Gartner: x86 server sales growth slowed in Q4
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(InfoWorld) - Sales growth for x86 servers slowed in the fourth quarter of 2006 as buyers adopted virtualization technology and waited for quad-core processors, according to a Gartner report released Thursday. Hewlett-PackardÂ sold the most servers, but IBM collected the most money for them in 2006, the report said. Worldwide server shipments in the full year 2006 grew by 8.9 percent to 8.2 million units, but revenue grew only 2 percent to $52.7 billion, compared with 2005, according to Gartner. HP led the competition in server shipments, sending 2.2 million units out the door, up 8 percent from 2005. But IBM took the top spot on revenue with $16.9 billion, up 1.7 percent from the previous year. Shipments of x86 servers, the most widely deployed server platform, slowed in the fourth quarter, which held down full-year totals, said Gartner analyst Jeffrey Hewitt. The growth was "slower ... than we have seen in most recent years," Hewitt said in a prepared statement. "Most of that slowdown seems to be attributable to a lengthening of the sales cycle due to the anticipated introduction of quad-core x86 processors, with some lesser impact from x86 server virtualization." Virtualization software increases the utilization rate for servers, so a company could buy fewer servers than without virtualization. The report also showed continued strength for Sun, which posted a 15.4 percent gain in server revenue in 2006 to $5.7 billion. Sun also increased its revenue market share to 10.8 percent, replacing DellÂ (10.3 percent) in the number three spot. IBM led with 32.2 percent of the market, followed by HP at 28.2 percent. While Sun was the only vendor to report double-digit revenue growth, it shipped just 368,000 units, about one-seventh the number of units that market leader HP shipped.
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Hewlett-Packard Co.'s third quarter disk storage sales fell, while rivals' grew, Gartner said in a report today.
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Low-cost Linux and Windows servers are outselling Unix models, Gartner analysts say.
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(InfoWorld) - Contract chip makers will have a worse time than expected this year, market researcher Gartner said Monday as it revised down its revenue growth target for 2007 to 5.1 percent. A weak first quarter hit the industry harder than expected as growth declined 12.5 percent compared to the previous quarter. Although a recovery for the industry is underway, revenue growth will be far worse than the 16.7 percent growth the industry achieved last year, Gartner said in a report. Next year will be a boom year for contract chip makers, but the market researcher did not provide a firm prediction. Part of the first quarter drop was normal for the time of year. Holiday shoppers tend to take a breather in the first three months of the year, so sales of a number of electronics typically fall. But contract chip makers have also faced a chip glut, which caused some companies to reduce orders. Chip shipments by contract makers fell by around 3.8 percent sequentially in the first quarter, Gartner said, while average selling prices slumped about 9 percent. Fewer high-end chips, which command higher prices, were ordered during the quarter. The market researcher said the weak quarter marked a bottom for the industry. Chip makers have largely agreed. The world's largest contract chip maker, TSMC (Taiwan Semiconductor Manufacturing Co.),Â posted its worst quarter in nearly two years in the first quarter. But it said the industry bottomed out during the quarter and will improve as the year goes on because demand is improving and the chip glut has eased. The company's top rival, United Microelectronics also called the first quarter the low point for the year. "Following two consecutive quarters of decline, we estimate that the foundry market will grow 11.9 percent sequentially in the second quarter of 2007, mainly because of inventory replenishment and a better pricing environment," said Gartner. The communications segment is leading the recovery, while demand for consumer electronics is also reviving, the market researcher added. Last year, TSMC, which founded the contract chip-manufacturing or foundry industry in 1987, took a 45.2 percent share of the contract chip market with revenue of $9.7 billion, according to Gartner. Chip industry revenue totalled almost $260 billion last year, while the contract manufacturing segment accounted for $21.5 billion of that figure.
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LONDON -- According to data from IDC&#39;s Western European Quarterly Server Tracker, server sales rose for the fourth consecutive quarter in the second quarter of 2004 with 10.
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Semiconductor sales were originally expected to rise by 6.4% over 2006 levels, according to a new study from Gartner, but now are expected to grow by only 2.5%.
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Linux's server growth is slowing vis-a-vis Windows server growth.  The reasons are several.  The answer is clear: take on Microsoft directly.
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Fuelled by strong sales of Windows and Linux systems, the worldwide server market grew to $11.5 billion during the second quarter of 2004, according to numbers released Friday by industry research company IDC. Server shipment revenue was up 6.9 percent from last year's second quarter, and the total number of servers shipped jumped 21 percent during that same period, IDC said.
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While Hewlett-Packard, Dell and IBM are the recognized leaders of the X86 server market, one player has surprisingly begun to gain ground.
