Tuesday, February 8, 2011

PCs: Goldman Chops Outlook, Tablet Numbers Going Up

Goldman Sachs computer analyst Bill Shope today cut his outlook for personal computer unit shipment growth this year to 6.4% from a prior 8%, after reviewing the disappointing Q4 PC reports from Gartner and IDC.

Those reports showed growth of just 2.6% in Q4, with notebook computers, in particular, disappointing, turning in 2.9% growth versus the nearly 10% growth he had been forecasting at the time. Tablet cannibalization was the main culprit, he notes.

Hence, Shope raised his tablet computer estimate for this year to 60.1 million units from a prior 54.7 million, and raised his 2012 estimate slightly, to 80.3 million units from a prior 79.2 million. That’s assuming a roughly 35% rate of cannibalization of PCs, he notes.

However, Shope’s not changing any estimates for Hewlett Packard (HPQ), nor for Dell (DELL), as, “the
non-US PC OEMs appeared to bear the brunt of the industry shortfall in 4Q, which also serves to limit the impact of our lower PC forecast for HP and Dell.

Shope hasn’t changed his outlook on for Apple (AAPL) as regards the iPad: he still has Apple getting 64% of the tablet market this year, with shipments of 38.4 million units in calendar 2011, up from 14.8 million last calendar year. Shope had already revised those numbers higher after Apple’s quarterly report in January.

As for Intel (INTC) and AMD (AMD), Shope’s colleague, semiconductor analyst Jim Covello sees both at risk from the weaker outlook. Adding, that “we believe that Intel’s aggressive capex in 2011 ($9 bn or +73% yoy) will exacerbate the impact of lackluster PC unit growth, driving excess supply in microprocessors in 2012, leading to weak ASPs and margins.”

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