SAN FRANCISCO -- Analysts remain cautious on near-term IT demand, with one leading firm forecasting soft organic growth in the current quarter.

Deutsche Bank Equity Research said today that enterprise hardware demand during the most recent quarter remained soft, with printing equipment likely fairing the worst. Storage spending demand was likely soft and under pricing pressure, and server demand remains weak. "We believe IT hardware budgets are still tracking down eight to 10% this year," the firm wrote in a research note.

"We believe overall IT demand remains soft as corporate IT budgets have yet to improve," wrote analyst Chris Whitmore. "Nonetheless, we expect some seasonal improvement in IT demand in the second half across most enterprise hardware product categories." 

Among the predicted winners: IBM, which just reported earnings, and Apple, which is expected to beat the market on demand for new models of iPhones and iPods.

On the downside, Lexmark, Eastman Kodak, Xerox and Pitney Bowes are expected to will see soft hardward demand and modest inventory restocking. 

Whitmore said some relief is expected this year as suppliers reduce inventories, coupled with traditional seasonality trends and "some loosening" of IT budgets in the second half.

DB's research suggests job growth is a key indicator for IT investment. The historic correlation between jobs growth and IT spending growth is 0.95, Whitmore said.

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