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Tablets are weak
[subscription required] and PCs are strong? Are we living in the Twilight Zone?
Yesterday after the close, Intel
(NASDAQ:INTC) raised its second-quarter and full-year revenue, and gross margin guidance, "driven mostly by higher PC unit volume." Business PCs are seeing strong demand, echoing comments from
[subscription required] Hewlett-Packard
(NYSE:HPQ) a few weeks ago.
For Q2, Intel is now forecasting revenues between $13.4-$14 billion, up from the previous range of $12.5-$13.5 billion. The new midpoint of $13.7 billion is 5.3% above the prior one, and is well above the $13.07 billion consensus.
The midpoint of the expected gross margin range has been increased by one point to 64%.
For the full year, Intel now expects "some revenue growth" versus previous expectation for no growth. Consensus estimates had been calling for 0.8% growth.
Could the Microsoft
(NASDAQ:MSFT) Windows 8 cycle finally be here?
I doubt it. This is more likely PCs simply being worn out.
Here's a tabulation of recent global PC industry unit growth trends:
With essentially no real upgrade cycle since 2010 (the year the Apple
(NASDAQ:AAPL) iPad began disrupting the traditional PC market), there are a lot of computers that need replacing.
This is good news for a wide variety of industry players up and down the supply chain -- everyone from Microsoft to H-P to Western Digital
(NYSE:WDC) to Nvidia
Ideally, we'll see a complementary bounce back in consumer PC demand during the back-to-school and/or holiday seasons.
If tablets have peaked in terms of taking share from traditional laptops, then they, too, could be long overdue for an upgrade cycle.
Position in AAPL
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