Jon Peddie Research - a technically oriented marketing, research, and management consulting firm in the graphics industry.

Strong gains for the workstation market in Q2’10, but more moderate growth on the horizon

Posted by Webmaster on August 31st 2010 | Discuss
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The workstation market posted another round of solid numbers in the second quarter of 2010, but that growth is expected to slow in Q3. The industry shipped 795,000 workstations worldwide in Q2, resulting in sequential growth of 9.6% and a year-over-year increase of 32%. The 32% number matched the largest JPR has seen since Q1'06, though that shouldn't be surprising when considering how dramatically the market had fallen by Q2'09

Dell and HP once again in a deadlock for market leadership

The story's now sounding very familiar. In the second quarter, HP and Dell were once again in a virtual tie for leadership in the workstation market. Dell just nudged HP in units, but by JPR's estimates, HP nosed out Dell in revenue. For yet another quarter, JPR calls this race a tie.

Expect future growth to moderate

The industry's had some hints that the workstation numbers for the second quarter were going to be strong. The industry has a consistent leading indicator for workstation market performance coming from the related market for professional graphics hardware. That market for professional GPUs (graphics processing units, either add-in cards or mobile modules) had been on a hot run, exceeding growth expectations for the preceding four quarters, especially Q1'10, which posted an all-time high of 1.3 million units. All those professional GPUs have to go somewhere, and the vast majority eventually ship in workstations. As professional GPU shipments rise, then so will workstation volume.

By contrast, the professional graphics hardware market moderated in the second quarter, essentially flat from Q1. Accordingly, we expect workstation growth to continue into the third quarter, it's likely to advance at a more modest pace. And given concerns that the previous quarters' exceptionally hot numbers were hinting at a market getting too far ahead of itself, that moderation is probably a healthy thing.