Apple may emerge relatively unscathed from the fallout of the PC price-war, an analyst claims.
UBS Warburg analyst Don Young believes Apple and Gateway may emerge in good health. The analyst also cut his industry shipment growth forecast to two per cent from five per cent, citing a "lack of improvement in global PC demand".
His comments come after a number of profit warnings from PC makers who have been suffering from a lack of demand from the consumer and business sectors. Dell and Compaq have had to slash their growth predictions in reaction to the "softening" market, claims thestreet.com.
Europe slowing "Overall demand continues to show further weakness. In Europe, demand is deteriorating further, led by a steep drop-off in retail demand," Young said in a note to clients, reported by AFX.com.
The analyst does expect to see the PC market recover from the 2001 slump, predicting a ten per cent rise in shipments in 2002. JP Morgan Chase analyst Walter Winnitzki concurs, believing that the industry will lack a "major" catalyst for growth until 2002. He believes the slump has been more challenging than predicted.
Reacting to the analyst's gloomy predictions, Nasdaq lost $63.92 (3.15 per cent) on the day. Apple suffered too, losing $1.56 (6.87 per cent) on the day's trading, closing at $21.14.
Apple expectations However, Apple is expected to meet estimates in its current quarter. Morgan Stanley Dean Witter predicts the company will come in with revenues at or slightly below $1.6 billion. The analysts congratulated Apple on this, calling it a "good result in a very tough market". Apple will report its financial results on Tuesday, July 17 at 11pm.
Apple's attempt to regain market share in the US education sector is gaining momentum. The company has also successfully launched the first shops in a chain of own-branded retail stores, and enjoyed consumer interest and sales at these locations. It's new iBook and PowerBook G4 portables continue to sell well.