During the quarter, HP came out with a new version of HP-UX, its Unix operating system, and snagged a major contract to supply Amazon with equipment for its Web site. While corporate buying overall was seasonally slow, HP was able to sustain the momentum from its recent gains, said Amir Ahari, an analyst at US Bancorp Piper Jaffray. Carly has done what she can to align the company. On the other hand, HP, like the rest of the industry, is seeing intense competition erode margins. A substantial portion of HP's growth in computer sales was in retail, which is often characterized by thin margins.
Analysts are divided about the future of the PC industry as well.
Some, such as Charles Smulders, an analyst at Dataquest, have stated recently that the PC market is becoming saturated and that growth could begin to slow. Volume shipments are down from 1999. Other analysts, meanwhile, believe the industry is only going through one of its seasonal dips and will accelerate with the adoption of Windows 2000. Nonetheless, the company is optimistic about the long term. We are experiencing over time improved profits in our computer business.