Important points: Brazil - 3rd largest PC market Local PC Assembly due to tariffs, difficult to capture market info - IT analysts don't have complete picture - ties in with Intel management's position.
------------ But Berenbaum’s main concern is how Intel is holding up well despite apparent weakness in the PC market. He believes Intel’s story, which is that the industry just doesn’t do a good job of tracking all the places Intel’s chips go:
The perception that INTC is vastly over-shipping PC demand is oversimplified. On a comparable basis, INTC’s trailing nine-month (1Q11-3Q11) PC client MPU revenue was up 15% y/y, vs. Taiwan ODM (notebook + motherboard) units up 1% y/y. Our work suggests this has been driven by three primary factors: 1) Share gain vs. AMD, 2) stronger ASPs (including mix shift away from Atom), and 3) growth in emerging markets that are not served by traditional ODMs. We agree with INTC management’s assertion that Latin America, and Brazil in particular, is driving much of this demand. Brazil is now the third-largest PC market (up 13% in 2011), and protectionist tariffs strongly favor domestic PC assembly. We believe the vast majority of PCs sold in Brazil are assembled locally, and are likely not fully captured in global statistics.