Credit Suisse initiated coverage on the US IT hardware sector with an "overweight" rating, saying it had more room to grow to accommodate trends like virtualization and cloud computing, and the explosive growth in smart devices."The acceleration of virtualization, which drives a move toward the private and public clouds, ... of mobile computing ... will cause unprecedented data growth and increased demand for IT infrastructure," the brokerage said in a note to clients dated March 16.
It expects demand for the $1.2 trillion IT hardware and IT services market to grow 4 percent per annum through 2015.
Smartphone makers will see a 14 percent growth through 2015, compared with a decline of 6 percent in the PC industry, Credit Suisse said.
Credit Suisse rated Apple Inc's stock an "outperform," saying iPhone rivals have not yet gained a competitive edge.
The iPad is looking to dominate a $120 billion addressable market with its "aggressive pricing, time to market advantage and a software edge," it said.
Apple, which is the brokerage's top pick, sold nearly 1 million of its next-generation tablet computer during its debut weekend earlier this month.
A rare downgrade by JMP Securities on Wednesday, however, battered shares, with the company losing $14 billion in market value.
Credit Suisse initiated Dell Inc with an "underperform," because of limp revenue growth and slow margin expansion.
Dell has been trying to improve profitability but has been somewhat stymied because of its heavy reliance on sales of low-margin PCs.
The company has looking to smartphones and tablets as it seeks new growth markets, but that effort has yet to gain traction.
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