Microsoft's latest productivity suite's first few weeks on the market have been disappointing, according to Stephen Baker, NPD Group's VP of industry analysis. The market research firm's Weekly Tracking Service found Office 2010 trailing its predecessor, both in terms of unit sales and revenue, when only the first two weeks were considered.
Baker blamed Office 2010's lackluster start to the fact that it was “launched into a saturated market” and that too in the middle of a “seasonally slow period for PC purchases which have, over time, proven to be a have a strong impact on Office sales.” However, Microsoft can take heart from that fact that Office 2010 has improved upon Office 2007's sales pattern so far this year.
“Office 2007 was a radical new design that certainly helped deliver a lot of curious buyers and it was launched nearly parallel with Vista, adding a good deal of promotional activity in the software aisle, both of which likely helped drive initial sales of Office 2007,” Baker wrote in a blog post. “While Office 2010 has many compelling new features, it is always an uphill battle to sell a high installed base product based on new features alone.”
The analyst sees tremendous promise in the key card program, which lets users activate Office 2010 on preloaded machines using a product key (no disc required). Baker revealed that the key card program currently accounts for “about one-third of the unit volume.”
Baker does not foresee web-based productivity applications posing any real threat to Office 2010 in the immediate future: “Over time it is certainly likely that we will see some slowdown in retail sales as consumers alter their productivity software habits, but that time is not now. Mainstream consumers have not embraced the concept of the cloud, nor are they likely in the short to mid-term, making most of the questions around free software moot.”
Sometimes it escapes our attention that people are still buying huge numbers of PCs these days. Intel's quarterly profit announcement reminded everyone of that today with news that the chip maker had record profits of $2.9 billion. Not to belabor the point, but that is all raw profit, not revenue.
The new numbers display a solid increase of $445 million over last quarter, and a massive $3.3 billion increase from last year. Not only did regular CPU sales blow up, but Atom revenue was up a respectable 16%. Any way you slice it, it's good to be Intel right now. Did you buy any Intel chips in the last few months? Upon reflection, we realized we may have more than a little to do with their profits.
The bean counters at Asus, Gigabyte, MSI, and every other first-tier motherboard maker are working overtime crunching numbers and trying to get a pulse on the mobo market.
June hasn't been kind to any of the motherboard makers except MSI, which saw revenues jump 13.05 percent over the previous month. ECS took the biggest hit, recording a drop of 17.73 percent, followed by Asus at 5.53 percent. Gigabyte, Pegatron, and ASRock also skidded backwards to the tune of 5.48 percent, 3.1 percent, and 0.94 percent, respectively.
But while June wasn't particularly kind to most of the major motherboard players, they've all seen positive gains for the year, except for ASRock, which is down 11.94 percent. Asus is the biggest winner, having increased its revenues to 68.62 percent on year, while Pegatron and MSI recorded gains of 20.4 percent and 19.03 percent, respectively. Everyone else saw double digit gains as well.
It wasn't a monumental leap, but global semiconductor sales went up 4.5 percent from April to May, settling in at $24.7 billion, says the Semiconductor Industry Association (SIA). The rise in sales was helped by steady demand for PCs, mobile phones, IT upgrades, industrial applications, and even automobiles.
"Growing concerns about issues such as government debt, declining consumer confidence, and pressures on government spending do not appear to have affected worldwide semiconductor sales to date," SIA President George Scalise said.
Peering into its crystal ball, SIA predicts PCs to grow by 20 percent this year, though it's unclear if the emerging tablet market falls into this category. Likewise, SIA said mobile phones will grow somewhere between 10 and 12 percent this year.
It might not be much, but after four years, Sony has finally begun flipping a profit on each PlayStation 3 console it sells. It took several hardware revisions to get to this point, and now that it has, the company can begin focusing on recouping some of its hardware losses, though it's unlikely Sony will break even.
That won't stop the console maker from trying, however, as rumor has it Sony would like to extend the PS3's retail lifespan for a few more years. That will depend, in part, on what the competition is cooking up for the next round of console wars, but it's worth mentioning that Sony recently released firmware that adds 3D-capability to the PS3. Combined with the integrated Blu-ray player, the PS3 is in solid shape to stay relevant beyond tomorrow.
And then there's the whole motion control bonanza. Between Microsoft's Kinect and Sony's Move technology, both console makers appear content to ride their current hardware for at least a little while longer.
Notebook makers are going to have a tough time moving units in the second half of 2010, says Joanne Chien, senior analyst of Digitimes Research.
According to Chien, one of the culprits is weaker-than-expected back-to-school demand, which means kids will have to rough it the old fashioned way - with pen and paper.
It doesn't stop there, however. Sales are likely to stay low for the end-of-year holiday shopping season, at least compared to last year, Chien noted. This will be true in both Europe and the U.S..
