Apple 2.0

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PC sales spike with Windows 7 debut

November 3, 2009: 7:03 AM ET

Just three days were enough to push computer sales for the week up 40%

Windows 7 sales spike

Click to enlarge. Source: Morgan Stanley, NPD

The sharp spike in the chart at right is the Windows 7 effect PC makers have been waiting for.

In a note to clients issued Monday afternoon, Morgan Stanley's Kathryn Huberty reports that NPD data for the week ending Oct. 24 -- which included three days of Windows 7 sales -- show PC sales jumping 40% year over year.

This was particularly encouraging, she writes, because sales in the early part of the week likely reflected the same pre-Windows 7 declines as the previous two weeks. PC buying for the weeks of Oct. 17 and Oct. 10 was down 29% and 2%, respectively, as consumers waited for Microsoft's (MSFT) new operating system to launch.

PC inventory levels

Click to enlarge.

Huberty dismisses concerns that computer vendors over-shipped ahead of the Windows 7 launch, demonstrating in a second chart that PC inventory levels are still below average.

So which computer maker's shares are likely to benefit most? In a separate note issued Tuesday, Huberty singles out Hewlett-Packard (HPQ), whose potential for growth she says is under-appreciated by investors.

She also likes Apple (AAPL) as an investment, but less for its computers than for the new distribution agreements that are driving iPhone sales.

[Follow Philip Elmer-DeWitt on Twitter @philiped]

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About This Author
Philip Elmer-Dewitt
Philip Elmer-DeWitt
Editor, Apple 2.0, Fortune

Philip Elmer-DeWitt has been following Apple since 1982, first for Time Magazine, and now on the Web for Fortune.com.

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