Hardware Corner : Sales Grow Amidst Profit Squeeze

Apple: Revenues Up 42%

Headquartered in Cupertino, California, Apple develops, sells, and supports
a series of personal computers, portable media players, computer software, and
computer hardware accessories. Financial results for its second quarter ended
March 29, 2008, the company posted revenue of $7.51 bn as compared to its
revenue of $5.26 bn for the same quarter the previous year, showing a growth of
42% on an annualized basis. The net profit stood at $1.05 bn as compared to a
net profit of $770 mn for the same quarter of the previous year. Gross margin
was 32.9%, down from 35.1% in the year-ago quarter. International sales
accounted for 44% of the quarters revenue.

Apple shipped 2,289,000 Macintosh computers during the quarter, representing
51% unit growth and 54% revenue growth over the year-ago quarter. The company
sold 10,644,000 iPods during the quarter, representing 1% unit growth and 8%
revenue growth over the year-ago quarter. Quarterly iPhone sales were 1,703,000.

During the quarter, Apple iTunes Store surpassed Wal-Mart to become the
number one music retailer in the US, based on the latest data from the NPD
Group. Apple released Aperture 2.1, which introduces an open plug-in
architecture that makes it easy for photographers to use specialized third party
imaging software right from within Aperture. Similarly, Apple introduced Safari
3.1, for Mac and Windows PCs. Recently, Kleiner Perkins Caufield & Byers (KPCB)
launched the iFund with $100 mn in venture capital to invest in companies
developing applications and services for Apples innovative iPhone and iPod
touch. Apple has unveiled MacBook Air, the worlds thinnest notebook. Similarly,
Apple introduced Xsan 2, a high performance, enterprise class storage area
network (SAN) file system for Mac OS X. Currently the stock trades at $184.73.

Cisco Systems: Encouraging Results

Cisco posted encouraging results for the second quarter ended January 31,
2008. The company reported second quarter net sales of $9.8 bn, compared to $8.4
bn during the corresponding quarter in 2007, a y-o-y growth of 16.5%, and net
profits of $2.1 bn compared to $1.9 bn achieved during the second quarter of
2007, a y-o-y growth of 6.5%.

During the quarter, Cisco completed the acquisition of Navini Networks, a
provider in the mobile WiMax broadband wireless industry, and the acquisition of
Securent, a leading provider of policy management software for enterprises.
Cisco plans to invest up to $1.59 bn on information and communications
technology in the United Arab Emirates (UAE) over the next five years.

Recently, AT&T deployed the Cisco CRS-1 carrier routing system to support
advanced residential and business services, and TELUS became the first Canadian
telecommunications provider to deploy and support Cisco TelePresence. Cisco and
IBM have signed an agreement under which they plan to enhance retail banking
experience, customer interaction, and collaboration across all types of delivery
channels. The company was named a global strategic technology provider for the
Middle East and North Africa (MENA) regions newly launched youth employment
initiative, Silatech. The stock currently trades at $26.28.

Intel: Profits Down

A leader in the chip segments, the technologies and products round performed
well for the first quarter ending March 31, 2008. The companys revenues stood
at $9.7 bn, up 9% y-o-y and the recorded net profit was $1.4 bn, down 12% on an
annualized basis.

During the quarter, Intel Capital, Intels global investment organization,
launched the Intel Capital China Technology Fund II. The new $500 mn fund will
be used for Intel Capital investments in wireless broadband technology, media,
telecommunications, and clean tech that complement Intels corporate
initiatives and help expand technology market segments in China.

Cray and Intel signed a multi-year agreement to advance high-performance
computing (HPC) on Intel microprocessors. EMCORE signed a definitive agreement
with Intel to acquire the enterprise and storage assets of Intels optical
platform division as well as the Intel connects cables business. Recently, Intel
finalized and closed its transaction with ST Microelectronics and Francisco
Partners to create a new independent semiconductor company Numonyx B V that will
design, develop, and manufacture NOR and NAND flash memory products.

