Cutting Loose a Remnant of Its Past, the Workstation Market Stays on a Roll, Reports Jon Peddie Research

Business Wire, Dec 12, 2007

TIBURON, Calif. -- Jon Peddie Research reports another exceptional quarter's results from the markets for workstations and professional graphics. According to the company, the two closely-tied markets both delivered record shipments, with growth surprising to the upside.

With expectations pointing to solid - but moderating - growth rates, Q3'07 made industry stakeholders smile once again. The quarter saw a total of 763 thousand branded workstations shipped, representing 23.2% year-to-year (YoY) growth, while revenue was up to near $1.8 billion, a robust 18.3% increase YoY.

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Table 1 Workstation market shipments by quarter

The workstation industry now virtually all IHV-based, as another traditional platform officially says goodbye

Today's workstation market has lost virtually all ties to its early roots, with all of the market's robust growth now coming exclusively thanks to products derived from Independent Hardware Vendors (IHVs) Intel, Nvidia and AMD. Almost completely absent is the Traditional Proprietary workstation (TPW) of yesteryear, the RISC/Unix client built and supported by one of a handful of big-iron vendors, most notably HP, SGI, Sun, DEC and IBM.

In Q3'07, the PC-Derived workstation - built on x86 and Windows or Linux - accounted for an overwhelming 99% of units, while the TPW segment lost yet another player. As long expected, HP officially announced the end-of-life for the PA-RISC workstations, leaving Sun and IBM the only shippers of traditional machines moving into '08. For all intents and purposes, the workstation industry has completed its transition from a closed and proprietary model to one that is virtually all IHV based.

Looks like a changing of the guard for mobile workstation graphics

The related (but distinct) market for professional graphics hardware remained robust as well, as the quarter saw 1.1 million units shipped (including mobile), breaking the 1 million mark for the first time (JPR records). Estimated street revenue (add-in cards only) came in at $338 million, representing another high water mark.

Year-over-year growth in units was a very healthy 32.6 %, while revenue grew about 29%, the highest jump JPR has seen to date. Nvidia was once again the primary beneficiary of the growth, raising its share of the overall market (including mobiles) to 86%, with AMD pulling in the bulk of the remainder.

The one segment of professional graphics hardware that AMD - not Nvidia - had been dominating was in mobiles. But Q2'07 hinted at a changing of the guard, as Nvidia's mobile shipments jumped. And now Q3 appears to affirm the companies' shifting fortunes, as Nvidia shipped 84% of units, the highest share it's ever held.

Just as AMD hadn't held a dominant position every quarter in the past, JPR expects cyclical conditions in the market to yield widely varying shares moving forward. But overall, Nvidia appears to have taken the mobile crown to complete a clean sweep of the professional graphics markets, and now it's up to AMD to reclaim the throne.

About the JPR Workstation Report

Now in its fourth 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, JPR 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.