Times are tough all around the world, yet the PC market, largely fueled by the strength of netbook sales, continues to grow on a global scale. The same is true of worldwide processor sales, in which Intel's netbook-friendly Atom processor has spurred record growth. This would appear to put netbooks in a strong position moving forward, but surprisingly, netbook manufacturers are less than optimistic, TomsHardware reports.
"We had the chance to sit down with several manufacturers to speak about the trend for netbooks and similar size portables," TomsHardware wrote. "Their forecast: netbooks to see a decline going into Q3 of this year."
One manufacturer, who the site chose not to name, stated word has been passed down from its corporate heads to pull resources from its netbook business and redistribute them into other areas, presumably ones with a higher profit margin. But it's waning consumer demand -- and not thin profit margins -- that has manufacturers casting a cloud over Q3 sales. The companies claim that even though netbooks are less expensive than their notebook counterparts, many users already own a recently purchased notebook, making the low priced netbook more of a want than a need.
Do you see the netbook market dwindling? Hit the jump and post your predictions.
The sharp and steady decline in PC chip shipments in recent times can be likened to a tailspin. Market research firm IDC has published its appraisal of PC chip shipments in the first quarter of 2009. PC chip shipments are still in a nosedive per IDC, though the pace of their descent has decreased considerably.
Intel shipped 33 percent less Atom processors during the first quarter compared to the fourth quarter of 2008. The decline in Atom shipments isn’t entirely surprising as suppliers have amassed a huge stockpile of Atom processors.
The first quarter bought some relief for AMD as its market share improved by 4.6% to reach 22.3 percent. AMD improved its standing in both the PC and mobile markets at the expense of Intel, which had its market share trimmed down to 77.3 percent from 82 percent in the previous quarter.
It's been a tough year for tech all around, a fact which will be underscored when Microsoft reports a year-over-year drop in quarterly revenue for the first time ever. Not even the end of the dot-com boom over a decade ago managed to stop Microsoft from posting an increase.
Current forecasts suggests Microsoft will post quarterly revenue of $14.15 billion for its fiscal third quarter, down from $14.45 billion in the same quarter a year prior. Earnings per share are estimated to be 39 cents, down from 47 cents. The lackluster numbers come just a week after Intel suggested the PC market had bottomed out.
Moving forward, Microsoft cautioned it doesn't expect sales to quickly return to where they were in recent years, and instead to expect slow growth. That could depend on whether or not the software giant is able to release Windows 7 this year or not. While new operating systems can only do so much to push PC sales, the hope (from computer makers) is that Windows 7 could help spur a holiday rush if released early.
Much to the delight of Intel, whose Atom processors have become the de facto standard in all things netbook, the ultraportable PC has proven more popular among the mainstream crowd than Jonas Brothers tickets among tweenage girls. It would seem at this point that netbooks are much more than just a passing fad, but could sales be gearing up to level off?
According to news and rumor site DigiTimes, Taiwan-based netbook vendors say shipment volumes for Q1 are falling short of expectations. The un-cited sources claim that while Acer was estimated to ship two million of its popular Aspire One netbooks in Q1, channel sales didn't hit the mark. The same held true for Asus and its Eee PC sales, which were expected to hit one million units, but fell shy at 900,000. Meanwhile, MSI also reportedly saw lower than expected sales, shipping just 200,000 netbooks.
To make up for the shortfall, channel vendors say both MSI and Acer have started focusing on ultra-thin notebooks.
If you're to take Intel at its word (and earnings report), then forget any talk of the PC industry continuing to decline. According to CEO Paul Otellini, the immediate future looks bright, especially for the No. 1 chip maker.
"We believe PC sales bottomed out during the first quarter and that the industry is returning to normal seasonal patterns," Otellini said in a statement. "Intel has adapted well to the current economic environment and we're benefiting from disciplined execution and agility. We're delivering a product portfolio that meets the needs of the changing market, spanning affordable computing to high-performance, energy-efficient computing."
Backing up his claims, Intel reported a first quarter profit of $647 million, or 11 cents per share, on revenue of $7.1 billion. Wall Street was expecting earnings of 2 cents on revenue of $6.98 billion.
But does Intel's success translate to a recovery in the PC market as a whole? While Intel has been riding high on sales of its Atom processors and managed to beat expectations for Q1, the company wasn't as forthcoming when it came to forecasting Q2.
As if the semiconductor market needed any more bad news, the Semiconductor Industry Association (SIA) released a statement showing how bad worldwide sales of semiconductors have fallen in the past year, while warning that the industry has yet to hit rock bottom.
