Will notebook demand slacken in second half of 2010?

With the economic recovery appearing to slow down in the past couple of months, there's concern that consumer spending will fall off before it's even had much of a chance to build back up. That may already be impacting the laptop market.

As reported by Digitimes, the inventory level for notebooks in Europe and North America is higher than normal, a possible indication that demand is slowing. Such inventory usually totals 3 to 4 weeks of supply, but current inventory has grown to 5 to 6 weeks, according to sources in the component industry. Perhaps as a result of bulging inventories, component orders from laptop manufacturers were down last month.

Given the role tech spending has played in the mild recovery that's occurred thus far in 2010, weakening demand for laptops could be a disappointing sign of an economy slowing down again. Back-to-school season will move many units, as always, but what happens after that for notebook sales in the remainder of the year could tell us a bit about the health of the recovery. Will expanded inventories eventually give rise to slashed prices, or will demand improve to bring those inventory levels back to a more typical amount?