Workstation and professional graphics market feels the pain in Q1’15

The first quarter did little to cheer vendors of workstations and professional graphics processing units (GPUs). While first quarters are cyclically down more often than not, Q1'15 posted workstation and professional GPU shipment numbers that fell substantially deeper than normal. 

Industry watcher Jon Peddie Research reported that the industry shipped approximately 912.4 thousand workstations in Q1'15, equating to a sequential decline of 11.7% and a more modest 3.5% year-over-year decline. The professional GPU industry, primarily composed of the Nvidia/AMD duopoly, saw similarly glum results, with worldwide shipment total of approximately 1.014 million units in the first quarter. That figure was particularly disappointing in that it represented the lowest industry output since Q3'09, when the global economy was in the throes of the worst recession of the last 85 years.

Despite the disappointing numbers, the Q1 results are not likely indicative of any long-term trend. Rather, the poorer than expected shipment figures were in part a consequence of an atypically strong fourth quarter. The previous quarter had the benefit of both end-of-year spending and a stronger-than-typical stimulus, thanks to a fresh set of new deskside workstations built on Intel's Grantley platform. So in context, the first quarter was not expected to look as good, albeit not as poor as it turned out.

Furthermore, the workstation is not under the same pressure as mainstream consumer and corporate PC markets. Corporate PC sales are suffering from longer replacement cycles, as the vast majority of office-class applications don't have a glaring need for newer, higher-performance machines. And the fact that Windows 8 is more a detriment than stimulus for new purchases isn't helping either. The consumer PC market is feeling the same drag as the corporate market, plus it's got the added hindrance of the continued incursion from alternative computing devices, namely smartphones and tablets. By contrast, the workstation market sees virtually none of those negative factors. Of course, any business IT marketplace is dependent on corporate IT budgets, and if spending tightens, volume decreases — a simple fact that helped contribute to the disappointing results.

HP and Nvidia continue to lead the way

Market leaders HP and Nvidia continue to lead the markets for workstations and professional GPUs, respectively. HP accounted around 40.3% of workstations shipped in the first quarter, followed by Dell with 33.8%, Lenovo with 12.7% and Fujitsu with 3.0% (the remaining 10.3% shipped from smaller OEMs and system integrators). Meanwhile, Nvidia remained the dominant force in professional GPUs, responsible for 79.4% of units, while AMD picked up the remaining 20.6%, including a fair number of units sold to Apple to outfit Mac Pros. 

  • Methodology
    • Some – but not all - white-box coverage
    • Navigating to new content: bold PDF bookmarks and yellow highlighted headings
  •  An unexpectedly poor Q1'15, though not likely indicative of a long-term trend
    • Workstation ASPs and revenue
    • Workstation shares by machine class
      • A strong string of quarters for mobiles - but still, the workstation market remanins dominated by the deskside
        • In a down quarter, Dell fares a bit better than its peers
        • Vendor penetration by market segment
  • Apple's MacPro
  • Estimating Mac Pro shipments: the expected surge at launch, followed by a decline, and now starting to settle out
  • Today, Intel stands virtually alone as CPU supplier to the workstation industry
    • AMD is tipping its CPU toes back in workstation waters
    • Single versus multi-socket CPU
  • Windows dominates, with Linux holding minority share
  • Tier 1 distribution of workstations by geography
    • HP retakes top spot in the US
    • In Q1'15, Lenovo takes a nibble out of HP and Dell in EMEA
    • Lenovo takes a step back — though likely a temporary one — in APexJ
    • HP on top, but NEC with historically strong - and very consistent - #2 position in Japan
    • ROW vendor breakdown similar to that of the US
    • EMEA and APexJ: breakdowns by sub-region
    • APexJ: China studders in Q1'15
  • Full-year calendar 2014 results for workstations
  • Professional graphics follow workstations, takes a dive in Q1'15
    • Professional GPU ASPs stable
    • Market pain in Q1'15 shared by both Nvidia Quadro and AMD FirePro, though thanks to Apple, less so for the latter
    • Estimating FirePro shipments to Apple
  • Professional graphics hardware market breakdown by product class
    • The big-picture trend: 2D down, mobile flat, and 3D up
    • High-end and mid-range contribute 75% of add-in card revenue
    • Nvidia maintains dominant hold on 2D, Entry 3D and mobile segments
  • Full-year calendar 2014 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