"The global semiconductor industry is going through one of the steepest corrections in its history," said SIA President George Scalise. "While it would be premature to conclude that the sales decline has hit bottom, there are some indications that the rate of decline has moderated from the final quarter of 2008. The industry responded quickly to the changing market environment by curtailing production and reducing inventory as demand slowed in late 2008. The world’s two largest foundry manufacturers have recently reported slight improvements in factory utilization rates, albeit at levels well below those of a year ago," Scalise continued.
According to SIA, worldwide semiconductor sales sat at just $14.2 billion in February 2009, a decline of a little more than 30 percent over February 2008 when sales reached 20.3 billion. It also represents a 7.6 percent drop from one month ago when sales were $15.3 billion in January.
Scalise warned that sales are expected to keep falling "well below 2008 levels" for the foreseeable future.
Bad news for the computer industry. According to market research company Gartner, PC shipments will plummet nearly 12 percent in 2009, recording the worst decline the industry has ever seen. This even after contracting sales in emerging markets for the first time.
"The PC industry is facing extraordinary conditions as the global economy continues to weaken, users stretch PC lifetimes, and PC suppliers grow increasingly cautious," said George Shiffler, research director at Gartner.
The 12 percent free fall translates into 257 million computers expected to be sold, but its even worse for desktops, whch are expected to slide a staggering 32 percent from last year. Laptops, meanwhile, are expected to go up by 9 percent, no doubt the result of strong netbook sales, a sector that had been keeping the worldwide PC market growing up to this point.
In the land down under they’ve got a lot of neat things that are all their own, the John Butler Trio, dingoes, babies for them to eat, and now holographic car salesman. PDM, Australia’s number one digital media company has just launched the first life-size “Holographic Virtual Assistant” at the Audi Centre Sydney, Rosebery.
The holograph works with 3M’s dynamic Vikuiti rear projection film and rear mounted photo projector technology. Given Vikuiti’s particular digital content abilities, it’s allowed PDM to convert a 10mm thick piece of Perspex into a virtual, talking person.
The virtual assistant provides most of the essential information that one would need when looking to buy an Audi. What the dealership is offering, and targeted information depending on who is in the building at that time is all provided.
According to Allan Brinck, the Dealer Principal, “The Audi brand prides itself on innovation and quality and being a progressive brand, we are once again leading the way with this cutting-edge installation. We have been aware of PDM’s track record of innovation in the Australian marketplace for quite some time. The Virtual assistant is a great way for us to connect with our customers and a great example of Audi’s progressive brand coming to life.”
This might not surprise anyone, but it turns out even the steep price cuts retailers used to entice consumers wasn’t enough to offset the sputtering North American economy. This holiday season – which typically accounts for around 30 to 50 per cent of a retailers total sales, was a bust that rippled across every retail sector. According to preliminary data released by SpendingPulse – a division of MasterCard, total retail sales slipped 2 to 4 per cent. While the electronics sector’s slip of 26.7% sounds substantial, it can’t even hold a torch to luxury item’s such as jewelry which sank almost 35%.
On a more positive note, online retailer Amazon.com said its 2008 holiday sales were its “best ever”. The retailer reportedly received orders for over 6.4 million items. This is good news for Amazon, and helps to back up claims from SpendingPulse’s which showed that more and more, consumers are making the switch to shopping online. Overall online sales declined a meager 2.3 percent from the previous year, however this is in stark contrast to 2007 when e-commerce grew almost 22.4 per cent. With big name brick and mortar retailers such as Circuit City already facing bankruptcy, weak holiday sales might see even more blood shed in the retail sector come January.
The clock is ticking, and the boxing week picture is not yet clear, but it remains to be seen what if anything will put retailers back in the black.
Doubts have been cast on the success of the Blu-ray format ever since it debuted. Initially, the format appeared to be doomed due to a poor adoption rate, thanks mainly to a host of factors, including the PS3’s initial tribulations, popularity of the DVD format, and the steady rise in the popularity of digital downloads.
However, it soon appeared that the tide had turned as PS3’s sales picked up and the rival HD DVD format ran out of steam and met its sorry fate. The latest good news has come in the form of sales data released by research firm Futuresource, which indicates that Blu-ray sales during the ongoing holiday season have been promising.
Another sinister portent for the Blu-ray format happens to be the grim sales picture of the PS3; strong sales of the console surely could have gone a long way in popularizing the format. I expect Blu-ray to share the same mediocre fortunes as the PS3 during the remainder of its lifetime.