Workstation and professional graphics Market Suffers in Q4

[Apoptosis]

Markets for workstations and professional graphics both suffer in Q4'08, reports Jon Peddie Research

TIBURON, Calif -- March 5, 2009 -- The markets for workstation and professional graphics couldn't avoid the pain that virtually every market on the planet felt in the fourth quarter of '08. Jon Peddie Research (JPR) analyst Alex Herrera has completed analysis of the quarter and reports that the market - like so many others, technology-based or not - took a substantial hit with respect to units, and even more so with respect to revenue.

Thanks to the deep economic malaise that set in across the globe, the workstation market suffered a decline of 9.9% (year over year), with a total of 764.3 thousand workstations shipped. And with the quarter seeing deflation occur even in markets where prices ordinarily only go up, workstation ASPs - no stranger to quarterly declines - took an extra deep discount, dropping 13.4%. The nose dives of both units and ASPs conspired to paint an even poorer picture for revenue, which dropped 21.9% to $1.58 billion.

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Dell and HP now in a virtual dead heat for command of the workstation market

Not long ago, Dell looked poised to dominate the market for workstations the way Intel does for processors - by a wide margin. Back in '04, Dell commanded about 46% of the market, with number two HP far behind at around 27%. But the market leader saw its share slide in '05 and '06, declining to a low around 37%.

Thanks in part to the resurgence of its exclusive platform partner Intel, Dell was able to regain its footing and settle back in the low 40%'s. But that didn't mean the company was distancing itself from HP. On the contrary, while Dell bounced and held on to share, HP kept its foot on the gas, steadily picking up points quarter after quarter.

Last year saw HP's biggest gains, with the company moving from 33.4% in the first quarter up to 38% in by the fourth quarter, just a couple of scant percentage points behind Dell. But in terms of revenue, JPR's analysis showed HP actually nudging ahead of Dell in Q4'08 by roughly the same margin, putting the two effectively in a dead heat.

Nvidia still dominates the professional graphics market, but the quarter's numbers reflect ATI's renewed competitiveness

The quarter was tough on the workstation market, but it was even less kind to the closely related market for professional graphics hardware, which saw shipments drop by 32.1% (year over year). And while both market leader Nvidia and ATI (the graphics arm of AMD) shared in much of the pain, the latter could at least take some consolation in seeing the positive impact its resurgent product offerings were having in the market.

Nvidia continues to dominate the industry, controlling 86.3% of all units shipped (including both professional mobile GPUs and add-in cards), while ATI could only claim 12.1%. But considering that the two rivals' shares the previous quarter were 90.0% and 8.8% (respectively), ATI had finally managed to put an appreciable dent in Nvidia's armor, interrupting the near non-stop share growth the latter had posted dating back to 2004.

About the JPR Workstation Report

Now in its fifth 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, JPR 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.