The workstation market settles into more sustainable growth pattern in Q4’12

The workstation industry expected more out of fourth quarter market results than it ended up getting. After an encouraging third quarter's results that seemed to break the market out of its recent stagnation, it looked like the clouds were beginning to clear. However, rather than basking in a mostly sunny fourth quarter, vendors instead again weathered partly cloudy conditions. All told, workstation vendors shipped about 934 thousand branded workstations, essentially flat from the third quarter's 932.3 thousand. And considering that Q4 is typically, cyclically stronger than Q3, flat isn't great.

Still, while numbers on the surface weren't much to cheer about, a deeper look at the results show a market that appears to be settling into a healthier, sustainable growth pattern. In the carnage that we saw — in late 2008, all of 2009 and into 2010 — workstation replacement cycles slowed dramatically, as wallets snapped shut. In late 2010 and 2011, businesses regained some confidence to spend, and workstation replacements accelerated beyond normal rates to peak in Q3'11, with buyers in effect 'catching up' after holding off during the recession.

Now, an overheated replacement cycle is going to fall back to typical rates at some point, as machines overdue for replacement get their upgrades. That appears to be what was  happening during 2012, causing a flattening in market growth, even as overall macroeconomic conditions continued to improve. Accordingly, we should expect quarters in 2013 to again start showing positive — and more sustainable — growth year-over-year.

HP pads its lead in the market, while Lenovo's growth rate cools ... and Dell now playing the role of dark horse

Workstation market leaders have played quite consistent roles over the past two years: HP holds steady with its leading market share, Dell's share slides, Lenovo's share gains, and Fujitsu holds steady, in a distant minority position. That trend held in Q4'12, with two exceptions.

First, Lenovo broke a 7-quarter long streak of quarterly share gains, declining modestly to 12.9%. And second, climbing to 42.8%, HP resumed its market gains, gains that had stalled since the first quarter of 2011. Shipping 42.8% of workstation units in Q4'12, HP appears back on smoother ground, after working through the bumps in the road that came with highly-questionable (and well-documented) decisions and strategy from previous senior management.

Professional graphics market back in the black

The related market for professional graphics hardware had been experiencing similar quarterly results as the workstation market. The professional graphics market slowed each of the four quarters following Q3'11, finally snapping that string of losses with a 7.5% sequential gain last quarter. Leader Nvidia continues to reap the bulk of the market's rewards, nudging its market share up to 81.7%, with number two AMD at 17.7%.

  • Methodology
    • Some – but not all - white-box coverage
    • Effective Q3'11, Lenovo inherits NEC workstation share
  • The sun breaks through in the fourth quarter, but clouds remain
    • Workstation ASPs
    • Workstation shares by machine class
      • The workstation market is — and will likely remain — the domain of the deskside
    • Vendor performances in Q4 similar as past quarters .. but not exactly
      • A chunk of Lenovo's gains are on paper, courtesy NEC joint venture
      • Vendor shares per segment
    • Today, Intel stands virtually alone as CPU supplier to the workstation industry …
      • … but AMD is tipping its CPU toes back in
      • Single versus multi-socket CPU
    • Windows dominates, with Linux holding minority share
    • Tier 1 distribution of workstations by geography
      • U.S. generally the largest region, though EMEA challenges now and then
      • Good signs in EMEA
      • APexJ growth slowing, but still presents the most opportunity for growth ... an opportunity Lenovo is exploiting more than others
      • Fujitsu a regional force in Japan, now joined by Lenovo/NEC
      • EMEA and APexJ: breakdowns by sub-region
  • Full-year calendar 2012 results for workstations
  • Signs of strength return to the professional graphics market in Q4'12
    • ASPs continue to show signs of strength
    • Professional graphics hardware market breakdown by product class
      • Mobile workstation GPU shipments jumpback to more sustainable levels
      • Segment growth trends on different trajectories: 2D and 3D vs. mobile 
      • In professional graphics, the revenue is not where the volume is
    • AMD vs. Nvidia battle still mostly at a stand still
      • Nvidia and AMD: strengths by market segment
  • Full-year calendar 2012 results for professional graphics hardware
  • Outlook on the workstation and professional graphics markets
  • Appendix A: Workstation vendor shares per EMEA sub-region

