Worldwide PC Microprocessor Shipments Fall Off The Cliff IDC reveals in a Press Release on 11 Feb 2009. The IDC press release continued:

• Sequential PC processor unit shipment decline in 4Q08 was the worst since IDC started tracking
• Worldwide PC microprocessor shipments fell significantly in the fourth calendar quarter of 2008 (4Q08), according to new data from IDC. Further demand decline in 1Q09 points to a very poor outlook for the first half of this year.
• In 4Q08, worldwide PC processor unit shipments declined –17.0% quarter over quarter (QoQ) and –11.4% year over year (YoY); market revenue declined –18.0% QoQ and –22.2% YoY to $6.78 billion. For the full year 2008, total PC processor unit shipments grew 10.0%, while revenue grew 0.9% to $30.8 billion.
• Intel’s Atom processor for mini-notebook PCs (which Intel calls ”Netbooks”) continued to make a notable difference in the overall market performance but not enough to help the market avoid dramatic decline. Without Atom, worldwide PC processor unit shipments declined –21.7% QoQ and –21.6% YoY.
• ”The decline in PC processor unit shipments in the fourth quarter was the worst sequential decline since IDC started tracking processor shipments in 1996,” said Shane Rau, director of Semiconductors: Personal Computing research at IDC. “After hinting at a decline last September, the market fell off a cliff in October and November.”

IDC concluded.”The decline of the PC processor market in 4Q08 was due to a precipitous drop in end system demand that quickly moved up the PC supply chain through OEMs and contract manufacturers to the processor vendors. While the fast reaction of the supply chain will help avoid significant inventories, demand remains so weak that IDC expects sequential processor unit shipment to decline in both 1Q09 and 2Q09.

Netbooks killing Windows faster than expected: So says Dana Blankenhorn, writing a February 16th, 2009 post in ZDNet. “Call it the sum of Microsoft’s fears,” said Dana. Dana noted IDC figures from the fourth quarter show a rush toward inexpensive Netbooks and away from Windows laptops. Take out sales of the Atom processor running many Netbooks and total shipments were down 20%, figures showed.

SaaS is Sexy – Hardware is Boring: So says Jon Fortt, senior writer in a Fortune Magazine post on February 4, 2009. Jon wrote.

• “Our love affair with PC hardware may be waning in this recession. Instead, we’re smitten with services. We still like the results of computing – we couldn’t have services like our beloved YouTube, Facebook or iTunes without warehouses full of servers somewhere, processing bits. But there are signs that we’re burning out on buying traditional computers.”
• “Look at the numbers”, Jon said. “PC sales are off. So are Intel’s (INTC, Fortune 500) earnings (down 90% from a year ago), and Microsoft’s (MSFT, Fortune 500) (down 11%). And computer retail? Let’s not even talk about the woes of Circuit City or CompUSA.”
• Jon noted that with PC-land, the only sustained buzz appears to be around low-end netbooks.
• According to Jon, “the services racket, meanwhile, is going gangbusters. Google (GOOG, Fortune 500) – which is really a glorified advertising service – recently turned in quarterly results that were stronger than analysts expected. Salesforce.com (CRM), the poster child for online business services, said sales rose 43% in the most recent quarter.
• What do these companies have in common? They don’t try to fuel growth with big-ticket hardware sales. Instead, they sell service contracts or online software, part of a pitch to save customers money. These days, that pitch is resonating
• “ What does it mean for businesses?, asks Jon. “So far, it means more outsourcing. The benefit is pretty straightforward: Rather than keep your own I.T. staff, buy your own computers and software and struggle to make it work, you can pay an outsourcing company a flat fee to handle those headaches. These days that idea is so popular that IBM saw its North American outsourcing business grow 45% last quarter, a spokesman told me.”

Owning Hardware is so Passé: Kyle Gabhart writing in SYS-CON Media, Inc. noted last Friday,

• “As the fallout from the economy takes it’s toll: staff layoffs, reduced capital expenditures, dwindling revenue, etc., enterprises of all sizes are looking for opportunities to trim back on their fixed costs and move toward business models that are more agile, scaling up AND down with demand.  Call it Cloud Computing, call it Service Oriented Architecture (SOA), call it service orientation, or just call it good business.”

A NetBook and SaaS – All you Need to Be Sexy: A February 16, 2009 article in (Computerworld) by Eric Lai contained the following extracts:

• Early adopters [of netbooks]………… are showing that some of the conventional wisdom about netbooks — that they’re too fragile for on-the-go corporate users, too tiny for doing real work and too underpowered to run business applications — may not be so wise after all
• 16 million netbooks were sold worldwide in 2008, according to ABI Research, which predicts that 39 million netbooks will be sold this year and that unit sales will reach 139 million by 2013.
• Netbooks prices often start at under $400.
• Most PC vendors have avoided marketing netbooks to businesses, partly to avoid cannibalizing sales of higher-priced laptops…….
• Hewlett-Packard expects to offer three different editions of the upcoming operating system on its Mini netbooks.
• Kyle Thornton, category manager for business notebook PCs at HP, added that although tight capital-equipment budgets are slowing PC purchases at many companies in these recessionary times, the relatively low price tags of netbooks should enable users to sneak them in under the radar. “If a sales vice president wants to get 20 $600 netbooks at a time, that is well within the signature authority of many executives,” Thornton said.
• Rival vendors are responding. Asus, as Asustek is commonly known, earlier this month announced an Eee PC 1000HE model with a specified battery life of up to 9.5 hours, although the system has yet to become available. Meanwhile, netbook market leader Acer is reportedly readying enterprise models of the Aspire One with larger screens and longer battery life.
• Malcolm Crabbe, a systems administrator at a restaurant supply company in London, said that the business replaced Dell Latitude laptops used by its 25 field engineers with Eee PC 901 systems three months ago. Feedback from the users “has been very positive,” said Crabbe, who also asked that his company not be identified. The netbooks, he noted, are “light enough to be held in one hand [and] compact enough to fit under the seats” in the vans used by field engineers — an attribute that he said helps prevent thefts.

Tags: Add new tag, cloud computing, cloud-based platform, cost cutting, global economic recession, Google, IDC, Intel, low-cost business applications model, Microsoft, Netbboks killing Windows, Netbook and SaaS, netbooks, SaaS, Salesforce.com, ZDNet

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