Technology issues may feel pressure

NEW YORK – Technology stocks have underperformed the rest of the market so far this year, and professional investors have reduced their commitment to the industry as a growing number of analysts question the outlook for what was once Wall Street’s flashiest sector.

Among its more vulnerable areas is the computer manufacturing industry; although Dell Inc., Hewlett Packard Co. and Apple Computer released solid third-quarter earnings, a recent report from Gartner Group, an information technology research firm in Stamford, Conn., predicts massive consolidation as a current wave of corporate PC-buying tapers off.

There’s a strong probability that three of the nation’s top 10 PC makers could be out of business by 2007, Gartner said. The report, released Nov. 29, did not speculate which companies might be affected by the consolidations, but suggested there simply would not be enough business in the future to support the current number of vendors.

“None of the companies is immune. Any one of them could have a problem,” said Leslie Fiering, a research vice president with Gartner. “With the lowered demand, you’re going to have a lot of vendors competing for smaller numbers of shipments and smaller amounts of revenue.”