Tables and figures

  • Table 1 Total workstation market revenue (in $M)
  • Table 2 Typical Q4'12 characteristics of desktop workstation classes
  • Table 3 History of workstation unit share by vendor
  • Table 4 Historical share of Windows and Linux in x86 based workstations (Apple platforms not included)
  • Table 5 Total workstations shipped by year (units and revenue)
  • Table 6 Yearly workstation ASPs (in dollars)
  • Table 7 Growth (loss) of Tier 1 vendors’ unit shares
  • Table 8 Worldwide shipments of professional graphics (K units, including mobiles)
  • Table 9 Worldwide quarterly revenue of professional graphics add-in cards ($M, no mobiles)
  • Table 10 Professional graphics hardware classes and price bands
  • Table 11 Professional graphics market share history by vendor (units)
  • Table 12 Professional graphics add-in card (no mobiles) revenue history by vendor
  • Table 13 Professional graphics hardware, yearly totals
  • Table 14 Professional graphics add-in card ASPs, yearly

 

Figures

  • Figure 1 Workstation ASPs over time \
  • Figure 2 History of overall workstation unit distribution, by class\
  • Figure 3 Unlike broader PC market, deskbound workstations outsell mobiles by more than 3:1\
  • Figure 4 HP in firm control of the workstation market, while upstart Lenovo has some room to grow
  • Figure 5 Shares of mobile workstation units, by vendor
  • Figure 6 Shares of Entry class workstation units, by vendor
  • Figure 7 Shares of Mid-range workstation units, by vendor
  • Figure 8 Intel shipments into Tier 1 workstation market by processor (unit share of Intel platform by processor)
  • Figure 9 The rise and fall of Opteron in the workstation platform
  • Figure 10 Share of dual-capable (not necessarily dual-populated) workstations as a percentage of all deskbound systems
  • Figure 11 Geographic distribution (by unit shipments) over time
  • Figure 12 Tier 1 vendor shares of U.S. over time
  • Figure 13 Tier 1 vendor shares of EMEA over
  • Figure 14 Tier 1 vendor shares of Asia/Pac (excluding Japan) over time
  • Figure 15 Tier 1 vendor shares of Japan region
  • Figure 16 Tier 1 vendor shares of Rest of World (ROW) region over time
  • Figure 17 CEE and MEA represent the growth opportunities in EMEA
  • Figure 18 EMEA breakdown by sub-region
  • Figure 19 Asia/Pacific (excluding Japan) breakdown by sub-region
  • Figure 20 China sub-region, breakout by vendor
  • Figure 21 India sub-region, breakout by vendor
  • Figure 22 Rest of APexJ sub-region, breakout by vendor
  • Figure 23 Overall yearly workstation unit share by vendor
  • Figure 24 Worldwide shipments of professional graphics (K units, including mobiles)
  • Figure 25 Professional graphics card ASPs, by class over time
  • Figure 26 Professional graphics unit share history, by class
     

Workstation report

Description

Now in its twelfth year, JPR’s Workstation Report - Professional Computing Markets and Technologies has established itself as the essential reference guide for hardware and software vendors and suppliers serving the workstation and professional graphics markets.

The JPR Workstation Report series includes a breadth of market data and research, including six total reports issued over the year. All in all, a subscription entitles subscribers to:

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Also included in a year’s subscription are four quarterly market bulletins, each around 40 to 50 pages and timed to highlight the previous quarter’s (and year’s) results in the workstation and professional graphics hardware markets. Each quarterly comes with a companion XLS file, with a comprehensive array of tables and figures that go into more detail than the basic text of the bulletin. The market quarterlies are released around eight weeks after the close of the previous quarter.

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Reports are made available in soft PDF form (with complementary XLS for market data), downloadable via JPR’s web site.

 

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