Tables

  • Table 1 Total workstation market revenue (in $M)
  • Table 2 Q1'15 characteristics of desktop workstation classes
  • Table 3 History of workstation unit share by vendor 
  • Table 4 Historical share of Windows and Linux in x86 based workstations (Apple platforms not included) 
  • Table 5 Total workstations shipped by year (units and revenue)
  • Table 6 Yearly workstation ASPs (in dollars) 
  • Table 7 Growth (loss) of Tier 1 vendors’ unit shares 
  • Table 8 Worldwide shipments of professional graphics (K units, including mobiles) 
  • Table 10 Where Apple's new FirePro SKUs stack up against existing "Southern Islands" SKUs 
  • Table 9 Worldwide quarterly revenue of professional graphics add-in cards ($M, no mobiles) 
  • 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 classes and price bands 
  • Table 14 Professional graphics hardware, yearly totals 
  • Table 15 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 (on average) by almost 3:1 
  • Figure 4 Dell stabilized, then took back some share lost to HP .. but lately, positions for the two relatively stable 
  • 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 Estimated and hypothetical share of Apple in Windows/Linux/OS-X deskside workstation market
  • Figure 9 Intel shipments into Tier 1 workstation market by processor (unit share of Intel platform by processor) 
  • Figure 10 The rise and fall of Opteron in the workstation platform
  • Figure 11 Share of dual-capable (though not necessarily dual-populated) workstations as a percentage of all deskbound systems 
  • Figure 12 While the share of 2S-capable workstations is in decline, the 2nd CPU attach rate is relatively stable
  • Figure 13 Geographic distribution (by unit shipments) over time 
  • Figure 14 Tier 1 vendor shares of U.S. over time
  • Figure 15 Tier 1 vendor shares of EMEA over time
  • Figure 16 Tier 1 vendor shares of Asia/Pac (excluding Japan) over time 
  • Figure 17 Tier 1 vendor shares of Japan region time 
  • Figure 18 Tier 1 vendor shares of Rest of World (ROW) region over time 
  • Figure 19 EMEA breakdown by sub-region 
  • Figure 20 Asia/Pacific (excluding Japan) breakdown by sub-region 
  • Figure 21 China sub-region, breakout by vendor 
  • Figure 22 India sub-region, breakout by vendor
  • Figure 23 Rest of APexJ sub-region, breakout by vendor
  • Figure 24 Overall yearly workstation unit share by vendor
  • Figure 25 Worldwide shipments of professional graphics (K units, including mobiles)
  • Figure 26 Professional graphics card ASPs, by vendor over time 
  • Figure 27 Professional graphics units, by segment
  • Figure 28 AMD's mix of FirePro GPU products over time 
  • Figure 29 Estimated share of professional graphics units shipping in "Winux" workstations 
  • Figure 30 2D in slow decline and mobiles (mostly) flat, as 3D cards have taken the lion's share of market growth over the past several years 
  • Figure 31 Professional graphics add-in card revenue 
  • Figure 32 Vendor unit share history: mid-range 3D add-in card segment
  • Figure 33 Vendor shares of combined High + Ultra-high professional segment over time 
  • Figure 34 Vendor unit share history: mobile professional graphics segment
  • Figure 35 Vendor unit share history: Entry 3D add-in card segment 
  • Figure 37 Vendor unit share history: professional 2D add-in card segment 
  • Figure 38 Workstation market forecast 2013 - 2018 (units) 
  • Figure 39 Workstation market revenue forecast 2013 - 2018 ($)
  • Figure 40 Germany sub-region, breakout by vendor 
  • Figure 41 UK/Ireland sub-region, breakout by vendor 
  • Figure 42 Central and Eastern Europe (CEE) sub-region, breakout by vendor 
  • Figure 43 Nordics (Denmark, Finland, Norway, Sweden) sub-region, breakout by vendor 
  • Figure 44 Italy sub-region, breakout by vendor 
  • Figure 45 Alps (Switzerland, Austria) sub-region, breakout by vendor 
  • Figure 46 France sub-region, breakout by vendor 
  • Figure 47 BeNeLux sub-region, breakout by vendor 
  • Figure 48 Iberia (Spain, Portugal) sub-region, breakout by vendor 
  • Figure 49 Middle East and Africa (MEA) sub-region, breakout by vendor
  • Figure 50 Greece sub-region, breakout by vendor