SOURCE: Jon Peddie Research (JPR)

June 01, 2015 12:52 ET

Workstation Market Feels the Pain in Q1'15: Jon Peddie Research

TIBURON, CA--(Marketwired - June 01, 2015) - The first quarter did little to cheer vendors of workstations and professional graphics processing units (GPUs). While first quarters are cyclically down more often than not, Q1'15 posted workstation and professional GPU shipment numbers that fell substantially deeper than normal.

Industry watcher Jon Peddie Research reported that the industry shipped approximately 912.4 thousand workstations in Q1'15, equating to a sequential decline of 11.7% and a more modest 3.5% year-over-year decline. The professional GPU industry, primarily composed of the Nvidia/AMD duopoly, saw similarly glum results, with worldwide shipment total of approximately 1.014 million units in the first quarter. That figure was particularly disappointing in that it represented the lowest industry output since Q3'09, when the global economy was in the throes of the worst recession of the last 85 years.

Despite the disappointing numbers, JPR does not believe Q1 results are indicative of any long-term trend. Rather, Senior Analyst and JPR Workstation Report author Alex Herrera sees the poorer than expected shipment figures in part as a consequence of an atypically strong fourth quarter. Herrera explains, "The previous quarter had the benefit of both end-of-year spending and a stronger-than-typical stimulus, thanks to a fresh set of new deskside workstations built on Intel's Grantley platform. So in context, the first quarter was not expected to look as good, albeit not as poor as it turned out."

Furthermore, Herrera adds that workstation is not under the same pressure as mainstream consumer and corporate PC markets. "Corporate PC sales are suffering from longer replacement cycles, as the vast majority of office-class applications don't have a glaring need for newer, higher-performance machines. And the fact that Windows 8 is more a detriment than stimulus for new purchases isn't helping either. The consumer PC market is feeling the same drag as the corporate market, plus it's got the added hindrance of the continued incursion from alternative computing devices, namely smartphones and tablets. By contrast, the workstation market sees virtually none of those negative factors."

Still, Herrera concedes that any business IT marketplace is dependent on corporate IT budgets, and if spending tightens, volume decreases -- a simple fact that contributed to the disappointing results.

HP and Nvidia continue to lead the way
Market leaders HP and Nvidia continue to lead the markets for workstations and professional GPUs, respectively. HP accounted around 40.3% of workstations shipped in the first quarter, followed by Dell with 33.8%, Lenovo with 12.7% and Fujitsu with 3.0% (the remaining 10.3% shipped from smaller OEMs and system integrators). Meanwhile, Nvidia remained the dominant force in professional GPUs, responsible for 79.4% of units, while AMD picked up the remaining 20.6%, including a fair number of units sold to Apple to outfit Mac Pros.

About the JPR Workstation Report
Now in its twelfth year, JPR's Workstation Report - Professional Computing Markets and Technologies has established itself as the essential reference guide for hardware and software vendors and suppliers serving the workstation and professional graphics markets.

Subscribers to the JPR Workstation Report receive two in-depth reports per year providing a comprehensive analysis of the vendors and technologies driving the workstation platform. Clients also receive four quarterly reports detailing and analyzing market results for each calendar quarter. For information about purchasing the JPR Workstation Report, please call 415-435-9368 or visit Jon Peddie Research at http://www.jonpeddie.com.

Based in Tiburon, California, Jon Peddie Research provides consulting, research, and other specialized services to technology companies, including graphics development, multimedia for professional applications and consumer electronics, high-end computing, and Internet-access product development.

EDITOR'S NOTE: Excerpts from the JPR Workstation Report and expert interviews are available on request.

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