IT channel thrives while PC sales struggle

Moment of truth?

In any economic cycle you get some periods of especially intense speculation, and we appear to be in one of those now. Over the past couple of days we've brought you macroeconomic news contributing to fears of a double-dip recession in the UK, but global technology industry is also producing some mixed data right now.

On the positive side, the world's biggest tech distie - Avnet - reported record revenue last quarter and this is mirrored on a local level by smaller disties like Castleford-based Target Components. Additionally Cisco has recently announced decent results, but many were hoping for more and its outlook for the next quarter was cautious.

And it's the next quarter that seems to have investors spooked. There have been a spate of analyst downgrades of PC related stocks resulting in a sustained sell-off over the past few days. We took a snapshot of share price changes since the beginning of the week while writing this piece, which you can see below.

Adding to this anxiety is evidence that orders for PCs are plummeting. Ominous analyst statements have been joined by a couple of reports from Digitimes, suggesting big drops in notebook orders from Taiwan and tough times for notebook giant Acer.