Tech firms may end year on high growth note

Pinched by slower demand for computers as the US economy continues to drag, microchip makers Intel Corp and Advanced Micro Devices Inc have cut their sales outlooks ahead of quarterly earnings reports next week.

As tech earnings season kicks off next week, many investors believe the bad news is out of the way and sales should rise in the final months as consumers warily spend on holiday shopping — with an out-sized amount going to smartphones and tablets such as Apple Inc’s iPad. The market for tablets has exploded since Apple launched its iPad in April. Samsung Electronics Co Ltd and Dell Inc alone have launched competing devices in the past two months, and dozens more are in the pipeline. The question is who will get to store shelves in time. Hewlett-Packard Co and Research in Motion Ltd appear to be waiting until next year to launch tablets to consumers rather than rush them out the door this Christmas.

Microsoft Corp may be the big winner, with its new Windows Phone 7 software on handsets in stores by November — its last chance, some analysts say, to catch up with Apple and Google Inc’s Android smartphones after squandering its strong market position in just a few years. Also helping tech spending, emerging markets such as China, Brazil and India are becoming large consumers of computers, smartphones and Internet services and their economies are growing much faster than the US. Sales of traditional computers to consumers will likely be slower through rest of 2010, mostly because of the still sluggish economy, but also because of growing preference for pocket- and handbag-sized devices — bad news for Dell.