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Hardware Sector: A Good Quarter

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DQI Bureau
New Update

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Lenovo: Dramatic Profits Jump



Lenovo, which took over IBMs PC range, currently develops, manufactures, and
markets PC products and value-added professional services. The company reported

strong results for its Q1, 2008, ended June 30, 2007. The consolidated revenues

for the quarter grew 13% y-o-y to $3.9 bn, driven by shipment growth in all

geographies. The companys net profit touched $67.8 mn, versus $5.21 mn a year

earlier, an increase of 1,184%. The profit came despite a $45 mn restructuring

charge recorded during the period.

Buoyed by the strong technology market, the PC shipments during

the quarter rose 22.3% to nearly 4.9 mn units, up from 4 mn during the same

period last year. Notebook shipments in the first fiscal quarter were up 26%

y-o-y, and consolidated revenue was $2.1 bn. Similarly, desktop shipments were

up 20% y-o-y posting double-digit volume and revenue gains. Consolidated revenue

was $1.7 bn in the quarter. The company has tied up with AMD to tap Chinese

rural markets. Currently the stock trades at HK$4.97.

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Apple: On a High



Headquartered in Cupertino, California, Apple develops, sells, and supports
personal computers, portable media players, computer software, and computer

hardware accessories. The company posted revenue of $5.41 bn and net quarterly

profit of $818 mn for the third quarter ended June 30, 2007. These results

compare to revenue of $4.37 bn and net quarterly profit of $472 mn in the

year-ago quarter. Gross margin was 36.9%, up from 30.3% in the year-ago quarter.

International sales accounted for 40% of the quarters revenue.

New technology concepts like Apple TV, Mac OS X

"Leopard" are in the pipeline. Apple operates an online store for

hardware and software purchases and iTunes Store for digital downloadable music,

audio books, games, music videos, TV show, and movies. The company launched

Safari, the worlds fastest web browser, for windows and other OS. The Apple

iPhone has been an astounding success story with most shops running out of stock

within the first few days. Currently the stock trades at $134.08.

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Cisco Systems: Acquisitions Spree



Cisco, a leading company in networking and communications segment, posted
encouraging results for the quarter ended July 2007. The net sales of the

company stood at $9.4 bn compared to $8.0 bn of Q4, 2006 a growth of 18% y-o-y.

Net profits touched $2.3 bn compared to compared to $1.9 bn of Q4, 2006 a growth

of 21.2% y-o-y for the fourth quarter result ended July 28, 2007. The recently

acquired Scientific-Atlanta, contributed $2.8 bn to net sales for fiscal 2007,

compared with $989 mn for fiscal 2006.

During the quarter the company acquired Tivella, Orative, and

Greenfield Networks. The company also announced a definitive agreement to

acquire IronPort Systems. The company and its subsidiaries got orders from major

clients like Turner Broadcasting System, Bank of America, FASTWEB, Italys

second-largest fixed telecommunications provider, Sitronics JSC, a leading

technology company in Russia. The company launched new products like iPhone a

VOIP product, Cisco Digital Signage, a solution for management, publishing and

playback of digital media on networked digital signage displays and Cisco MDS

9124 multi-layer fabric switch, designed to provide enterprise-class

capabilities such as virtual storage area networks, advanced security, high

availability, and flexibility. Currently the stock trades at $31.

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Dell: Improved Performance



A, leading computer system company, specializes in servers, storage,
printing and imaging systems, workstations, notebook and desktop computers,

networking and peripheral products software, among other sectors. The second

quarter ending on August 3, 2008 saw net profit at $733 mn, up significantly

from the previous quarters US $502 mn. Total revenues rose about 7% from

$14.1 bn to $14.8 bn. Strength in enterprise products and services, improved

average selling prices and favorable component costs drove profitability in the

quarter.

Notebook computers and server sales have supported sales growth

throughout the year. Revenue from servers chimed in at around $1.6 bn, up from

$1.4 bn a year ago, while notebook PC sales climbed from $3.7 bn to $3.9 bn in

the same time. Desktop computer sales, meanwhile, remained flat. About $102 mn

went to what Dell called "expired in-the-money stock options" which

includes a $48.5 mn severance payment to the fired CEO Kevin Rollins and an

additional $59 mn cost was attributed to an investigation into Dells

accounting practices. Currently the stock trades at $ 27.86.

Intel: Moderate Growth



A leader in chip segment that technologies and products around performed
moderately for the Q2, 2008 The companys revenue stood at $8.7 bn, up 8%

y-o-y and net profit was $1.3 bn, up 44% y-o-y for the Q2 ended June 30, 2007.

The Q2 gross margin was 46.9%, lower than expectations. The overall margins from

microprocessor were as expected with higher unit shipments offset by lower

average selling prices. The chipset units had record sales during the quarter

and sales of flash memory units were higher sequentially while motherboard units

were low.

During the quarter, Intel, STMicroelectronics and Francisco

Partners announced an agreement to form a new independent company by combining

Intels NOR flash memory business and STMicroelectronics NOR and NAND flash

businesses serving customers in wireless communications and other segments. The

company also launched the first-ever Core 2 Extreme processors for mobile,

enabling notebook PCs for the high-end gaming, digital art and media

applications. The company also announced its new investment in a Vietnam

facility that will be the largest single factory within the Intel assembly and

test network. Currently the stock trades at $25.09.

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