As a result, we believe forward EPS estimates at best will remain unchanged and most likely will need to be lowered.

We believe that demand is now likely to exceed Intel's processor supply now through the third quarter and possibly into the fourth quarter.

The supply situation will likely get worse in the first half, while demand looks sluggish at best, with large inventory levels in the supply chain.

Dell reaffirmed their guidance for the third quarter, but gave no guidance going forward. They also said that industry growth for the third quarter was going to be worse than expected.

I believe the market has reached a state of equilibrium and the conditions we see now are likely to remain for some time.

We are likely to upgrade our 2006 numbers slightly as a result, and do not believe that the shares look expensive relative to the peer group, once allowance is made for the cash on the balance sheet.