Wells Fargo analyst Maynard Um released an IT equity research report covering the most important areas of the tech sector.
Wells Fargo mentions that PC growth is driven by corporate segment:
“PC demand continues to improve – strength in corporate and low-end models. IDC/Gartner reported improving yr/yr trends with a 1.7% decline/0.1% increase in Q2 PC shipments driven by corporate strength and some stabilization in the consumer segment driven by low-end models and Chromebooks. Intel noted 9% yr/yr PC shipment growth with strength in the corporate segment. AMD(NASDAQ: AMD) also noted the corporate strength drove sequential unit growth for the first time in four quarters.”
Wells Fargo mentions that proprietary server demand declined, however enterprise CPU volume was up:
“x86 servers performed well; mainframes and UNIX servers still soft. Distributor ARW noted industry standard servers (ISS) were up in the qtr and proprietary servers declined 17% yr/yr IBM (NYSE: IBM) mainframe transition and soft UNIX market). IBM's x86 server sales declined 3% yr/yr, a meaningful improvement from an 18% decline in the prior qtr. Intel (NASDAQ: INTC) noted enterprise server revenues were up 15%+ yr/yr.”
Storage demand has grown sequentially, according to Wells Fargo:
“Storage demand appears to have improved sequentially. Overall storage demand appears to have improved from Q1, but still remains somewhat subdued. EMC(NASDAQ: EMC) saw improvement in high-end though still down yr/yr and expects strength in H2 driven by its new product cycle.”
Smartphone demand is slowing, according to Wells Fargo:
“Smartphone demand decelerating; competition increasing. Samsung (OTC: SSNLF) noted increased competition in the low-end segment from the local Chinese vendors and continued competition against Apple (NASDAQ: AAPL) in the high-end. AAPL's iPhone sales were slightly below expectations and increased 12.7% yr/yr vs. 20% growth in FY2013 and 16.8% in FQ2 2014. Qualcomm (NASDAQ: QCOM) QTL sales were up 3% yr/yr.”
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