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To: Donald Wennerstrom who wrote (40333)	9/21/2008 5:32:38 PM
From: Donald Wennerstrom	Respond to of 95761

September 19, 2008, 1:11 pm Credit Suisse Chops ‘09 PC Unit Forecast; Trims Estimates On HPQ, DELL, LXK; Sees Slowdown In SMB Market Posted by Eric Savitz Credit Suisse PC analyst Bill Shope this morning trimmed his forecast for 2009 PC unit growth to 9.9% from 12.7%, reflecting slowing demand in the small- and medium-sized business market. Shope also trimmed estimates for Dell (DELL), Hewlett-Packard (HPQ) and Lexmark (LXK), while leaving his projections on Apple (AAPL) unchanged. Shope notes that discussions at this week’s Credit Suisse Asian Technology Conference in Taipei lead him to conclude that the “typical September bounce” in PC demand will be muted this year, “particularly in the SMB segment.” He says the cautious stance by SMB buyers will offset “what appeared to be a sturdy back-to-school season.” Shope notes that the SMB market represents about 40% of desktop and notebook sales, “so a slowdown here matters.” He contends Dell is most exposed, with about 45% of its shipments going to businesses with under 1,000 employees. HP, he says, has about 38% exposure. Here’s a rundown on his estimate changes: Dell: For FY Q3 ending October, he now sees $16.85 billion in sales and EPS of 35 cents, down from $17.1 billion and 36 cents. For FY ‘09, he goes to $1.44 a share, from $1.46. HP: For the October quarter, he cuts his revenue estimate to $32.99 billion from $33.16 billion; his EPS estimate remains $1 due to a mix-shift to higher margin printing supplies from lower margin PC and printer hardware. For FY ‘09, he goes to $4.05 a share, from $4.07. Lexmark: For the September quarter, he sees revenue of $1.09 billion, down from $1.11 billion; EPS remains 65 cents. For all of 2008, he remains at $4.58 billion and $3.53. For Lexmark, the troubles come down the road, with lower laser printer earnings now hurting the supplies business in future quarters. Shope makes no change in his view on Apple, noting that “our meetings confirmed that Apple has not cut orders and its Mac momentum appears to be holding.” Shope maintains Outperform ratings on Apple and Dell, and notes that while the near-term “may be tough,” the industry’s valuations “are becoming historically compelling.”

To: Donald Wennerstrom who wrote (40333)	9/22/2008 6:12:06 PM
From: Sam	Read Replies (1) \| Respond to of 95761

re: Savitz on Toshiba bidding for Sandisk For some reason Savitz has been pushing a Sandisk-Samsung merger. He had a column last week which was subtitled something like "Is Sandisk Management Insane?" The article quoted about 4 or 5 analysts who have been pretty consistently wrong on Sandisk in recent years, missing the big runs up with "Hold" recommendations, and the big runs down with "Buys". And he neglected entirely to quote analysts like Jim Handy who very succinctly summarized the opposing view (i.e., that Sandisk ought to fight the takeover, or at the very least demand a much large price). If the merger does go through, Samsung will dominate the flash sector for the foreseeable future, IMHO. At least until something actually replaces MLC & SLC flash as they current exist. And Sandisk even has 3D architecture that may be the thing that replaces it, although that is still speculative--any number of other parties have claimed the same thing.