Dog-Eat-Dog Shake-Out

Computer makers stumble through a glitch-filled week

The U.S. computer industry has been a source of profound national pride in recent years. While other parts of the economy have sagged, computer makers have maintained the tradition of American ingenuity and skill. But last week even they seemed badly shaken. Buffeted by plummeting profits, slow sales and excess capacity, the industry resembled a sophisticated data processor suddenly gone awry.

The manufacturers' problems are deep and astonishingly widespread. At midweek, IBM, the world's largest computer maker and the prototype of a successful company, shocked Wall Street by announcing that its earnings for the first nine months of this year will...

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