The Vise Trapping Pc Makers

Caught between rising chip prices and stingy consumers

It was beginning to look like another blockbuster Christmas for PC makers. With slick new products, low prices, and Internet service rebates that promised "free" PCs, record sales seemed certain. Until Sept. 21. That's when Taiwan was rocked by a horrific earthquake that disrupted America's big PC makers and other electronics firms from vital sources of supply. "This was going to be a huge Christmas, but suddenly there's a wet blanket on things," says Merrill Lynch analyst Steven Fortuna.

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