Notes on the PC Market

Although Apple (AAPL - Analyst Report) serves a somewhat different client base, it does compete with Dell (DELL - Analyst Report), Hewlett-Packard (HPQ - Analyst Report) amongst others. The desktop market has declined significantly, and this will impact the computer companies and their suppliers.

Intel (INTC - Analyst Report) has announced their results and they were not good. Western Digital (WDC - Snapshot Report) and NVIDIA (NVDA - Analyst Report) have guided numbers downward; Sanmina-SCI (SANM - Analyst Report) numbers were disappointing; Sony (SNE - Analyst Report) is pointing to a loss.

Next week, Canon (CAJ - Analyst Report) will announce results (29 January). CAJ is a major supplier of printers to HPQ, and printer sales tend to follow computer sales.

We do not expect the situation to reverse itself in the next six months. A significant percentage of computer purchases are made by corporations, and capital spending lags corporate profits.

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