Workstation market not feeling same pain as broader PC market

Latest market report from Jon Peddie Research shows a modest decline in workstation sales explainable in context.

Stakeholders in the workstation market didn’t get the best news out of the first quarter’s sales figures, but it could have been a lot worse. Jon Peddie Research (JPR) has concluded its tabulation and analysis of market results and reports the tepid quarter was both simultaneously disappointing and encouraging, depending on perspective.

Acer entered the workstation market in 2013 with its Veriton P Series. (Source: Acer)
Acer entered the workstation market in 2013 with its Veriton P Series. (Source: Acer)

The leading workstation and professional graphics analyst firm reports the industry shipped approximately 890,500 workstations worldwide in the first quarter of 2013, a figure 4.7% lower than the fourth quarter of 2012 and 3.0% lower than the same quarter a year prior. The disappointment is obvious, as no business is happy with a market showing no growth.

The good news? Simply put, the market didn’t go down, at least not materially so. “Both the sequential and year-over-year (YoY) numbers were negative, but they need to be viewed in a cyclical context,” explains JPR Senior Analyst and JPR Workstation Report author Alex Herrera. “Considering the Q4-to-Q1 decline is often larger than what this past quarter saw, the more modest drop is a little heartening. Furthermore, we’re still suspicious the quarter a year prior was unjustifiably hot, putting less weight on the YoY number as well. As such, with results both mixed and modest in magnitude, we’re inclined to call the quarter simply flat.”

And while in years’ past, that might seem like poor consolation, it’s definitely a silver lining to workstation vendors, the majority of which also have huge stakes in the broader market for PCs, a platform that has suffered a major decline in volume coming at the hands of tablets and smartphones. Fortunately, workstations for professional computing don’t see the same threat from such devices as PCs for consumer or office work do. So while the fourth quarter wasn’t particularly kind to the workstation, it was kinder than it’s been to the mainstream PC. And that’s a trend JPR expects will continue in the foreseeable future.

Dell hinting at resurgence?

Among the top tier workstation vendors, Jon Peddie Research has seen a fairly consistent trend over the past two years: Dell gives up share; Lenovo gains share; HP holds steady, with a dominant position; and Fujitsu holds steady, in a distant minority position. JPR reports that the first quarter’s results didn’t completely redefine that status quo, but there was a notable exception: Dell.

Market share of workstation suppliers Q1 2013 (Source: Jon Peddie Research)
Market share of workstation suppliers Q1 2013 (Source: Jon Peddie Research)

While Lenovo and Fujitsu shares were consistent from Q4, Dell took a point from HP. It was just one percentage point, granted, but it was noteworthy, particularly because it reversed the more typical recent pattern of HP taking share from Dell. With 41.9% of units sold, HP continues to dominate the workstation market, with #2 Dell at 30.9%. Lenovo and Fujitsu shipped 12.5% and 4.0% of units to round out the top four.

Professional graphics market uncannily steady

After peaking in volume back in mid-2011, the market for professional graphics hardware hadn’t seen a quarter worth crowing about. As a leading indicator for the workstation market, professional graphics market slowed for four consecutive quarters, a string that was broken in Q4’12. Where did the market head from there in the first quarter? Well, as it was for workstations, the answer is flat … amazingly flat, in fact. Herrera reports that the industry (predominantly Nvidia and AMD) shipped around 1.13 million professional graphics units in the first quarter of 2013, a scant three thousand units fewer than the prior quarter.

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