Supply Chain Affirms Intel Statement: PC Market Bottoming OutBy Jessica Davis | Print
Supply chain checks for notebook PCs and desktop PCs show more strength than expected, adding support for Intel and Avnet's recent statements that we are getting close to a bottom in the recession for technology sales. FBR Research, which issued a report based on its supply chain checks, says it believes Intel's guidance for Q2 is conservative.
Recent statements from processor maker Intel (NASDAQ:INTC) and electronics and IT distributor Avnet (NYSE: AVT) that PC sales may have hit bottom may not be so far off the mark, even if processor maker AMD (NYSE: AMD) disagrees.
Supply chain checks this month into second quarter PC builds with the top five notebook original design manufacturers (ODMs) and the top four desktop motherboard makers both show improvements over checks from the previous month. FBR Research issued a brief report of the findings this week.
"For Q2 our contacts now expect notebook units to grow 14 percent quarter over quarter, better than our month-ago forecast of 10 percent growth," the company says in its report. "Desktop builds should decline 2 percent quarter over quarter, in line with our month-ago forecast."
FBR attributes the positive revision to the continued momentum for netbooks, and says that it believes Intel’s guidance for its next quarter was "conservative."
"We think Intel should grow revenues by 3 percent to 4 percent sequentially in Q2 (on the 7 percent sequential growth in PC builds), better than the firm’s sequentially flat revenue guidance."
However, not all the news is good for Intel. FBR Research says it remains concerned about the potential for Intel’s Atom processor -- the one that powers so many of the netbooks on the market today -- to steal away business from Intel’s more profitable and more powerful processors that go into standard laptop computers and desktop computers.
"We are concerned about the cannibalistic impact that the Atom processor may have on Intel as the firm ships many more chips (Atoms) that have fewer gross profit dollars per chip," FBR Research says.