SAN JOSE, Calif. PC demand is starting off the year better than expected with Acer, Apple and Hewlett-Packard benefiting from the trend. In smart phones, Samsung and LG Electronics will ship many more handsets using Google Android and diversify baseband suppliers potentially benefitting Broadcom and Infineon.
Those were some of the conclusions from a recent Asia trips by a handful of analysts from Barclays Capital who reported on their findings in a conference call Monday (March 22).
PC demand better than expected
Barclays believes its current forecast of 16 percent PC growth in 2010 is "a bit conservative." A best-case scenario could see growth above 20 percent, said Ben Reitzes, head of IT hardware research at Barclays.
The Wall Street firm believes notebook sales could expand 27 percent this year. The business in the first three months of this year is outperforming its seasonal tendency to be down about ten percent he said.
Although the initial surge in 2010 could moderate by mid-year, "demand forecasts from customers like HP, Acer and Apple seem solid even into 3Q," Reitzes said.
Ones to watch: Acer, Apple, HP
Intel and Advanced Micro Devices should both benefit from a better than expected PC market. In terms of systems companies Acer, Apple and HP are the ones to watch.
"We visited Acer and are very impressed by their execution," said Reitzes. "HP and Acer are the big rivalry going forward, especially in China and others--with the exception of Apple--are on the outside looking in," he said.
Among the others, the analyst said Dell's performance has been "uninspiring" with orders weakening in the latest quarter. By contrast he was bullish on Apple's outlook for sales of Macintosh computers, iPhones and iPods.
"We still believe Apple is readying a major update to the iPhone this summer with key features that could include a thinner design with an updated camera and more multi-touch capabilities around the entire device--besides the screen--for ease of use," Reitzes said.
He said iPhone unit sales could grow 25 percent in the next quarter and another 55 percent in the fall due to the new designs. In addition, Apple could sell as many as 1.2 million iPads in the product's first quarter and more than two million a quarter once yield issues are resolved later in the year.
Android coming on strong
Plenty of new smartphones are on the way this year from Korea's top handset makers, and a large portion of them will be based on Google Android.
Samsung will release 40 new handsets in 2010, half of them based on Google Android, said Jeff Kvaal, a communications hardware analyst at Barclays. For its part, LG plans to release 20 new touch-screen smartphones targeting sales of as many as 80 million units, and 70 percent of those devices will be based on Android.
The trend is great for Google and its backers. But it could be a negative for Motorola which is betting its comeback in handsets on its ability to design standout Android phones like the Droid and as many as 20 follow-on handsets it has in the works, Kvaal said.
"With more Android players, tension for differentiation and fragmentation is likely to become more acute," he added.