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Sent: Sunday, January 26, 2003 1:38 PM
Subject: 01/26 1:22P (RT) DAVOS-Tech chiefs enter 2003 with dim hopes
> 01/26 1:22P (RT) DAVOS-Tech chiefs enter 2003 with dim hopes
> Story 8045 (MSFT, DELL, CSCO, SUNW, IFXGN.DE, 30200.KS, PALM, INTC...)
> By Lucas van Grinsven
> DAVOS, Switzerland, Jan 26 (Reuters) - Technology executives
> scrambled to tone down expectations for 2003 this week after
> hard-learned lessons that their customers cannot predict the
> future.
> From Microsoft's <MSFT.O> Bill Gates to Michael Dell, the
> founder of the world's second-largest personal computer maker,
> few were prepared to predict a recovery in global demand for
> technology after the Internet bubble burst.
> "There's no big uptick," Gates told the World Economic
> Forum.
> "It's OK, but not good," said Dell, Chief Executive of Dell
> <DELL.O>.
> Many of the chiefs of the world's largest technology
> companies spent the past days in the Swiss ski resort, host each
> year to some 2,000 political and business leaders.
> The corridors have been full of talk of war on Iraq and the
> sluggish U.S. economy. But technology executives have been
> taking the pulse of their market, often in back-to-back meetings
> with customers, ranging from aircraft manufacturing bosses to
> the heads of global retail chains.
> John Chambers, chief executive officer (CEO) of U.S. network
> equipment maker Cisco <CSCO.O>, who prides himself on being
> close to his clients, stressed the volatility of the short-term
> outlook.
> A sales uptick like the one seen last spring, and which was
> widely seen as the beginning of a recovery, was followed by a
> slowdown after the summer.
> This was the reason why Scott McNealy, CEO of U.S.-based
> network computer maker Sun Microsystems <SUNW.O>, who had a
> better than expected October to December quarter, was hesitant
> to call a trend.
> "Anybody who thinks they can forecast has been proven dead
> wrong," he said.
> This did not prevent other executives forecasting how much
> money they expect to be invested in information technology after
> a virtually flat 2002.
> Infineon's <IFXGN.DE> Ulrich Schumacher, CEO of Europe's
> second-largest chip maker, who last year predicted that 2003
> would be hard to spoil after industry's worst-ever downturn, now
> said: "In Europe at least in 2003 I'm not very optimistic."
> REWARD ON BEING CAUTIOUS
> Some executives grumbled that the looming war in Iraq put a
> reward on being cautious.
> To be on the safe side most companies said they had
> tightened their belts and were investing even less in new
> technology compared with 2002 when many already cut their
> capital investments sharply.
> KT Corp. <30200.KS>, South Korea's largest fixed telecoms
> and broadband company, will cut investments by up to 10 percent,
> in a move that is typical for most telecoms companies.
> Eric Benhamou, CEO of handheld computer market leader Palm
> <PALM.O>, forecast modest growth in IT spending and a slight
> decline in telecoms investments.
> Top 10 chip makers like Intel <INTC.O>, STMicroelectronics
> <STM.PA> and Infineon, which are among the world's biggest
> spenders on new technology together with telecoms carriers, have
> already said they will trim budgets or keep them flat at best.
> Cisco's Chambers voiced the new reality when he said that
> "tech for the sake of tech is over."
> Carly Fiorina, CEO of the world's largest computer maker
> added that "this focus on value will be long-lasting." She saw
> no recovery in the U.S. economy yet.
> Gerard Kleisterlee, CEO of Philips Electronics <PHG.AS>, the
> world's largest consumer electronics maker, said he expected
> above average technology spending growth in areas such as
> healthcare and personal safety and security.
> Sun's McNealy added that technology still self-destructed
> after a while, which would continue to fuel demand.
> "Tech still has the shelf life of a banana. It will quickly
> go brown and mushy. There's an opportunity to keep developing
> because people will need a new banana," he said.
> ((Writing by Lucas van Grinsven; reporting by Lucas van
> Grinsven, Knut Engelmann, Stephen Jukes. Davos newsroom, +31 20
> 504 5019; email: lucas.grinsven@xxxxxxxxxxx; Reuters Messenger:
> lucas.grinsven.reuters.com@xxxxxxxxxxx))
> REUTERS
> Rtr 13:22 01-26-03
> Additional Codes ( STM.PA, PHG.AS, I/WEU, I/EUROPE, I/US, I/DPR, I/BUS,
> I/ELC, I/ELI, I/APL, I/RESF, I/TEL)
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