“The global economic slowdown is prompting companies to curtail technology spending and pushing consumers to favor mobile devices like Apple Inc.’s iPhone over personal computers, eroding profitability at Intel Corp. (INTC) and trimming sales for International Business Machines Corp. (IBM) .
Intel, the largest chipmaker, forecast fourth-quarter gross margins that missed analysts’ estimates, while IBM, the biggest computer-services provider, reported third-quarter revenue that fell short of projections. Shares of both companies declined in late trading yesterday and German trading today.
IBM customers, hurt by anemic demand in home markets, put off software purchases and computer-maintenance contracts. Budget-strapped consumers are shunning PCs to buy cheaper handheld devices such as the iPhone, while businesses are shying away from servers that run networks, sapping demand for Intel chips. The reports bode ill for Microsoft Corp., the No. 1 software maker, which releases results tomorrow.
“It’s not looking good out there,” said Alex Gauna, an analyst at JMP Securities.”