Niles explains that July and August are typically weak because Europeans are on vacation. "There just isn’t a lot of demand," he says.
As a result, “The September quarter is back-end loaded for most tech companies – and if the phone doesn’t ring and (orders) don't ramp up after Labor Day, we see some of the ugliest pre- announcements of the year, ” Niles explains.
The only wildcard, he says, is if holiday shoppers are willing to bulk up their credit cards. But that doesn't appear likely, this year.
”Hewlett Packard and Dell both lowered forward numbers. So did Acer," reminds Niles. "Whether you’re talking about PC makers or the component makers, it suggests demand isn’t very good.”
But that doesn’t mean there’s are no opportunities in the space. Niles suggests two names.
”I still like Apple,” he says, however he’s hedged his position against ‘more enterprise oriented names in the group’. Also Niles like RFMD, in part because its been so badly beaten up. But he adds, his position in RFMD is hedged against ‘shorts in the PC food chain.'
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CNBC.com with wires.