SAN FRANCISCO – The PC market is springing back to life, with benign pricing, favorable component costs, and improving unit growth, a leading analyst said.

In a research note issued today, Deutsche Bank’s Equity Research Group said PC unit growth will continue to accelerate through year-end, and consensus expectations for PC unit growth should trend toward the firm’s earlier prediction of 15%.

Continued strength in emerging and consumer markets, plus the beginning stages of a corporate PC upgrade cycle, should drive improving year-over-year growth rates through the end of 2007, says DB. The combination of improving PC unit growth and favorable component pricing should drive strong near-term earnings for Dell and HP.

The firm said weak CPU pricing – resulting from aggressive competition between Intel and AMD and excess inventory – is supporting lower input costs for PC vendors. 

In addition, DRAM prices are down 27% from the previous quarter; HDD is pricing down 3%, and LCDs are roughly flat, says DB.