A variety of responses has been trickling in over the last 24 hours to yesterday’s reports from Gartner and IDC about slower-than-expected growth in personal computers in Q3.
Both firms reported PC units shipped rose by less than 4%, year over year, versus expectations for 4% to 5%.
Major PC names are mixed, however: Dell (DELL) is up 10 cents, or 0.7%, at $16.34, Hewlett-Packard (HPQ) is down 22 cents, or 0.9%, at $25.65, and Lenovo Group (0992HK), which seized the number two spot in rankings from Dell, is up 12 cents, or 2.3%, at $5.39 in Hong Kong dollars. Apple (AAPL), which had the strongest growth in the U.S. of any of the major players, is up $4.76, or 1.2%, at $406.95.
Ben Reitzes, Barclays Capital: The reports were below his estimate for 6.5% year-over-year growth. His estimate for full-year PC unit growth of 4% is likely to be too high. “We believe these results highlight that the cannibalization from tablets continues and is causing a significant disruption to PC demand (Macs gained share again). And it�s not only tablets � we believe smart phones � including the iPhone � are playing a major role. The main differences vs. our model were the Asia Pacific region, which grew less than we anticipated and Western Europe which saw a smaller decline than we previously expected vs. our model.” Reitzes has an Overweight rating on Apple shares, an Equal Weight rating on Dell shares, and an Equal Weight rating on Hewlett-Packard shares.
Richard Gardner, Citigroup: The results were in line with his outlook, noting that the 9% quarter-over-quarter growth was below the five-year average for the season of 12% to 13%. “however, this was largely expected given excess inventory in Europe and continued softness in consumer demand.” Hewlett-Packard, which held onto its top spot, could see a penny of upside to his fiscal Q4 estimate of $1.13, he writes. Dell continues to be overly exposed to mature markets, he notes. Apple’s growth of 20%, year over year, was “impressive.” Gardner has an Outperform rating on Apple shares, a Neutral rating on Hewlett-Packard, and an Outperform rating on Dell.
Brian White, Ticonderoga Securities: Dell’s being replaced by Lenovo confirmed his suspicion that HP’s confusion over its PC division would do nothing to help Dell: “Despite the uncertainty surrounding the potential spinoff of Hewlett-Packard’s PC division, HP maintained its market share of 18.1% and the #1 position. This, coupled with Lenovo’s strength in the PC market, underscore our view we highlighted back in August whereby the notion that the planned spin off of HP’s PC business would provide a big boost to Dell’s PC business is a fallacy. Keep in mind, after IBM (IBM) sold its PC business to Lenovo in 2005, Dell’s unit market share fall substantially over the subsequent three years, while the leading Asia players such as Acer (2353TW) gained share.
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