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The fourth quarter of 2008 was a disaster quarter for the workstation market, but it now turns out that the Q1 2009 is even worse than its predecessors for sales of workstations, according to market analysts from Jon Peddie Research (JPR). Worse than that, those workstations that were actually sold, suffered dramatic declines in prices.

According to analyst Alex Herrera the market took substantial hits in both unit volume and revenue. All in all, Q1 2009 saw about 576.7 thousand machines shipped, representing a sequential decline of 24.5% and 26.9% year over year (YoY). Workstation average selling prices (ASPs) suffer in the quarter, dropping 7.1% sequentially and 16.5% annual. Experiencing a double whammy of sorts, ASPs were hampered not only by poor global economic conditions, but by the timing of Intel's workstation platform cycle as well, believes Mr. Herrera.

“The leading provider of processors into the workstation market launched a major platform release (Tylersburg, with Nehalem Xeon processor) just as Q2 began, leaving Q1 with older products which most often see price reductions as the market anticipates arrival of new models,” the analyst explained.

The significant decline in ASPs illustrates the extent buyers were penny-pinching in Q1 2009, behavior that appeared to favor Dell in its on-going battle with HP for workstation market supremacy. The low-cost entry segment grew in unit share, while the more performance-focused mid-range dropped. In conjunction, Dell's share of the fatter entry segment swelled, allowing Dell to raise its overall share of the global workstation market to 42.1%, while HP's declined modestly to 36.5%.

But market results – in combination with improving macroeconomic global indicators – offer up some hopeful possibilities moving forward.

Mr. Herrera reports that while workstations in Q1 2009 took that big turn down, the closely related market for professional graphics hardware was essentially flat from Q4 2008. That performance, along with more optimistic reports on broader economy's health, offer up hope that the workstation market should see bottoming in subsequent quarters.

Tags: , Intel, AMD, ATI, Dell, Nvidia, FirePro, FireGL, Quadro, HP, JPR

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