Hard times persist in the PC market, but vendors are working diligently to stimulate growth and the outlook has started to improve in the United States and Europe.

They keep inventory low. They have very responsive systems, and they have maintained their growth momentum for a long time. In fact, over this whole downturn, they've maintained positive unit growth.

[HP has gotten a boost from newly acquired Compaq, which has had a strong foothold in those areas for years and has maintained a strong local presence in many countries.] HP is more established and has more distribution networks, ... Dell has been in the market less time, and they're focusing on core markets: U.K., Germany, and France. It's working fairly well for them.

We don't expect a rapid turnaround, but the seeds of recovery are being sown.

The global PC market is made up of many geographic, customer and product markets, many of which continue to show strong market growth.

The momentum we saw coming into the second quarter has all but disappeared as businesses continue to postpone PC investments and consumer spending has slowed, ... Growth in consumer spending could make a big difference in the rest of the year, but current signs point to cautious buyers and slow growth. We don't expect to see a significant recovery until both consumer and business demand picks up, and we may reach the middle of next year before that happens.