How tablets fit into all this remains to be seen. Apple's iPad has already jumped out of the gates with a strong start, and several competitors are lining up slates of their own for release in the second half of 2010. Depending on who releases what, and for how much, tablets could end up one of the hottest selling tech items this holiday season.
A few days ago, Microsoft revealed that it had sold 150 million Windows 7 licenses since the OS first hit the market, making it the fastest selling operating system in history with a 7-copies-per-second sales rate. Going a little further back in time, Steve Jobs suggested at the D8 conference that the PC's days as the most dominant force in computing might be numbered. He even likened PCs to trucks: “PCs are going to be like trucks. They're still going to be around, they're still going to have a lot of value, but they're going to be used by one out of X people.”
While Jobs' prognostication was rebuffed at the very same event by Microsoft CEO Steve Ballmer, the debate is likely to persist deep into the future. Now, Microsoft is again blowing its own vuvuzela.
Frank X. Shaw, Microsoft' corporate vice president of Corporate Communications, was full of big numbers in a recent blog post avowedly inspired by “the Windows 7 milestone.”Although the blog post highlighted Microsoft's success across a wide array of businesses by citing relevant statistics, it was also meant to remind ambitious rivals like Apple that Microsoft is not, after all, going to hell in a “Truck.”
Shaw pointed out that while Apple is expected to sell 7 million units of its “groundbreaking” tablet this year, PC sales are expected to top 350 million units. He even reminded Apple that it still trails Nokia and RIM in the global smartphone market. Shaw was so determined to target Apple that he conveniently overlooked the fact that Microsoft remains a fringe player in the smartphone market - someone clinging onto dear life by the skin of its teeth.
Acer has been creating a ton of headlines around the web over the past twelve months, and with good cause. The volume PC builder appears to be on-track to overtake HP as the biggest notebook PC manufacturer in the world. This is a lofty goal considering Acer's Chairman J.T. Wang admitted to dealing with struggling sales in Europe and wage increases in China. According to information compiled by Gartner, Acer shipped 9.49 million laptops, giving them a slight edge over HP who put out a meager 9.47 million.
During a conference call with investors Wang gave himself a well-deserved pat on the back by claiming the companies recent success is a result of strong leadership. "We are one of a very few that is able to respond to the market when demand stabilized in the latter part of the second quarter because we were prepared". In addition to the positive news on the laptop front, Wang also forecasts a much higher demand for desktop PCs, and expects Acer shipments in this department to rise as high as 10 million this year, a full 2 million more than in 2009.
On the mobile phone front, Acer also announced that it is investing $15 million in R&D to develop new phones based on the Android OS. It's no surprise that they are choosing to expand in the direction of Smart phones, but it will be interesting to measure this investment against HP's $1.2 billion in WebOS once all the dust settles.
At the recent D8 conference, Steve Jobs said the PC industry would be minimized in favor of touchscreen devices. Well, if it's going to happen, it isn't happening yet. Forrester Research has just released some new projctions showing strong future growth across the PC industry; tablets included. Their report says that over the next five years, PC sales will increase by 52%. The only category of computers set to see a decline is the venerable desktop PC.
Forrester also points out the increases in sales of tablets will likely cannibalize netbook sales, bypassing them in 2012. The report claims that tablets will account for 23% of computing device sales by 2015. While the desktop may be declining in 2015, Forester claims they will still be used by more consumers than any other variety of computer. If Forrester is correct, we can all cling to our desktops for just a little longer.
Perhaps Apple should send Gizmodo a Thank-You card for helping to hype the hell out of the iPhone 4 weeks before its release, or at the very least call off the dogs and lift the unofficial ban on Gizmodo from Apple-sponsored events. As it turns out, Steve Jobs and company would have bigger concerns with the iPhone 4, like trying to keep up with record-setting orders.
"Yesterday [June 15] Apple and its carrier partners took pre-orders for more than 600,000 of Apple’s new iPhone 4," Apple said in a statement posted to its website yesterday. "It was the largest number of pre-orders Apple has ever taken in a single day and was far higher than we anticipated, resulting in many order and approval system malfunctions. Many customers were turned away or abandoned the process in frustration. We apologize to everyone who encountered difficulties, and hope that they will try again or visit an Apple or carrier store once the iPhone 4 is in stock."
According to AT&T, the only wireless vendor in town officially allowed to carry and service Apple's smartphone, pre-order sales for the iPhone 4 were 10 times higher than they were for the first day of pre-ordering for the iPhone 3GS.
"Given this unprecedented demand and our current expectations for our iPhone 4 inventory levels when the device is available June 24, we're suspending pre-ordering today in order to fulfill the orders we've already received," AT&T said.