To support these numbers we just released a survey of SMB buyers focused on companies under 1000 employees and found some optimism towards spending there, which is clearly borne out by the POS results. In the survey we dug a little bit deeper and tried to get at what SMBs intend to spend on in 2010 and whether this spending is above where they were in 2009. The results were extremely positive. More than 60 percent of those surveyed are intending to spend money in 2010 on PCs, networking equipment, and servers and 59 percent are planning to spend on storage equipment.

The main reason sited by companies for purchasing was to keep up with technology by upgrading their equipment. Almost 2/3 of purchase intentions were driven by the need to continue to upgrade their equipment. Certainly we have all been paying a lot of attention to the PC upgrade cycle in 2010 as the release of Windows 7 and the revived economy has helped spur interest in the upgrading clients.

Our survey found some interesting data in PC purchasing intentions. As we mentioned in the press release, PCs had the highest intention of being purchased in 2010 as well as the largest segment of companies planning to spend the same, or more, on PCs in 2010 as they did in 2009. Digging deeper we saw that PC upgrade intentions are very different by company size. Almost 80 percent of companies with more than 200 employees planned to spend on PCs as part of a long-term plan to upgrade equipment, a clear sign that Windows 7 is creating interest in larger firms. Conversely, only 65 percent of firms with less than 50 employees intended to upgrade for that reason. But 80 percent of firms of that size said they did intend to spend more, or the same, as last year. Among firms planning to spend less on PCs in 2010, 56 percent said they had replaced equipment last year and a whopping 75 percent of firms with under 50 employees said they replaced last year and would therefore be decreasing their spend this year. The bottom line then appears to be that sales will begin shifting to larger companies in the PC arena in 2010 as some portion of corporate budgets begin to be spent on new client systems.

Paul, therefore, has good precedent to suspect that cable companies will frown upon Hulu’s offerings. But there’s also at least one reason why they might not. Putting a price on the value of the Hulu service enables cable companies to position their own TV Everywhere services directly against Hulu. This is far more challenging to do against a free service consumed by people unwilling to pay for subscription TV regardless of how it is delivered.

Paul also notes that Internet-connected televisions (which could be easy targets for blocking unless manufacturers strike deals with Hulu) are growing in popularity, but so are other pathways to the TV. According to NPD’s Retail Tracking Service, networked content devices have seen strong growth since the beginning of the year. Some of this has been due to lower-priced networked music products from Sonos and Roku. But the most significant new entrant has been Netgear’s Push2TV WiDi receiver that works with the new video projection technology integrated into certain notebooks using Intel Core i3 and Core i5 processors. Dell, Toshiba, and Sony have been among the earliest to support WiDi, while Netgear has been the first out of the gate with a receiver that works with all these brands.

The lesson behind WiDi’s success is that consumers will go to the trouble of bridging the PC and television if you lower the technical and financial barriers to doing so, and it bodes well for future technologies that seek to simplify wireless HD video transmission such as WirelessHD and WHDI. Perhaps by the time those technologies are ready for the masses, Hulu — or whatever version of its service that meets with MSO approval — will offer great flexibility at a price that entices consumers.

Certainly, attributes of the iPad held appeal for some e-reader owners. According to NPD’s recent report, e-Reader Owners: Attitudes and Usage, about a quarter of e-reader owners expressed interest in having a touch screen in their next e-reader, and a third of e-reader owners said that they wanted a color screen in such a device. Apple platforms also featured prominently as alternative devices for e-reading, with the iPhone serving that role for nearly a fifth of e-reader owners aged 18 to 34.

However, e-reader owners overall seem to appreciate the fixed purpose and optimization of their device, with about 40 percent of e-reader owners saying they were looking for more battery life in their next e-reader whereas the iPad offers less than e-paper-based devices. Furthermore, the majority of e-reader owners said they had taken advantage of no supplementary functions, such as Internet access or playing back music, on their e-reader. (Yet, part of this could be attributable to these experiences being less engaging than they are on the iPad; Barnes & Noble noted this when explaining its decision to exclude Web browsing functionality from its Nook.) Then there are the pricing differences, not just the $240 premium that the least expensive iPad holds versus the Kindle 2, but in Amazon’s subsidized wireless broadband that can be justified due to the limited and transaction-oriented nature of its 3G access.

The iBooks functionality of the iPad has received disproportionate attention because it is new, because it touches a growing category that attracted many new entrants at CES, because it addresses another device that has wedged itself into that narrow chasm between smartphone and notebook, and because it captures the optimism of a media that generates words.

While the iPad may signify the kind of device that represents much of the future of e-reading, it is something new. Rather than throwing cold water on the Kindle, the iBooks feature will ultimately compete far more for attention with the device’s other content-consumption features for those who see the value in a converged product.

Combined with strong point-of-sale data from NPDs Retail Tracking Service, where IT sales overall were up 14 percent and positive performance from NPD’s Distributor Tracking Service, where December sales were up nearly 16 percent, it does appear that sales are looking up across all the major customer segments heading into 2010. Of course, we do want to temper the improving results we have reported with the recognition that comparisons against the generational meltdown during the fourth quarter of 2008 are likely to be a bit flawed and that we do need to see these trends continue through the first quarter of2010 to be certain that these are not just false positives.

However, inside the reseller data we see a number of positive data trends that leave us with some level of optimism. Unlike consumer sales, reseller improvement was more broad-based and not just the result of the PC land rush we saw post-Windows 7. Sure both desktops and notebooks performed admirably, but unlike the consumer market where those two categories accounted for 50 percent of consumer spending in December the reseller channel is more diverse depending on PC clients for only about 16 percent of total volume in December. More exciting is the up-tick in average prices that are becoming more pronounced through this channel. With unit volume remaining tepid the gradual growth in ASPs we have seen leads one to believe that SMBs are buying core products that are essential to their business growth and are willing to spend on those as opposed to just general spending on IT products. A couple of examples will serve us well here. First is the server market, where we saw ASPs move to over $3000 in the fourth quarter. This is part of a trend that extends back into mid-2008 as we have seen share move into higher-priced servers (over $4000 products accounted for over 20 percent of sales volume) a strong indicator, when combined with the low levels of unit growth, that strategic buying of core hardware continues while less crucial purchases continue to be postponed. In networking devices we see evidence of this trend as well. While the fourth quarter always tends to deliver higher ASPs in 2009 wired network devices saw a 22 percent jump over third quarter selling prices, far ahead of the 2 percent increase we have seen in the fourth quarter of both 2008 and 2007. The net result was a nice revenue increase in December for wired network devices despite anemic unit volume growth, which has been traditionally the engine that drives revenue increases in IT.

All these measures put together while, we want to emphasize again, are at least partly the result of seasonality and the weak comparisons to 2009, ought to at least give the marketplace the confidence to expect better times ahead as we move into 2010.