Ticonderoga on IT Hardware & Networking: Takeaways From Our 2011 Computex Taiwan Tech Trip
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Rating Summary:
45 Buy, 28 Hold, 9 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Ticonderoga on IT Hardware & Networking: Takeaways From Our 2011 Computex Taiwan Tech Trip by Brian White
Ticonderoga analyst said, "The Tech World Is Dancing to Apple's Beat. Although Apple (Nasdaq: AAPL)(Buy) does not participate in the Computex Show, the company's influence across the tech world at the show has never been stronger as competitors try to emulate the company's success through new designs, features and products."
"Tablet Mania Continues but the iPad Reigns Supreme. Over thirty companies showed off tablet products at Computex this year and hybrid devices started to reach the show floor, but we found nothing that is likely to be a competitive threat to the iPad 2. Essentially, Apple enjoys a vertically integrated digital ecosystem, economies of scale in purchasing power, unmatched aesthetics and a powerful brand, combined with the ability to control quality through the development of both the hardware and software. In fact, we believe many companies at the show went back to the drawing board after Apple released the upgraded specs for the iPad 2 with no price change."
"Demand Trends Were a Mixed Bag in Taiwan. The demand trends were a mixed bag across the tech supply chain in Taiwan, with smartphones and tablets the clear standouts with the ramp of the mobile Internet around the world, while LCD TV demand was still struggling and PC trends were muddling through the June quarter. Although we did not hear about the severe order cuts across the PC landscape that we highlighted at the Computex Show last June, Hewlett-Packard's (NYSE: HPQ)(Neutral) PC business seems to be struggling more than most. Also, there were comments regarding weakening trends in China surrounding mobile phones and consumer electronics such as LCD TVs. Netting this all out, we believe the cyclical play in tech will become more difficult going forward; therefore, we remain sellers of cyclical tech supply chain stocks such as Flextronics (Nasdaq: FLEX)(Sell) that are void of secular trends and have high operating leverage."
"Without Sustainable TV Demand, LCD to Struggle. Our meetings with dozens of suppliers and buyers of LCD panels highlighted uninspiring demand trends across the LCD TV and PC markets, along with rising panel prices that we believe are at risk of a reversal during the second half of the year. Without sustainable demand trends, we believe our LCD coverage universe will continue to struggle, especially Corning (NYSE: GLW)(Sell) and LG Display (NYSE: LPL)(Sell)."
"Supply Chain Disruptions in Japan Are Under Control. Based on our meetings in Taipei, the supply chain disruption related to the tragedy in Japan appears to be under control. For some companies, there was a near-term impact immediately following the disaster and prices for certain components skyrocketed; however, even our most concerned contacts believe the situation is largely under control."
Ticonderoga analyst said, "The Tech World Is Dancing to Apple's Beat. Although Apple (Nasdaq: AAPL)(Buy) does not participate in the Computex Show, the company's influence across the tech world at the show has never been stronger as competitors try to emulate the company's success through new designs, features and products."
"Tablet Mania Continues but the iPad Reigns Supreme. Over thirty companies showed off tablet products at Computex this year and hybrid devices started to reach the show floor, but we found nothing that is likely to be a competitive threat to the iPad 2. Essentially, Apple enjoys a vertically integrated digital ecosystem, economies of scale in purchasing power, unmatched aesthetics and a powerful brand, combined with the ability to control quality through the development of both the hardware and software. In fact, we believe many companies at the show went back to the drawing board after Apple released the upgraded specs for the iPad 2 with no price change."
"Demand Trends Were a Mixed Bag in Taiwan. The demand trends were a mixed bag across the tech supply chain in Taiwan, with smartphones and tablets the clear standouts with the ramp of the mobile Internet around the world, while LCD TV demand was still struggling and PC trends were muddling through the June quarter. Although we did not hear about the severe order cuts across the PC landscape that we highlighted at the Computex Show last June, Hewlett-Packard's (NYSE: HPQ)(Neutral) PC business seems to be struggling more than most. Also, there were comments regarding weakening trends in China surrounding mobile phones and consumer electronics such as LCD TVs. Netting this all out, we believe the cyclical play in tech will become more difficult going forward; therefore, we remain sellers of cyclical tech supply chain stocks such as Flextronics (Nasdaq: FLEX)(Sell) that are void of secular trends and have high operating leverage."
"Without Sustainable TV Demand, LCD to Struggle. Our meetings with dozens of suppliers and buyers of LCD panels highlighted uninspiring demand trends across the LCD TV and PC markets, along with rising panel prices that we believe are at risk of a reversal during the second half of the year. Without sustainable demand trends, we believe our LCD coverage universe will continue to struggle, especially Corning (NYSE: GLW)(Sell) and LG Display (NYSE: LPL)(Sell)."
"Supply Chain Disruptions in Japan Are Under Control. Based on our meetings in Taipei, the supply chain disruption related to the tragedy in Japan appears to be under control. For some companies, there was a near-term impact immediately following the disaster and prices for certain components skyrocketed; however, even our most concerned contacts believe the situation is largely under control."
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