Good News For PC's

From barrons:
“Our checks indicate that server and storage demand is really picking up and the survey backs our view that this momentum can continue through 2010,” he writes. Reitzes asserts that companies with exposure here should benefit.
“We believe the IT hardware sector is set to benefit from four key themes, including multinational quality, attractive valuations on a relative basis, many upgrade cycles and pent-up demand, especially for servers and storage,” he writes.
In Dells fight for supremacy, they are now creating a strategic alliance with SalesForce, a company that makes small-medium sized business backend software.
According to reuters:
The overall market for sales management software is worth $9 billion a year and is among the fastest growing sectors in tech. Sales of Web-based sales management software will more than double from $1.9 billion in 2008 to $4 billion in 2013, according to research firm Gartner.
This all goes with Dell’s plan to get more into the service industry. It is a natural progression, Hardware has very little margin for profit these days. You no longer need to own a soldiering iron to upgrade your computer. With cost cutting websites like NewEgg anyone can get wholesale prices on computer parts. Also, computer hardware has reached almost a critical mass on the end-user business pc. How fast do you need to check your E-mail or type a few documents out?
I am currently typing this blog on a machine built in 2003. It is still peppy for my office applications, although it chokes on newer software and games. Engineers and Data Centers will still want the latest and the greatest, But I bet Data Entry clerks, Secretaries, Executives, and Customer Service reps will see very few upgrades to their system.
Service is the way to go, you still need the nerd in the back who can fix a mouse problem, or reboot the server. Companies that shift their focus to software and above software, to new ways of organizing data, are the money of the future.
I am done with my rant now, back to the point. Dell seems to be keeping on track to becoming more service oriented. Their stock showed marginal increase over the past two weeks.
Hp has made an alliance with Beats Electronics, a company chaired by Rap Mogul Dr. Dre, for a laptop pointed right at me. One of my big pet peeves with a laptop is the lack of multimedia function. Usually the sound card and video card are integrated, for business use that is fine. But for a power user, you are forced to use external sound devices. This new laptop is designed with sound in mind.
Co-founder of beats Jimmy Iovine states:
“When Dre and I got together on Beats, it was about an idea which was to improve the transmission of sound between the record makers and the consumers,” said Iovine. “We realized that with the digital revolution, what went terribly wrong was the degradation of sound, which is the heartbeat of music. We found that most PCs downgrade sound to unacceptable levels and when you reduce it further to a limited platform, like an mp3, the music doesn’t stand a chance. If music is an emotion, if it sounds better, then the emotion is better. With HP, we found a partner willing to take the steps to improve the overall sound in the PC and to bring it up to the level that musicians hear in the studio.”
The HP ENVY 15 Beats limited edition is expected to be available in the United States on Oct. 22 with a starting price of $2,299
A little pricey for a Christmas gift, but I expect it to compete with the Macbook Pro. If marketed right, user-friendly enough, and good as they say they could really impede Apple’s market share of Theatre Professionals.
Overall analysts are happy with the computer industry and think it is a solid investment. The motley fool put a nice table together to show the growth of the industry: (excuse the formatting, the blog doesn't do tables well)

Company 10/9/93-
10/9/94 10/9/94 -
10/9/09
EMC (NYSE: EMC)
27% 647%
Hewlett-Packard (NYSE: HPQ)
30% 321%
United Health Group (NYSE: UNH)
57% 263%
IBM (NYSE: IBM)
61% 588%
Safeway (NYSE: SWY)
48% 180%
Dell (Nasdaq: DELL)
139% 2,530%
Potash Corp. of Saskatchewan (NYSE: POT)
94% 1,424%


Palm may be too little too late. Even with Walmart Backing the Pre and giving it away for $79, the iPhone still reigns in sales. According to the motley fool
A number of analysts have questioned the enthusiasm for the new Pre based upon their checks with retailers. That same skepticism should be evident when you look at Palm’s filings with the Securities and Exchange Commission (SEC). Palm’s purchase commitments at contract manufacturers tell the story in the graph below.

As you can see, the demand for Centro and Treo models had been very weak as Palm worked to clear out channel inventory in the quarters before the Pre launch (June 2009). Immediately prior to that launch, the monthly run-rate of purchase commitments jumped to $118 million. What’s odd -- and tends to support the “weak sell-through” thesis -- is the decline of commitments to $108 million exiting the August quarter.