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(InfoWorld) - Taiwan Semiconductor Manufacturing Co. Ltd., the world's largest contract chip maker, reported its worst monthly revenue in 20 months on Friday, but analysts applauded the figure as further proof that an industry glut is dissipating. TSMC said its revenue in February hit NT$20.58 billion (US$624.2 million), down 14.3 percent compared to last year and its worst monthly revenue figure since it reported revenue of NT$20.11 billion in June, 2005. Despite the poor showing, analysts said it was a strong figure considering February is a shorter work month, at only 28 days, and that a major holiday, the Lunar New Year, celebrated throughout Taiwan and much of Asia, also slowed work at TSMC factories. Last year, the Lunar New Year, which is usually a week-long holiday in Taiwan, was on Jan. 29. This year, the first day of the Year of the Pig fell on Feb. 18. "I think the February sales figure was fantastic. It was only down about 2 percent from January," said Warren Lau, chip industry analyst at Macquarie Securities Ltd. in Hong Kong. He said TSMC's February revenue was further proof that a chip glut that has hampered the industry for the past several months is nearing an end. But the return to health over the next few months could be specific to TSMC, and not include the wider chip industry. Earlier this week, Advanced Micro Devices Inc. (AMD) said it will miss its revenue goal for the first quarter of 2007, while rival Intel Corp. outlined plans to beat a microprocessor glut and weak corporate demand for PCs by stepping up chip development speeds. The two companies engaged in a price war last year, and continue to suffer as they duke it out in the market, analysts say. Gartner Inc. believes the chip industry won't start to recover from the glut until the second half of this year. Rising inventories in late 2006 caused companies to slow production and ease off on buying new machinery as a drop in orders idled more and more production lines, said David Christensen, a Gartner analyst, in a recent report. "Look for this trend to continue through the first half of 2007, followed by a slow recovery in the second half of the year," he wrote. Last month, the market researcher revised down its revenue growth estimate for the chip industry this year to 6.4 percent, from a previous forecast of 9.2 percent. Gartner estimates chip industry revenue will reach US$259.7 billion this year. Â
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Global semiconductor revenue is on track to post a lower-than-expected gain in 2004, following a sudden downturn during the closing months of the year, according to Gartner.
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Computer Sciences Corp. , the fifth-largest U.S. technology services seller, posted quarterly revenue on Wednesday that missed Wall Street expectations, hit by a fall in U.S. commercial-sector sales.
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Advanced Micro Devices Inc. on Thursday reported lower revenues than in the previous quarter, although profits climbed on increased 64-bit sales into the server market.
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BOSTON - The semiconductor industry remains on track to record a significant increase in revenue during 2004, according to Gartner Inc.'s latest forecast for the year released Tuesday. After that, however, the outlook takes a turn for the worse.
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Buyers are waiting for quad-core machines and need fewer servers in general, in part because of virtualization, Gartner says.
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(InfoWorld) - Even as PC sales continue double-digit growth, industry revenue is likely to decline 2.5 percent to US$198.5 billion in 2006, according to a forecast released Friday by Gartner Inc. Worldwide PC shipments are scheduled to rise 10.5 percent over last year, reaching 233.7 million units. The disparity comes because PC vendors have been slashing the prices of desktops and notebooks as they hustle to compete with each other. Another force pushing computer prices down is a series of recent price cuts by Intel Corp. and Advanced Micro Devices Inc. on their processors, the most expensive part of a PC. Now, as the holiday sales season approaches, things could get even worse for vendors like Dell Inc. and Hewlett-Packard Co. In additional to wrestling with each other, they will also have to compete with consumer electronics companies, said George Shiffler, a research director at Gartner. Shoppers have a limited number of dollars to spend on electronics. That spells trouble for PC vendors since the price of a low-end desktop is comparable to a smartphone and its accompanying service contract, he said. Flat panel TVs will also compete with PCs, since excess production capacity has lowered LCD (liquid crystal display) prices and producers are expected to cut prices further with aggressive holiday discounts. Even Microsoft Corp.'s impending launch of the new Vista OS will produce only a temporary rise in sales, Shiffler said. The Gartner study echoes weak financial results at Dell, the world's largest PC vendor. Dell blamed cost cutting and weak demand for $14.1 billion in revenue for the quarter ended Aug. 4. That number was up only 5 percent over the same period last year although Dell sold 11.6 percent more computers worldwide, climbing from 8.7 million in the second quarter of 2005 to 9.7 million this year. Looking past 2006, the flood of low-cost PCs will drive brisk sales in emerging markets through 2008, but mature markets like the U.S. will soon slump to single-digit growth, Gartner said.
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Server shipments and revenue increased in the second quarter as Sun Microsystems Inc. and Dell Inc. gained market share at the expense of Hewlett-Packard Co. (HP) and IBM Corp., according to research released by Gartner Inc. Wednesday.