Commentary: The Christmas shopping season is under way, and that means Wall Street's finest minds are watching your PC buying habits. In a game of one-upmanship, analysts are counting shopping carts in an effort to gauge PC demand. Gauging PC demand is a Wall Street fad. Every year -- usually Thanksgiving weekend -- some analysts head to Best Buy and other electronics retailers to count how many iMacs, Compaqs and eMachines are being sold. This year's ritual has gained more importance -- analysts have to show their research is deep and valuable in the land of Regulation FD. Yes folks, that guy hiding behind that aisle may be one of Wall Street's top gurus. The fact is that it's a bit too early to glean a lot of information about PC sales, but that hasn't stopped analysts from issuing a barrage of research notes. PC Data reported a 9 percent to 10 percent decline in PC unit shipments through the retail sales channel. That stat has put PC watchers on high alert. In a research note, Kevin McCarthy, an analyst with CS First Boston, noted that PC demand was mixed and indicated a potential drop-off compared to last year. "We surveyed floor sales personnel from 12 stores in a three-state area [New York, New Jersey and Texas] and the general theme of their responses was mixed with respect to weekend demand," he wrote. McCarthy reckons that there is no dominant trend this holiday season and we'll see "slightly below average" PC sales. Below average means 7 percent consumer growth compared to 38 percent in 1999. He noted that Compaq's all-in-one PC, which sells for $899, is a big seller, along with Apple's iMac. However, folks weren't walking out with many of Apple's G4 Cubes, and McCarthy expects the company to advertise aggressively to lower inventory. Not to be outdone was Salomon Smith Barney analyst Richard Gardner. He issued a research note that warned about Apple, Compaq and a few others. "Apple is working hard to clear out the channel ahead of January product announcements," he wrote. "The December quarter's operating loss may be wider than expected." Gardner's checks, which covered several Bay area retail stores, could indicate that inventory levels are up at a time when demand is down. "Most major PC OEMs are already stuck with one of two options: continue filling the channel to meet 4Q consensus expectations and pay with inventory write-downs during 1Q -- or scale back build plans for the fourth quarter and miss 4Q expectations," said Gardner. Here's the early line (we emphasise early) on the big consumer PC vendors: Apple: Gardner noted that Apple is flushing out inventory, which isn't news since the company already issued a profit warning. Apple is trying to juggle rebates and lower prices with falling component costs. Gardner noted that it's still too early to predict falling prices on the December quarter, but said he thought Apple could miss its revised guidance. G4 Cubes still aren't selling well, analysts said. Compaq: Analysts seemed to agree that Compaq is selling well to consumers. The catch is Compaq's inventory levels. Gardner was worried about inventory, but added it's too early to assess risks. CS First Boston was upbeat about Compaq's sales, which were strong in the third quarter. Analysts said Compaq may be moving more boxes than Hewlett-Packard. EMachines: Mixed signals on this PC vendor. CS First Boston said eMachines was selling well because folks want a good deal and a PC that can do just the basics. Gardner said eMachines inventory levels are a problem and discounting could wipe out a big chunk of the company's cash. Compaq and HP could make life hellish for eMachines in the retail wars. Gateway: Armed with what Gardner calls the best business model in the PC industry, Gateway is a player this Christmas with its Country Stores. Analysts said Gateway's quarter is on target, but it's early -- the period between Thanksgiving and Christmas represents 50 percent of quarterly sales. Merrill Lynch analyst Steven Fortuna lowered his sales estimates Wednesday and said he expects the company to give guidance on its quarter. See ZDII for US tech investor news. See techTrader for more technology investment news, plus quotes and research. Have your say instantly, and see what others have said. Click on the TalkBack button and go to the ZDNet News forum. Let the editors know what you think in the Mailroom. And read what others have said.