The technology worry chronicles: IBM, Best Buy dinged

Enterprises aren't too hip on buying IT hardware right now and consumers aren't feeling all that spunky either.

Those are the big takeaways from the latest installment of Wall Street worry about technology-related companies. On Friday, worries about Intel emerged. You can expect these worries to emerge leading up to the heart of technology earnings season.

This earnings season is going to be very interesting in technology. Thus far, companies have weathered the economic storm without many problems. Oracle has said that financial services companies haven't pulled back. Dell and HP are doing alright and the latter is doing much better than alright.

But the worries remain. First up, the Big Blue fears. Bank of America analyst Scott Craig cut his earnings estimates for hardware related stocks. Why? Craig reckons that CIOs and technology buyers are getting conservative at large enterprises amid a weaker economy (in other words the CFO is breathing down their necks). Craig also notes that a slowdown in earnings typically precedes a spending slowdown. He also adds that the global economy isn't likely to bail out U.S. based companies.

That final point is huge for a company like IBM, which is really an international company that will benefit from a weak dollar and spending abroad.

In a nutshell, you can expect server spending to weaken a bit. Craig cut his fiscal 2008 revenue target to $102.1 billion from $102.3 billion. Earnings estimates were cut to $7.86 a share from $7.91 a share. Fiscal 2009 estimates were also lowered, but honesty who can predict 2009 accurately.

On the consumer side of the technology equation, Bear Stearns analyst Christopher Horvers downgraded Best Buy to "underperform" based on a slower product cycle (no Vista and other big launches) and a pinched consumer. Horvers writes:

In 2008, factory sales of electronics are expected to almost half to 6%. Concurrent with this slowdown, we believe a negative mix shift in margins is occurring with 60 bps of gross margin pressure for the industry in 2008. Finally, we believe the cycle now favors discounters.

Deutsche Bank analyst Mike Baker begs to differ. Baker argues that Best Buy is taking share from its weaker rivals like Circuit City, but notes that consumer spending is slowing.

This mystery will be taken care of soon enough--Best Buy reports its December sales on Friday.

The handicapping makes me wonder what happens if technology isn't a total debacle.