Smartphones Make Up 12 Percent Of Handset Sales

March 12, 2009

Smartphones now make up 12 percent of the cellular handset market, but like everything else, growth has slowed.

In the fourth quarter, sales of phones like Research In Motion’s Blackberrys and Apple’s iPhone grew only 3.7 percent, according to Gartner. The pace was the product category’s slowest.

Still, 38.1 million phones were sold during the period – 139.3 million for all of 2008 – as consumers increasingly favored multi-function phones with Internet access.

According to Gartner, smartphones from RIM, Samsung, Apple and HTC took share in 2008 from Nokia’s more entry-level offerings. Nokia’s smartphone sales declined 16.8 percent in the fourth quarter.

The quarter also presented some difficulties for Apple. Sales fell from the third to the fourth quarters and the 2-million-phone inventory the company built up in the third quarter did not significantly diminish.

RIM’s Storm, T-Mobile’s G1, the first phone with Google’s Android software, and Samsung’s touch-screen products did well in the period. In North America, smartphones made up about 20 percent of fourth-quarter sales.


Chip Equipment Outlook Dark In 2009, But Brighter In 2010

March 10, 2009

The grey skies will continue for makers of semiconductor manufacturing equipment in 2009, but the clouds should part by next year.

Gartner said it expects spending on capital equipment will fall a devastating 45.2 percent in 2009 following last year’s 31.1 percent decline.

The downward spin should reverse next year, when spending is to rise 20.1 percent, the research firm said.

Overspending on memory-chip plants during the past three years coupled with a dampened consumer market place leaves 2009 in limbo, the firm said. High-cost lithography equipment will be particularly hammered.


Cell Phone Demand Will Not Stabilize Until 2010

March 4, 2009

On the heels of a 4.6 fourth-quarter decline in cellular handset sales, the market remains unstable and unlikely to recover until 2010.

Mobile phones have traditionally been popular gifts to slide under the Christmas tree. But market in the final three months of 2008 was the worst ever recorded, says Gartner, looking at sequential quarter-to-quarter sales patterns.

The research firm says it doesn’t expect demand to firm again until 2010.

In the fourth quarter, mobile carriers and retailers sold 314.7 million handsets and reduced inventory as they went to prevent being caught with too many products.

Distributors continue to keep very low inventories and by the second quarter will have to restock, Gartner says. “This will help sell-in volumes,” said Research Director Caroline Milanesi. “This will not mark the start of a market recovery.”


PC Industry To Post Worst Decline In History This Year

March 2, 2009

The personal computer industry needs to brace for the worst decline in its history, with shipments falling 11.9 percent this year.

Say goodbye to the desktop: down 31.9% ths year, says Gartner

Say goodbye to the desktop: down 31.9% ths year, says Gartner

The plunge will be more than three times as deep as the previous worse case: the 3.2 percent drop in 2001, says Gartner.

Emerging markets will continue to grow, but at a slow pace of 11 percent. Mature, developed markets will slump 7.9 percent.

Netbooks will help blunt the fall, with shipments almost doubling to 21 million this year from 11.7 million last year. But they won’t be plentiful enough to buoy a market with 257 million units.

Gartner says overall, notebook PCs will rise 9 percent in volume while desktop PCs fall 31.9 percent.

Prices also will decline. The notebook with an 8.9-inch screen that sold for $450 at the end of 2008 will sell for $399 by the end of 2009.


PC Shipments To Drop 13.5% In 2009, J.P. Morgan says

February 5, 2009

In a research note to clients today, J.P. Morgan analyst Mark Moskowitz said it now expects worldwide shipments of PCs to drop 13.5 per cent in 2009, down from his previous forecast of a 3.7 per cent decline.

A much somber outlook than reported by IT market research firms Gartner or IDC earlier this year, but in-line with the latest catastrophic fourth quarter PC shipment numbers.

Moskowitz’s crystal ball probably saw something neither one caught. For 2009, IDC expects PC shipments to increase 3.8 per cent this year from about 300 million units in 2008.

The Wall Street firm also anticipates that the enterprise PC replacement cycle, which generally happens every 3 to 5 years, could be “meaningfully deferred” to 2010.

Leaving companies like Dell, Lenovo – which just reported a $100 million loss – and at a lesser extent H-P, exposed to a steep revenue drop as they heavily rely on selling PCs to enterprises.

The only saving grace for the PC industry is the mini notebook or netbook segment which sold about 10 million in 2008, and double that this year.


VMware In Push For Thin Client Computing, Open Source

February 3, 2009

VMware released on Tuesday open-sourced virtualization software for desktops in a bid to encourage the business use of stripped-down computers and mobile computing devices.

