Some of it was less than a year old and still in original shipping crates. But under the auctioneer's gavel, much of it sold for pennies on the dollar. Already struggling to reduce inventories and cope with evaporating customer demand, some high-tech equipment makers and their distributors are under attack from a third front. We used to be thought of as a last resort.
Trouble is, a domino effect in the industry is about to make the used-equipment glut much bigger.
Research firm AMR Research Inc. of Boston predicts about 500 of the mostly private 1,200 ASPs in the U.S. will survive 2001. The problem is most severe in servers and routers, although tech equipment such as PCS is also flooding the market. During the past six months, hundreds of Sun servers have been sold at the auctions of failed dot-coms. When the ASPs that served the dot-coms begin to fail in big numbers this year, they will flood the market with equipment that routes Internet traffic or connects digital subscriber line customers to their service providers. That's especially troubling because much of the equipment is new, or just one generation older than what' s now available.