The market of workstations and professional graphics hardware showed stabilization in the second quarter of 2009, according to data recently published by Jon Peddie Research. Even though the market grew slightly both in terms of units and dollars, it is hard to say when it will rebound to the levels before the global recession.
Workstation Market Set to Rebound in the Second Half of 2009
Q1 2009 had showed more of the carnage that engulfed global markets in the fourth quarter of 2008. But mercifully, as the research firm had expected, Q2 2009 showed some much-needed consistency in the market, adding more evidence that demand has bottomed and a recovery is in the offing. All told, the second quarter saw 602 thousand workstations shipped, up 4.4% sequentially and down 31% year over year, the latter figure presenting a drop consistent with Q1.
Looking forward, the quarter’s market results offered up some nuggets of data that – in combination with improving macroeconomic global indicators – affirm JPR’s outlook for a cautious, yet discernible, move back up starting in the second half.
Average Selling Prices Stay Flat
Average selling prices (ASPs) held strong, while the related market for professional graphics hardware revealed the first hints of a rebound, according to Jon Peddie Research.
In the face of the deflationary pressure triggered by the slashing of IT budgets, ASPs had fallen by 7.1% in Q1 2009. But the second quarter showed ASPs staying relatively flat (+0.5%), thanks to stabilizing demand and the introduction of a new generation of workstation platform technology (Intel Xeon 5500). Stable demand might not typically be cause for celebration, but in the context of very atypical recent history, it is a critical first step toward a return to the robust market conditions of 2007 and early 2008.
Professional Graphics Hardware on the Rise
Responsible for over $1.1 billion in revenue (2008, not counting mobile shipments), the market for professional graphics hardware is significant in its own right. But it’s also of interest as a revealing leading indicator, since it supplies one of the key differentiating components in today’s workstation platform. Whichever direction the results of the professional graphics market head, the workstation market’s numbers often fall in line behind it.
In Q2 2009, the direction appeared up, as the industry shipped 825 thousand units (including mobiles). That volume represented a similar year-over-year loss as seen the previous two quarters, but resulted in a fairly optimistic sequential growth of 16.2%, a number significantly higher than what could simply be attributed to cyclical conditions.
When it comes to desktop professional hardware, it looks like the demand is also picking up. Revenue wise, the total available market was up from both Q4 2008 and Q1 2009, according to numbers from JPR. Unfortunately, market value is still considerably lower than in the previous years. Generally, it is back on the level of mid-2006.
ATI Wins Professional Mobile Market Share, But Loses Professional Desktop Market
Thanks to advanced process technologies and superior mobile products, ATI, graphics business unit of Advanced Micro Devices, managed to win part of the mobile workstation market from Nvidia Corp., which boosted its market share overall. Nevertheless, the latter managed to increase its unit and dollar shares in desktop professional market with its Quadro FX series.
In fact, ATI FirePro line for professionals is on its best footing in years, a position reflected in professional graphics market results in Q4 2008 and Q1 2009 in terms of units. In those two preceding quarters, AMD managed bumps in overall unit share (add-in cards and mobiles) of to 8.8% and 12.1%, respectively. Thanks to a jump in professional mobile GPU shipments, the company continued in the right direction in Q2 2009, adding another few points of share to climb to 14.4%.
But while ATI numbers are clearly healthier in the context of mobile shipments, to say Nvidia is suffering would be off the mark. Because exclusion of mobile units from the picture and focus on add-in cards only, the story reads differently.
In the face of ATI’s overall market incursion, market leader Nvidia actually raised its share of units and revenue in Q2 2009 to 89.4% and 90.3%, respectively (from 87.6% and 89.3%), according to Jon Peddie Research.
Moreover, revenue ATI got from desktop professional graphics cards in Q2 2009 was the lowest in three years, which clearly points to the fact that the company has to put significant efforts into promoting its FirePro line if it wants to close the gap with Nvidia, which earned 14 times more with its Quadro FX series back in Q2 2009.