Global notebook shipments have grown by about 25% annually on average over the last five years, and the trend is expected to continue with the advent of netbooks and continuing shift from desktops to notebooks. This trend is expected to benefit notebook manufacturers like Dell (NASDAQ:DELL), HP (NYSE:HPQ) and Apple (NASDAQ:AAPL).
We currently have a Trefis price estimate of around $17 for Dell’s stock, about 40% above the current market price of $12. We estimate that Notebooks and Netbooks constitute around 20% of Dell’s stock.
In the past, Global Notebook shipments increased from 49 million in 2004 to 150 million in 2009 . There has been a significant shift from desktops to notebooks in the last few years with Q3 of 2008 being the inflection point when notebook sales outpaced desktop sales. Notebooks are gaining increasing popularity over desktops due to their improving performance and falling price points. Netbooks and mini notebooks are even more economical with prices as low as $200.
The average of forecasts for Global Notebook shipments created by Trefis members indicated a projected increase from 156 million in 2010 to 233 million by 2016, compared to the baseline Trefis estimate of an increase from 157 million in 2010 to 238 million by the end of the Trefis forecast period.
The member estimates imply a downside of 1% to the Trefis price estimate for Dell’s stock. The slump in U.S. economy has greatly impacted consumer spending, and slower economic recovery could result in slower growth in Global notebook shipments.
You can drag the forecast trend-line above to express your own view, and see the sensitivity of Dell’s stock to Global notebook shipments.
 Historical global notebook shipment numbers are based on public data from market research firm IDC.
Disclosure: No positions