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On the heels of bullish updates from


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J.P. Morgan

analysts Monday raised their estimate for personal-computer unit growth in 2003.

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The brokerage now expects PC unit volume to rise 8% or 9% in 2003, up from its old forecast for growth of 7%.

"While we have yet to see any meaningful signs of a corporate upgrade cycle, we believe the continued strength of notebooks shipments and improvements in the small and medium-sized business segments warrant an increasingly optimistic outlook," J.P. Morgan wrote.

On Friday, Intel raised its third-quarter revenue guidance, saying its microprocessor division was seeing higher demand. That followed better-than-expected earnings from Dell a week earlier and comments from both it and


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that notebook unit volume has been very solid.

"Early indications are that the back-to-school season could drive sequential unit growth of more than 8% in the third quarter," J.P. Morgan wrote. "For the fourth quarter we are expecting seasonal strength, with units growing 17% sequentially."

While signs of a revival in PC sales is welcome news to tech investors, the brokerage noted the unit gains might not go hand-in-hand with revenue gains.

"Unfortunately, these improving unit volumes are at least partially driven by increasingly aggressive pricing from the largest PC manufacturers," it wrote. "As a result, we are forecasting flat revenue for 2003, with modest growth of 3% for 2004."