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Workstation market not feeling the same pain as the broader PC market

Posted: 06.06.13

TIBURON, Calif— June 05, 2013

Stakeholders in the workstation market didn't get the best news out of the first quarter's sales figures, but it could have been a lot worse. Jon Peddie Research (JPR) has concluded its tabulation and analysis of market results and reports the tepid quarter was both simultaneously disappointing and encouraging, depending on perspective.

The leading workstation and professional graphics analyst firm reported that the industry shipped approximately 890.5 thousand workstations worldwide, a figure 4.7% lower than the fourth quarter of 2012 and 3.0% lower than the same quarter a year prior. The disappointment is obvious, as no business is happy with a market showing no growth.

The good news? Simply put, the market didn't go down, at least not materially so. "Both the sequential and year-over-year (YoY) numbers were negative, but they need to be viewed in a cyclical context," explains JPR Senior Analyst and JPR Workstation Report author Alex Herrera. "Considering that the Q4-to-Q1 decline is often larger than what this past quarter saw, the more modest drop is a little heartening. Furthermore, we're still suspicious that the quarter a year prior was unjustifiably hot, putting less weight on the YoY number as well. As such, with results both mixed and modest in magnitude, we're inclined to call the quarter simply flat."

And while in years' past, that might seem like poor consolation, it's definitely a silver lining to workstation vendors, the majority of which also have huge stakes in the broader market for PCs, a platform that has suffered a major decline in volume coming at the hands of tablets and smartphones. Fortunately, workstations for professional computing don't see the same threat from such devices that PCs for consumer or office work do. So while the fourth quarter wasn't particularly kind to the workstation, it was kinder than it's been to the mainstream PC. And that's a trend the firm expects will continue in the foreseeable future.

Dell hinting at resurgence?

Among the top tier workstation vendors, Jon Peddie Research has seen a fairly consistent trend over the past two years: Dell gives up share; Lenovo gains share; HP holds steady, with a dominant position; and Fujitsu holds steady, in a distant minority position. JPR reports that the first quarter's results didn't completely redefine that status quo, but there was a notable exception: Dell.

Market share of workstation suppliers Q1 2013 Jon Peddie Research

While Lenovo and Fujitsu shares were consistent from Q4, Dell took a point from HP. It was just one percentage point, granted, but it was noteworthy, particularly because it reversed the more typical recent pattern of HP taking share from Dell. With 41.9% of units sold, HP continues to dominate the workstation market, with #2 Dell at 30.9%. Lenovo and Fujitsu shipped 12.5% and 4.0% of units to round out the top four.

Professional graphics market uncannily steady

After peaking in volume back in mid-2011, the market for professional graphics hardware hadn't seen a quarter worth crowing about. As a leading indicator for the workstation market, professional graphics market slowed for four consecutive quarters, a string that was broken in Q4'12. Where did the market head from there in the first quarter? Well, as it was for workstations, the answer is flat ... amazingly flat, in fact. Herrera reports that the industry (predominantly Nvidia and AMD) shipped around 1.13 million professional graphics units in the first quarter of 2013, a scant three thousand units fewer than the prior quarter.

About the JPR Workstation Report

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.

Subscribers to the JPR Workstation Report receive two in-depth reports per year providing a comprehensive analysis of the vendors and technologies driving the workstation platform. Clients also receive four quarterly reports detailing and analyzing market results for each calendar quarter. For information about purchasing the JPR Workstation Report, please call 415- 435-9368 or visit Jon Peddie Research at http://www.jonpeddie.com.

Based in Tiburon, California, Jon Peddie Research provides consulting, research, and other specialized services to technology companies, including graphics development, multimedia for professional applications and consumer electronics, high-end computing, and Internet-access product development.