Rise in PC sales predicted

Increasing consumer confidence could lift the downturn surrounding the electronics market.

Hewlett-Packard, which has already cut staff and working hours to cut costs, has reported third-quarter revenue down 14 per cent on last year, with its consumer sector particularly badly affected. Consumer sales revenue was down a massive 21 per cent on the same period last year, while the business sector fell 11 per cent. But IDC analyst Logan Ringland said vendors could look forward to improvements in the consumer market, with a recent Westpac/Melbourne Institute survey showing consumer confidence picking up after a trough earlier this year.

"The consumer market is very sensitive to the overall welfare of the economy," he said. "With the Australian dollar strengthening, there are signs confidence is rising." Mr Ringland said reductions in interest-free periods being offered by retailers were also an indicator that the larger stores were expecting sales to pick up next year. But technology saturation was also an issue, with the absence of improvements in hardware meaning consumers were unlikely to upgrade their PCs. "Once broadband takes off there will be an increase in the number of people upgrading, but at the moment there is a degree of saturation". He said the business market was performing more strongly however, with corporations driven by a need to provide all their staff with computers.