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Sat, Nov 15, 2008 - Page 10 News List

Analysts slash 2009 PC sales forecasts

ADJUSTMENTS:Analysts said netbooks may be the only form factor to post substantial growth, but it may not be enough to cushion the slowdown in notebook sales


Citigroup Inc, Credit Suisse Group AG and Goldman Sachs Group Inc cut their estimates for global personal computer (PC) shipments next year after Intel Corp, the world’s largest chipmaker, slashed its sales forecast.

“It is clear that the PC industry is feeling the full impact of global economic recession,” Richard Gardner, a San Francisco-based analyst at Citigroup, wrote in a report on Thursday.

The brokerage expects PC shipments to shrink 3 percent next year, revising its earlier projection for 5 percent growth.

On Wednesday, bellwether chipmaker Intel Corp issued a revenue warning and cut its fourth-quarter sales forecast by about US$1 billion, feeding concerns about IT spending. Earlier in the week, Best Buy slashed its outlook, heightening worries about consumer demand.

The PC industry may rebound in 2010 after Microsoft Corp introduces its next version of the Windows operating system, Goldman said in a report yesterday.

Goldman lowered its computer shipment growth forecast next year to 4 percent from 10.1 percent. Desktop shipments were predicted to decline 7 percent, versus an earlier estimate of a 1 percent drop, while laptops were forecast to rise 9 percent, compared with an earlier projection of 23 percent increase.

Low-cost notebooks, known as netbooks, will be the “only substantially growing form factor in the PC space in 2009,” rising 94 percent next year, Goldman analysts, including Henry King (金文衡) and Donald Lu (呂東風), wrote in the report.

“The PC slowdown is now appearing in all verticals and geographies, so we are adjusting all of our PC-related estimates,” Credit Suisse analysts, including Bill Shope and Elizabeth Borbolla, wrote in a report on Thursday. “Netbooks may provide some cushion for notebooks, but not enough.”

Analysts said both Hewlett-Packard Co (HP) and Dell Inc were slow to catch on to the year’s hottest technology trend — low-cost, ultraportable “netbooks” — at a time when Dell in particular has been sharpening its focus on consumers.

Dell is scheduled to release it earnings report next Thursday, while HP will report results on Nov. 24.

HP, with its recurring streams of revenue from services and printing supplies, may be able to better insulate itself from a decline in sales, and analysts expect the company’s recent purchase of technology services provider EDS to generate cost savings.

Analysts paint a different picture for Dell.

“Keep in mind that Dell has a much higher exposure to PCs than HP,” said Shannon Cross of Cross Research. “HP is much more diversified. Now, that doesn’t mean that HP is not exposed to consumer and corporate just like everybody else.”

Investors will be looking for signs of whether Dell will cut prices to gain market share and how HP plans to further diversify.

Forrester analyst Andrew Bartels said HP is better prepared for tough times, and that he expects the company to emulate IBM and push further into additional business areas.

“For Dell, in particular, it does not look good. For HP it’s looking a bit better because at least they have a couple of other lines of business.”

Apple Inc is Credit Suisse’s favorite PC stock, with an “outperform” rating, while Citigroup prefers HP over Dell and rates both companies “buy.” Goldman Sachs and BMO Capital Markets both downgraded Dell. Goldman recommends investors buy shares of Acer Inc (宏碁) and its manufacturing affiliate Wistron Corp (緯創).

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