Thin clients projected to be 40% of virtualized desktops

Thin clients projected to be 40% of virtualized desktops

VMware View Open Client “enables IT organizations to safely host user desktops in the datacenter, while letting users access their personalized desktop environment from almost any device at any time – all at a lower cost,” according to the company.

Because the product is open-source, hardware designers can optimize the code for their particular products. And as long as workers have network connections, they can reach their business desktops using low-cost, low-powered computers or mobile devices.

These thin clients will account for about 40 percent of devices linking to virtualized desktops, says Gartner.


Multi-Core Chips Multiplying Out Of Control

January 28, 2009

Multi-core chips for several years have delivered more performance than most software today can use.

Many multi-core chips outpace the capabilities of software

Many multi-core chips outpace the capabilities of software

To truly harness the power of chips that have more than two computing cores, software needs to break its tasks up into pieces that can be acted on in parallel, each by a different core.

It’s a performance gap Gartner sees increasing in the years to come. This from Gartner:

On average, chipmakers get double the number of processors on each new chip approximately every two years. With this doubling of processors and potentially more threads per core, a server with the same number of sockets for chips gets twice as many processors. In this way a 32-socket, high-end server with eight-core chips would deliver 256 processors in 2009. Two years later, with 16 processors per socket, the machine swells to 512 processors. Four years from now, with 32 processors per socket, that machine would host 1,024 processors.

“Most virtualization software today cannot use all 64 processors, much less the 1,024 of the high-end box,” said Carl Claunch, a distinguished analyst at Gartner. “There is a real risk that organizations will not be able to use all the processors.”


Outsourcing To Grow In 2009 Despite Satyam Scandal

January 15, 2009

The Satyam financial fraud scandal has rocked the outsourcing world, but the market should grow in 2009 despite headwinds from the crisis in India and the global economic pullback.

Satyams Infocity campus in India

Satyam's Infocity campus in India

Outsourcing will become a carefully considered as more organizations seek to cut costs and plan for long-term recovery, says Gartner. This will be especially true as economic woes force businesses to change their strategies in a hurry.

Competition in the market will be fierce with vendors offering low prices to build market share or meet quarterly revenue goals. Current contracts will come under pressure as well, with customers renegotiating terms in response to downsizings, acquisitions, divestitures and general cost cutting.

In this environment, new services will boost adoption, including vendor offerings built around software-as-a-service, computing and storage infrastructure delivered as a utility, cloud computing and remote system management.

“During the next five to seven years, a broad set of new and alternative IT delivery models — already in use by aggressive early technology adopter organizations — will become mainstream,” said Research Vice President Ben Pring.


Corporate Technology Spending To Be Unchanged In 2009

January 14, 2009

Business spending on information technology in 2009 will be essentially unchanged from 2008, Gartner found in a survey of international executives.

The research firm interviewed 1,527 chief technology officers in 48 countries and 30 industries during the past four months.

Flat IT budgets were found in North America and Europe with slight increases in Latin America and slight decreases in the Asia Pacific region, the firm said.

The firm said CIOs face global economic conditions that have not existed for 50 years. But if budgets remain on target (up 0.16 percent for the year) the news for technology companies could be far worse. Maintaining spending it better than cutting it.

Here are the details of the study: one third of CIOs reported no change in their budget from 2008, while 46 percent reported a slight increase, and 21 percent reported a cut in IT budgets.

Here are some investment priorities from the executives:

*Invest in business intelligence applications;
*Invest in ERP, or core enterprise resources business software for general ledger, financial and operational tasks;
*Invest in servers and storage to meet growing demand.


Semiconductor Sales Will Decline In 2008 And 2009 Could Be Worse

December 12, 2008

The semiconductor industry is projected to shrink this year for only the fifth time in its 25-year history, according to Gartner.

Worldwide revenue should reach $261.9 billion in 2008, a 4 percent decline from 2007. And the bad news is 2009 could be worse.

In the final quarter of 2008, sales at many companies suffered as the market deteriorated. Looking toward next year, “some have compared the precipitous decline in semiconductor demand to that of the 2001 ‘dot-com’ bubble,” said Gartner Research Vice President Andrew Norwood. “However, unlike 2001, this economic downturn is much more broad-based and not limited primarily to the technology sector.”

Gartner did not provide an outlook for 2009.

Intel, the leading chip company, will likely see its annual sales rise 1 percent, but companies such as Samsung, Toshiba and Texas Instruments will see a decline. Among top ten manufacturers, Hynix Semiconductor is expected to see the steepest sales drop – 29.7 percent. Qualcomm will probably see revenue rise 15 percent.

Projected market share for the top 10 chip makers

Projected market share for the top 10 chip makers


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