achievement awards from PC Magazine at Comdex. With them (from l.): PC Magazine's Michael Miller; Ziff-Davis' Eric Hippeau; Masayoshi Son, of Comdex and Ziff-Davis owner Softbank; and PC Magazine's Dan Rosensweig. CAUTION PRODUCT GLUT, CONFUSION CITED AS MAIN FACTORS REIGNS AT COMDEX;

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LAS VEGAS-The short-term outlook for the computer industry isn't so hot.

The industry's long-time boom shows signs of short-circuiting. There are signs of a glut of home PCs in stores, while many business buyers are sitting on the sidelines because of confusion over software. Prices and profit margins have been skidding, leading many major technology marketers to tighten ad budgets.

One troublesome indicator: Traffic last week at Comdex/Fall, the industry's big show, appeared to be down. Japan's Softbank Corp., which paid a whopping $800 million for Comdex last spring, reported record attendance of 205,000 people. But many Comdex veterans don't buy that.

"Traffic is definitely down," said Brad Chase, general manager of Microsoft Corp.'s personal operating systems division.

To be sure, Comdex traffic is not a precise economic indicator. Long-term prospects for the digital age remain healthy. In his keynote talk, IBM Corp. Chairman-CEO Louis V. Gerstner Jr. predicted "no limits for at least a decade to the underlying technologies that drive our industry."

And short term, PCs and software should continue to break sales records. But growth may not reach the dazzling double-digit gains that many in the industry have been counting on, which could lead to price wars.

"Right now I would use the word `cautious,"' said Marlene Williamson, VP-marketing at Acer America, one of the fastest-growing PC sellers. "That's the feeling from our retailers. People are just waiting to get a better deal."

Retailers bought too many copies of Windows 95, ignoring what Mr. Chase says was Microsoft's more cautious forecasting. Now, many stores are loaded with PCs that could take into next year to sell out. "It will be interesting to see what kind of sell-through there is," said R. Scott Miller, an analyst with Dataquest, San Jose, Calif., who is increasingly concerned about near-term prospects.

In the business market, many customers are holding back on PC purchases while they debate whether to move toward Microsoft's Windows 95 or an upcoming version of the more powerful Windows NT. "A lot of these folks are in technical purgatory" deciding which way to go, said Dan Ness, an analyst with Answers Research, a Solana Beach, Calif., research company.

In advertising, many big players are holding the line, in part to deal with declining profit margins. Intel Corp., Apple Computer, Compaq Computer Corp. and Novell all plan either small or no increases in ad spending for the next year. Micrografx, marketer of a popular line of graphics software, is shrinking its ad budget to about 5% of sales from about 9% in the past.

There are exceptions. Acer, for example, will expand its budget next year to move into TV, the medium that's been getting most of the recent revenue gains from computers. Prospects for computer magazines are less assured.

"I think they've peaked," said an executive with one major computer publication. But flat pages still would leave the category extremely robust, he noted.

Against this backdrop, one more global powerhouse, Sony Electronics, unveiled plans at Comdex to enter the home PC market next fall. President Carl Yankowski has a modest goal: industry leadership, meaning he'd have to pick off Packard Bell Electronics, Compaq, Apple, IBM and Hewlett-Packard. "There's not a market I want to be in where I'm not No. 1 or No. 2," he said. "But I recognize when you're new in a market it may take a little longer to get there."

Sony will work with Intel on the PCs and future devices to be determined. But Sony has failed three times before in PCs, and it will have to price and advertise its wares aggressively to break into the category. Lowe & Partners/SMS, New York, is Sony's agency.

Sony isn't really new to the business; it supplies many components and has assembled PCs for Apple and Dell Computer Corp. Still, to the mass market, "Sony is an unknown in the PC industry. And for those who do their research they are a failed entity," said Robin Raskin, editor in chief of FamilyPC. "Odds are against it working."

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