Misek writes that his checks point to PC demand softening in the last month - and he sees other signs of trouble for both Dell and Hewlett-Packard:
- Microsoft now will compete with its OEM partners in tablets, a move that "will likely confuse end users."
- He notes that Huawei will be a Windows Phone 8 launch partner, which he finds to be a negative development for both U.S.-based PC giants. "We believe Huawei will look to leverage its growing smartphone success by following a similar pricing trajectory with W8 tablets and notebooks, which in turn will likely create pressure on HP and Dell," he writes.
- PC OEMs. he says, "will likely initially approach the new Windows 8 hybrid tablet/notebooks cautiously." He contends Apple considered releasing a hybrid "but decided not to due to poor testing."
- Windows 8, he contends, is unlikely to have much impact on the consumer PC cycle. "Our time using the W8 beta has convinced us that it is primarily a touch interface and that users of conventional non-touch notebooks and desktops could be confused by much of the new user interface," he writes. "Therefore, we think W8 is unlikely to drive much of a positive consumer PC upgrade cycle in [calendar] Q4."
Misek is cutting estimates for both Dell and HP, both of which he rates "Hold." For Dell, he trimmed his price target to $13, from $15. For HP, his target drops to $21, from $23.
For Dell, he now sees FY January 2013 EPS of $1.83 a share, down from $1.91; for FY 2014 he goes to $1.91 a share, down from $2.04.
For HP, his new FY October 2012 EPS forecast is $4.02 a share, down from $4.04; for FY 2013, he goes to $4.12, from $4.15.
