Key Metrics and Supply Alert

PURCHASING's Forward Demand Index surged to 65.6 in February as more than half (52%) of buyers reported plans to increase their materials buying volumes in the coming 90 days. The increase reflects a combination of stronger new order rates for finished goods, extremely thin materials

Check out global effort to standardize Internet buying protocols. An Electronic Procurement Standardization Technical Committee is being organized under the auspices of the Global Procurement Standards Organization and OASIS, the Organization for the Advancement of Structured Information Standards. For information, contact Michel Hoggard at operations@gpso.net .

The 2002 market gloom for supply chain management software SCM will carry over into 2003, driving more consolidation among vendors. That's the outlook presented by the analysts at Forrester Research Inc. So, to woo process-minded users, the researchers believe Oracle, Microsoft, and SAP will emphasize Web service platforms' capabilities over the functionality of supply chain management applications.

Global personal computer shipments are forecast to attain 8.3% growth in 2003, after rising just 1% in 2002 to 136.2 million units in the second year of weak demand. Market researchers at IDC expect purchasing improvements from the business and consumer sectors, which will offset a buying slowdown by government segments hamstrung by reduced budgets.

Semiconductor industry participants are predicting world sales growth of about 20% in 2003. "Weak end markets continue to depress the semiconductor industry, leaving scant opportunities for growth" in 2003, says analyst Richard Gordon at Gartner Dataquest. Global chip sales rose just 1.5% in 2002 to $155 billion following a 32% decline in 2001 to about $140 billion from a record $200 billion in 2000.

Hewlett-Packard CEO Carly Fiorina sees long-term sales growth for the company of 7-9%/year, saying the computer hardware sector never again will see past growth rates of 20, 30 or 40%. The pressure on prices is "relentless", she says, adding that the economic cycle has now reached maturity, so there will be constant conflicts between fewer but more competent supplier companies.

With cell phone handset demand looking up, the markets for key components like power amplifiers are on the mend after two years of decline, even though they now represent only about $2.02 for each handset sold, down from more than $3.35. Look for power amplifier revenues to increase from $832 million in 2002, to nearly $920 million in 2003, with gains projected through 2005.

After falling 19% in 2002, the market for mobile infrastructure equipment will continue to decline another 7% in 2003 due to another postponement in the installation of 3G networks. Carriers are not seeing reasonable consumer interest in 3G capabilities, says ISuppli analyst Jagdish Rebello.

The estimated number of Internet users worldwide reached 573 million on January 1, and the Aristotle Institute sees 1 billion users by the start of 2005. "The business consequences are monumental," says analyst Kevin Nepini, "since 95% of the buying power of businesses will be connected."