TABLE OF CONTENTS
Executive summary 2
Where to turn? 2
ASP, a poisonous snake 2
A blurring of the lines 2
Making the best of it 2
PC shipments to bottom out in 2H09 4
PC industry gradually reaching saturation 4
1. Shall there be increased sell-through visibility? 7
2. Will IT spending execution be deferred for the purpose cost cutting? 8
3. Factors driving shipment increases 9
Averted price war for market expansion protects margins 13
Survive together or collapse individually 16
The brand business – a zero sum game 16
Manufacturing – a short-term beneficiary of expanded order visibility 20
Earnings forecast 22
Investment strategy 24
Company Section 26
Acer Inc: Market share at cost of margins 26
Asustek Computer: Revolution for Eee Evolution 33
Lenovo Group: China story – two edged sword 39
Quanta Computer: Sustainable Leadership 46
Compal Electronics: Stable growth on recovery 53
Wistron Corporation: Bottomed out in 1Q09 60
Analyst team profile 67