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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: kemble s. matter who wrote (173747)	1/7/2004 4:14:15 PM
From: William F. Wager, Jr.	Read Replies (1) \| Respond to of 176387

Goldman Sees Higher PC Spending ..... By K.C. Swanson Staff Reporter 01/07/2004 03:13 PM EST Click here for more stories by K.C. Swanson More robust business spending in 2004 should propel better-than-expected computer unit growth, lifting sales at Dell (DELL:Nasdaq - commentary - research) and Hewlett-Packard (HPQ:NYSE - commentary - research), Goldman Sachs predicted in a research note Wednesday. Goldman hiked its 2004 PC unit sales outlook to 12% growth, up from 8.9%, saying end users and salespeople report that companies are putting in more bids for new hardware. Dell and H-P should be the biggest beneficiaries of an increase in information technology spending, wrote Goldman analyst Laura Conigliaro, given their combined PC market share of 34%. "Dell will continue to have the advantage over H-P given its higher exposure to the commercial segment (about 80% of revenue versus 70% for H-P), opportunities in small and medium business, Asia-Pacific and Europe, and ability to price aggressively as component prices trend downward," Conigliaro wrote. She predicts 2004 unit growth of 26% at Dell, compared to expected industrywide growth of 12%. H-P should gain market share but at a slower rate than Dell, she predicts, with unit growth of 16%. Goldman has recently done investment banking for H-P, but not Dell. Heading into the final hour of trading Wednesday, Dell shares were up 29 cents, or 0.9%, to $35.37 while H-P was off 36 cents, or 1.5%, to $23.41. The improved outlook for enterprise spending marks a shift from the past four years, in which most PC spending growth has come from the consumer side. On average, corporate unit sales have grown only 12% compared to annual increases of 26% from the consumer sector, says Goldman. But next year, the firm expects enterprise unit sales to rise 15.4%. Goldman's comments fit with an emerging consensus that 2004 should finally see signs of the long-delayed pickup in business spending. The same sentiment has led some investors to turn more bullish on Microsoft (MSFT:Nasdaq - commentary - research), for example. Meanwhile, Goldman predicts consumer buying should start to taper off after several years of strength, leading to PC unit growth of only about 6%. The bank estimates that about two-thirds of expected growth on the business side will come from strength in emerging markets like China, India and the Asia Pacific region, as well as some buying by small and medium businesses. The remaining one-third should come as companies shift to Windows XP and generally boost their IT budgets as a result of an improved economy. thestreet.com