEO #10: I think the global economy situation would be more relevant, rather than a particular event happened almost 2 years ago.

CEO #11: I don't think the PC slump can be attributable to 9/11. There were many variables behind the PC slump.

We would like to make clear that this question is not to take away any of the outrage or travesty for September 11th, 2001. We along with others and the CEOs in this survey give our sympathy to the victims. The only thing this question asks is the effect of the event to the worldwide PC industry.

Many of the CEOs seemed to be indicating that 9/11 had a short-term impact on the worldwide PC market, if anything. The recession of sales worldwide was primarily blamed on other factors such as practical applications of technology and longer life cycles for products. Several CEOs saw 9/11 influencing immediate buying habits because of uncertainty, but it didn't do much other than curtail demand. They acknowledged the slow down of sales, but saw it limited to the United States. In their responses, there was not too much talk about how soon sales will bounce back, partially because they didn't see it decline because of 9/11 in the first place. Outside of 9/11, the bounce back of sales on other reasons will largely depend on consumer confidence and the practical applications of technology. At the moment, the fastest PC on the market is still a good deal ahead of any software on the market. Until software catches up, many will not feel the need to upgrade beyond what may just be necessary for them.

Interestingly in the minds of the CEOs, SARS seemed to be something that affected the PC industry more than 9/11. 9/11 may have affected demand, but SARS affected both supply and demand, since virtually all manufacturing of motherboards takes place in China and Taiwan. SARS made people physically scared to leave their homes and thereby affected immediate sales of most anything. Granted, China is very large geographically, but many of the areas that SARS afflicted were the places that much of the manufacturing for motherboard companies take place or have operations in (i.e. Guangzhou, Beijing, Shanghai, and Hong Kong).

Final Words

We would like to once again thank all of the participants for making this CEO Forum a reality. We hope that together we can improve the industry for you all to enjoy.