Electronics

Last updated: April 2008

Overview

In 2007, global Personal Computer (PC) sales increased by 16%, with a big spike in demand for laptop computers. Gartner, a technology research firm, reports that PC demand in emerging nations comprised 60% of industry growth in 2007. The market for PCs is expected to continue to grow by more than 10% in 2008. Demand is driven by increased global industrialization and price points now affordable to the average consumer. PCs now routinely sell for $400 or less.

Industry Condition – Average

Key Industry Indicators

• High Cost of Oil, U.S. Economic Downturn and Potential Slowdown in China's Economy
• Manufacturers' Shipments, Inventories and Orders
  In March 2008, the not seasonally adjusted value of manufacturers' shipments of computers and electrical products increased 4.8% over one year earlier. The value of manufacturers' inventories remained steady over the same time period, up 0.3%.
• Advance Monthly Sales for Retail Trade and Food Services
  In February, estimated monthly sales for computer & software stores were down 3.0% over one year earlier.

New Equipment Demand

Every two or three months, there is a new "latest & greatest" computer with the best processor, most memory and/or sleekest design. As these new models enter the market, they are what is in demand. Meanwhile, there is a predictable reduction in pricing of previous models and a corresponding drop in the value of older, used equipment.

Overview

The market for used equipment is generally poor due to very rapid depreciation from functional obsolescence. With new prices steadily dropping and technology advancing, even exports to Central and South America are more challenging. Online sales of PCs have proven an effective means of remarketing used equipment. Salvage operations continue to process PCs to recover reusable components, such as memory, and to recapture precious metals.

Used Equipment Values – Poor

• Supply of used equipment – Stable
• Demand for used equipment – Decreasing

Liquidation Monitor

• Recent bankruptcy filings
  • SAN Holdings, Inc. (computer storage devices) filed on September 14, 2007
  • MTI Technology Corporation (computer storage devices) filed on October 15, 2007
  • PubliCARD, Inc. (computer peripheral equipment) filed on May 27, 2007
  • Silicon Graphics, Inc. (electronic computer manufacturing) filed on May 8, 2006
  • TriGem Computer, Inc. (global PC maker) filed on November 3, 2005

Factors Influencing Value & Marketability

• Age – 3 years or less
• Memory – 512MB desired
• Storage – 40GB desired
• Processor – P4 or better
• Obsolescence – Immediate and rapid depreciation due to technology changes

Valuation Monitor

AccuVal routinely provides appraisal, consulting, and asset management services to the Electronics industry, including manufacturers of computer equipment and components. All of our customers use computers and our appraisals usually include consideration of hundreds desktops and laptops – sometimes thousands! View industries serviced >>

Representative Clients Our Associates Have Served

• Packard Bell NEC, Inc.
• Four Media Company
• MEMC Electronic Materials, Inc.
• Intergraph Corporation

Success Stories

• Appraised and Liquidated Thousands of Computers
• Provided the Appraisal Work for One of the Largest Asset Based Loans Made to a Silicon Wafer Manufacturer
• Assisted Original Equipment Manufacturers with Asset Optimization Strategies
• View all Success Stories