Workstation Market Also Suffers Economic Crisis – Jon Peddie Research

ATI Gains Market Share in Professional Segment as Market Shrinks

by Anton Shilov
03/06/2009 | 11:24 PM

The markets for workstation and professional graphics could not avoid the pain that virtually every market on the planet felt in the fourth quarter of 2008.


Based on a report from Jon Peddie Research, professional solutions market declined both in terms volumes as well as in terms average selling prices (ASPs), which is not too surprising. According to the report, workstation market is now dominated by Dell and HP, whereas ATI, graphics products group from Advanced Micro Devices, began to take workstation graphics market from its rival Nvidia Corp.

Workstation Market in Depression

Jon Peddie Research (JPR) analyst Alex Herrera has completed analysis of the quarter and reports that the market - like so many others, technology-based or not - took a substantial hit with respect to units, and even more so with respect to revenue.

Due to the deep economic malaise that set in across the globe, the workstation market suffered a decline of 9.9% (year over year), with a total of 764.3 thousand workstations shipped. And with the quarter seeing deflation occur even in markets where prices ordinarily only go up, workstation ASPs took an extra deep discount, dropping 13.4%. The nose dives of both units and ASPs conspired to paint an even poorer picture for revenue, which dropped 21.9% to $1.58 billion.

Dell and HP Now Face-to-Face on Workstation Market

Not long ago, Dell looked poised to dominate the market for workstations the way Intel Corp. does for processors: back in 2004, Dell commanded about 46% of the market, with number two HP far behind at around 27%. But the market leader saw its share slide in 2005 and 2006, declining to a low around 37%.

Thanks in part to the resurgence of its exclusive platform partner Intel, Dell was able to regain its footing and settle back in the low 40%’s. But that did not mean the company was distancing itself from HP, according to analyst Alex Herrera from JPR.

“On the contrary, while Dell bounced and held on to share, HP kept its foot on the gas, steadily picking up points quarter after quarter,” said Mr. Herrera.

Last year saw HP’s biggest gains, with the company moving from 33.4% in Q1 2008 up to 38% in Q4 2008, just a couple of percentage points behind Dell. But in terms of revenue, JPR's analysis showed HP actually nudging ahead of Dell in Q4 2008 by roughly the same margin, putting the two effectively in a dead heat.

ATI FireGL Begins to Take Share from Nvidia Quadro

The Q4 2008 was tough on the workstation market, but it was even less kind to the closely related market for professional graphics hardware, which saw shipments drop by 32.1% year over year. While both market leader Nvidia and ATI shared in much of the pain, the latter could at least take some consolation in seeing the positive impact its resurgent product offerings were having in the market.

Nvidia continues to dominate the industry, controlling 86.3% of all units shipped, including both professional mobile graphics processing units and add-in cards, while ATI could only claim 12.1%. However, considering that the two rivals' shares in the previous quarter were 90.0% and 8.8%, respectively), ATI had finally managed to put an appreciable dent in Nvidia’s armor, interrupting the near non-stop share growth the latter had posted dating back to 2004