The Dow technology index has risen more than 50 percent in the past year and a number of technology companies such as Microsoft and Amazon.com reported better than expected earnings this week. What should investors expect from the sector going forward? Rob Sanderson, director of research at ABR Investment Strategy, shared his insights.
“There is strength in the PC food chain…and on the e-commerce side,” Sanderson told CNBC.
Sanderson expects a big product cycle for Microsoft’s Windows 7 on corporate upgrades.
“That’s going to carry sales of PCs to a higher level,” he said. “There’s room for upside to most people’s estimates for PC units for the year.”
Sanderson said Amazon’s earnings results also were solid. He added that the firm's e-reader Kindle may have an advantage over its latest rival, the Apple iPad.
“It’s a 3 million unit category this year, most of it being Amazon,” he said of the e-reader market. “It will probably double or triple this year.”
“The magic is how well you control user experience and aggregate content,” he continued. “Both these companies do it well, but Amazon has a lower price point, which is going to be important for penetration and new opportunities.”
Research in Motion
- Watch Sanderson's Previous Appearance on CNBC (Dec. 17, 2009)
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No immediate information was available for Sanderson or his firm.