Dell and HP pour cold water on slowdown talk

The two tech giants are trying to shake off slowdown fears.

Dell and HP have dismissed concerns about a slowdown in demand for technology, claiming business customers still have a big appetite and that there is only a hint of weakness from consumers.

Both faced questions this week about the strength of the recovery in spending on technology, after Cisco's chief executive John Chambers' warned last week about "unusual uncertainty" in the global economy.

Analysts said fears persisted about the strength of any recovery in consumer spending, as growth moderates in Europe and China as well as in the US.

But executives from the two largest US personal computer makers waved off such fears, even as shares of Dell fell three per cent after it posted slightly weaker-than-expected growth margins and HP fell about one per cent.

"We saw better-than-normal quarterly seasonality, as well as good balanced performance across all of our three regions," said Cathie Lesjak, HP's interim chief executive, on a conference call with the media.

Lesjak also fielded queries on a successor for former chief executive Mark Hurd - who stunned Wall Street by resigning two weeks ago over expense account inaccuracies linked to a female marketing contractor.

Though Hurd's exit has proved to be messy for the company, HP is doing its best to move on, naming an executive headhunting firm on Wednesday to lead the search for a new leader. The company will consider both internal and external candidates.

Lesjak said HP is "looking forward, not back" and reiterated that shareholders are behind the company. She also suggested HP was not looking for major change in a new leader.

"When you have a winning strategy, I don't see the motivation to change it," she said.

It is unclear whether HP will go for an established technology veteran, or try to snag up-and-coming talent - as it did in 2005 with former NCR chief Hurd, who is credited with reviving the company's fortunes.

Whatever the case, Wall Street will be closely monitoring the process. Hurd was lauded by investors for his cost-cutting, but the next chief executive of the world's top technology company by revenue will be expected to ramp up growth - no easy task for a company its size.

"Looking ahead, they're going to start running against tougher comparisons and potential currency pressures, so we're cautiously optimistic for the second half of the year," said Gartner analyst Martin Reynolds. "Although there are troubling signs, we think the technology industry will remain robust."

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