UBS hardware analyst Maynard Um Friday morning raised his PC unit forecast for 2009 to a decline of 2.1% from 4.7%, to reflect a smaller-than-expected fall in the second quarter, and some PC market stabilization. Q2 units were down 4.2% year-over-year, he notes, rather than the 7.7% he had expected. For 2010, he now sees units up 8.8%, better than his previous forecast of 4.7%.
That said, he says the higher units in part reflect aggressive pricing. Um thinks the trend will continue through the back-to-school season, resulting in pressure on revenues and margins. On the other hand, he says rising component costs could lead vendors to increase pricing to protect margins - though that hasn’t happened so far - which would potentially reduce demand.
Um thinks the 2010 growth will be driven by a gradual enterprise refresh cycle, as well as improved consumer demand, driven by more design, fashion and technology oriented products.