UBS Raises 2009, 2010 Forecasts for PCs

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Includes: AAPL, DELL, HPQ, MSFT
by: Eric Savitz

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.

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