Intel also opened a software innovation and support center in Hangzhou, the
capital of East Chinas Zhejiang province. The Intel Zhejiang software
technology innovation support center is expected to become one of the largest
software development, testing and validation centers in Asia. Recently, Intel
and Micron Technology Inc unveiled a high speed NAND flash memory technology
that can enhance the access and transfer of data in devices that use silicon for
storage.

Intel appointed Stacy J Smith as the chief financial officer (CFO),
succeeding Andy Bryant in the role.

For the second quarter of 2008 the company expects revenue around $9.0 bn to
$9.7 bn. Currently the stock changes hands at $23.25.

HP: Moderate sales growth

HP performed moderately for the first quarter ended January 31, 2008. The
companys revenues stood at $28.5 bn, up 13% y-o-y, as compared to $25.1 bn in
the corresponding quarter last year. The net profit was $2.1 bn, up 38% y-o-y
for the quarter ended January 31, 2008, as compared to $1.5 bn achieved a year
ago. Revenues from Americas grew 8% a y-o-y to $11.2 bn. Revenues grew 15% in
Europe, the Middle East and Africa to $12.3 bn, and 22% in Asia Pacific to $4.9
bn.

During the quarter, personal systems group revenue grew 24% y-o-y to $10.8 bn.
Imaging and printing group revenue grew 4% y-o-y to $7.3 bn. Enterprise storage
and servers reported revenue of $4.8 bn, up 9% over the previous year period
fueled by ESS Blades, which grew 81%. HP services revenue increased 11% y-o-y to
$4.4 bn and HP software revenue grew 11% over the year ago revenues to $666 mn.
HP financial services reported revenues of $642 mn, an increase of 17% y-o-y.

Recently, HP signed a pre-bid agreement for HP to acquire Tower software, a
document and records management software company based in Canberra, Australia.
HP estimates second quarter fiscal 2008 revenues to be between $27.7 to 27.9 bn.
The stock currently changes hands at $48.28.

Dell: Profits down despite revenue growth

For Dell the fourth quarter ended February 1, 2008 saw a net profit of $679
mn, which went down significantly from the same quarter in the previous year
that stood at $726 mn, a negative growth of 6%. Total revenues rose about 10%,
from $14.5 bn to $15.9 bn. For the entire fiscal 2008 revenues stood at $61.1 bn
compared to $57.4 bn achieved in the previous year, a growth of 6%. Net profits
stood at $2.9 bn compared to $2.6 bn in the previous year, a growth of 14%. For
the fourth quarter, US sales were up 16% and accounted for 49% of the companys
total revenues. Growth was especially strong in the BRIC (Brazil, Russia, India,
and China) countries, where revenues grew 36% on a 50% increase in units. Growth
was also strong in Asia Pacific and Japan, where revenues grew 28% and unit
shipments were up 41%. Driven by new products, the company increased mobility
revenues by 24% and unit shipments were up 37%. Services revenue was up 7%.

During the quarter, Dell entered into strategic sales partnerships with Best
Buy in the US, Tesco, and Dixons Stores (DSGi) based in the UK, and Carrefour
based in France. Dell added a second manufacturing facility in Europe, located
in Ldz, Poland. Dell is also partnering with Egenera to deliver an integrated
solution for employing dynamic data center environments.

On an acquisition spree during the quarter, Dell completed the acquisition of
MessageOne, a software-as-a-service (SaaS) enabled enterprise-class email
business continuity, compliance, archiving, and disaster recovery service for
approximately $155 mn in cash. In the same direction, Dell signed an agreement
to acquire privately held Everdream, a leading provider of software-as-a-service
(SaaS) solutions for remote-service management.

The company entered into a definitive agreement to acquire EqualLogic, a
provider of storage area network (SAN) solutions. Recently, Dell has completed
the acquisition of The Networked Storage Company (TNWSC), an IT consultancy
company that specializes in transitioning IT data storage solutions. The company
has exercised its option to purchase CITs 30% interest in Dell Financial
Services (DFS), making it the sole owner of the financial services company. The
stock currently trades at US$ 19.1.