The cumulative impact of a worsening economy, declining capital investments and reduced consumer spending is strongly affecting the Japanese market. Although the Japanese market resisted for a while, it now looks like the PC market in Japan will be flat-to-negative into 2002.

The drivers are still there for PCs, and that should sustain the healthy growth in our forecast. But one of the primary drivers for our forecast is also portable adoption.

The general good news is that it's another strong quarter.

Although growth has declined slightly from the second and third quarters, the market's resilience in the face of rising interest rates, high fuel prices, a weaker Euro, and other potential inhibitors puts the market in a great position to start 2006.

This is a good first step. Gateway had solid year-on-year growth, ... Having strong results in the second quarter shows they are getting things in line and that they could have momentum in the second half.

Instead of a dramatic effect on PC shipment volume, the delay will probably have a larger impact on PC vendor and Microsoft marketing efforts that will need to be adjusted to fit the release schedule. That will add complexity and cost.

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.

Following the shocks of 2001 and 2002 many people were impressed with the strength of the market in 2004 but cautious about the foundation and longevity of this growth. The fact that solid double-digit growth has continued through 2005 shows that the market recovery did not peak in 2004 as many expected but is still ongoing.

It's a good question. Their results are certainly a sign that we should be cautious.

Although it is clear that consumer demand in the U.S. is weakening, buying in other regions remains strong. PCs remain the dominant means of accessing the Internet, and a lot of people out there are still buying PCs to get online.