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Five analysts and top management from nine sector firms examine the computer hardware management sector in this special 47-page Computer Hardware issue from The Wall Street Transcript, available at (212/952-7433) or http://www.twst.com/info/info.484.htm

TWST: What were the key trends or issues affecting the group in 2001?

Mr. Chung: As for the iAppliance market, 2001 could be characterized as the year when everything that could go wrong did. The year was defined by a rapid change in demand patterns that led to heated price wars and rapid commoditization of the products, as well as each company going through company-specific issues regarding product transitions and new product rollouts. But by the end of the year, we’ve seen demand return to the iAppliance market and companies are taking positive steps forward with concrete plans to deal with the changed environment. Keep in mind, though, that the fundamental driver for the sector, the ever-increasing need of people to increase their access to information anytime and anywhere, remained strong throughout 2001. While we are not out of the woods yet, these changes bode well for the sector in 2002.

TWST: Are there any other stocks that you particularly like right now?

Mr. Chung: Our view is that while Palm (Nasdaq:PALM) had experienced a slowdown in 2001, the company is poised for a turnaround. The demand seems to be returning to the handheld space, and with a new CEO and a concrete and measurable turnaround plan, we believe that Palm has taken the first positive steps toward a turnaround. In addition to that, it’s rolling out several new products that could strengthen its competitive positions in several key market segments, specifically the enterprise and wireless space, where it has had limited successes to date. Moreover, there is a potential upside to the stock when Palm spins off its software company. Thus, with new product launches, strengthening competitive position, potential upside from the spinoff of its software business, as well as the management’s focus on the turnaround, we are positive on the stock at current levels.

TWST: Are there any new interesting products that the computer hardware companies are putting out for 2002?

Mr. Chung: In terms of iAppliances, we’ll see rapid introduction of converged devices. Basically, converged devices are devices that offer multiple functionalities that were only available in single pieces before. These devices combine stand-alone features from devices such as cell phones, PDAs, MP3 players and so forth into a single device. And we’ll see a lot of devices offered with different combinations of functionality.

This special issue includes:

1) Mainstream Computer Companies - In an in-depth (4,300 words) Analyst Interview, Andrew Neff, Senior Managing Director, Naveen Bobba, Associate Analyst, Ted Chung, Associate Analyst and William Hand, Associate Analyst, all respectly at Bear, Stearns & Co., examine the outlook for the sector including and share specific stock recommendations.

2)PC, Server & Storage Companies - In an in-depth (2,800 words) Analyst Interview, David C. Bailey, Vice President and Research Analyst with Gerard Klauer Mattison & Co., examines the outlook for the sector including and shares specific stock recommendations.

3) CEO interviews (average 2,500 words). Top management of nine sector firms examine the outlook for their firm and the sector.