Photo: Stock.Xchng

Research firm IHS iSuppli, which has become incredibly good at predicting shortages or excess supply of components in the PC industry are at it again. This time the firm warns that worldwide semiconductor inventories are at dangerous highs, which could hurt the industry if demand fell off, but benefit consumers in the form of cheap CPU sales prices.

Two-and-a-half year high

On Wednesday, the firm reported that these inventories are at their highest level in about two and a half years. What’s more worrying is that this is the equivalent level they were at before the last downturn in the chips industry happened, a fate industry execs hope won’t be repeated again.

Keep this up, or burn

Sharon Stiefel, who is the chip analyst over at IHS iSuppli pointed out the dangers in a report. She wrote [via PCWorld]: ‘If growth is lower, the high inventories could cause oversupply in the market, causing chip prices to decline faster than normal.’ She would go on to explain that ‘this could amplify the size and duration of a downturn or slowdown in the semiconductor’.

When it ebbs, consumers win

While natural instinct for consumers is to not care what challenges their PC component making overlords are facing, what the research firm is predicting is we could see a sharp decline in the CPU prices, which is always a big plus for thrifty computer buyers – namely all of us. And, given that chips are usually the priciest component in computers or mobile devices, the savings from a cheap CPU could be great!

How much industry is actually held?

Research firm IHS iSuppli says industry-wide inventory held by suppliers is at 83.6 days, almost 4 days worth of supply greater than the 80 days the industry usually peaks at. But microchips is a cyclical business, with supply usually resting in the 70 to 80 day range, so this drop in prices, later followed by an increase in prices is quite normal.

Really, what your take away from this should be, dear reader, is in the coming days or weeks, we might see a sharp decline in microchip prices. And hey, who will say no to a high quality yet cheap CPU? Didn’t think so.

Photo: iSuppli

Research firm iSuppli, which tracks all the sales and market share movement in computing components, has revealed that microprocessors have reached something of a stalemate. In their most recent quarterly survey wherein it tracks market share stats, iSuppli found that both major players Intel and AMD, as well as the myriad of other microprocessor manufacturers saw their respective industry shares increase very little, though the market’s overall revenue grew significantly.

The same allotment of a slightly bigger pie

Microprocessing powerhouse Intel saw its share move marginally to 80.1 per cent of the whole market, while distant second competitor AMD lost just shy of one percentage point to total 11.3 per cent of the market. Smaller players collectively made up the remaining 8.6 per cent of the market.

What is important, though, is that industry-wide revenue increased 23 per cent for the quarter, showing that business fundamentals are still good, and that consumer demand for computers has returned to levels the business is no doubt pleased about.

The problem

For Intel, AMD and the other manufacturers whose business is predominantly reliant on desktop PC sales and laptop sales, the meteoric rise of smartphones and tablet computers threatens their primary revenue base. In fact, Intel tablets suggest that 2011 is shaping to be a year where a huge rivalry between Britain-based smartphone microprocessing leader ARM and Intel will come to a head, when Intel tablets finally start flooding the market. ARM looked unmoved, but this is the all-conquering Intel, so it would be hubris and arrogance to write the company off.

While it may be some time before smartphones and tablets catch up to or eclipse laptops, insofar as the global shift towards them continues at the rate it has been, the threat is material and immediate.

What do you make of these sales numbers and, more importantly, do you think Intel will be able to mount a serious threat with Intel tablets and Intel smartphones?

Photo: Stock.Xchng

The super-busy folks at iSuppli, who track the sales of computing devices and components worldwide, have put out a warning – DRAM prices are about to skyrocket.

So, if you had plans of buying DRAM, you’d be well served to do so soon!

Two supply problems

iSuppli reports that this predicament is down to two related problems suppliers are facing. The first of these problems in an inability to procure the equipment needed to manufacture the DRAM, and the second problem is implementing new and advanced technology in the supply process.

So what, you may think? Well, this shortage could directly affect you because RAM is a key component in a computer’s functionality. In short, your computer cannot function without RAM. Now add this dimension to the record growth in computers being sold worldwide, and it is likely any shortage will be exacerbated. And, in economics 101, with supply being tight matched with very high demand, price increases significantly. This is precisely what will force DRAM prices upwards, according to iSuppli.

Recession to blame again

The iSuppli research indicates this supply constraint is a long-term holdover from the effects of the recession – DRAM manufacturers are doing all they can to recover from the effects.

You’re already paying more

Photo: MikeOliveri / Flickr

PC World relayed Acer’s report that computer prices have already increased and you’re already shouldering the bulk of the costs. Needless to say, DRAM is a big contributor to the overall price shock as is, meaning, even if you didn’t know it, you’re already footing the bill.

What is the likely increase?

iSuppli did not say how much DRAM prices may increase, but from personal experience from previous RAM price shocks, the acute pain could be as high as 50 per cent. RAM prices can be unstable like that, as this old iSuppli report about RAM prices surging because of feared political instability in Asia back in 2004. In short it would be highly advisable to stock up on memory right away, especially if you were planning to buy DRAM standalone.

Photo: iSuppli

According to research firm iSuppli, with stalled sales of consoles and handhelds, the video game industry is looking to the future. And the future seems to lie in the rapidly growing mobile phone videogame market.

Some stats

It’s expected that factory shipments of game-ready mobile phones will reach north of 1.27 billion this year, up 11.4 per cent from 1.14 billion last year. Figures for consoles and handhelds over the same period are not looking quite as good. Factory units of consoles shipped are expected to total 52.3 million in 2010, up a paltry 0.2 per cent from 62.1 million in 2009. Handheld devices will do even worse, with a 2.5 per cent to decline to 38.9 million this year from 2009’s 39.9 million.

Mobile phones’ ‘near-universal presence’

Consumer electronics analyst at iSuppli, Pamela Tufegdzic, said: ‘The formidable lead enjoyed by cell phones capable of gaming will continue in the years to come with no hint of decline, and their near-universal presence gives them the potential to become a viable competitive threat to dedicated gaming platforms, primarily handheld devices.’

‘And although gamers who prefer a superior gaming experience will always opt for either a console or handheld, sales of both platforms tend to rise and fall based on the vagaries of product development, consumer buying patterns and economic trends,’ she added.

The console strikes back

Photo: Microsoft

Consoles are putting up a pretty good fight, despite the onslaught of mobile phone gaming. The much-anticipated release of Sony and Microsoft’s motion control offerings, Move and Kinect respectively, is expected to get more consoles moving from the shelves. It’s also expected that the three major manufacturers of consoles, Sony, Nintendo and Microsoft, will launch next-gen consoles before 2012.

According to iSuppli, new consoles’ online features will see them being integral to a household’s home entertainment setup. So the war for the gaming market has not yet quite been won.

Photo: iSuppli

iSuppli, the computer industry research firm, has reported that worldwide shipments of PCs have experienced record-breaking growth in Q1 2010, with Acer, in particular, enjoying a surge in PC market share.

Thanks, Asia

The worldwide PC market grew an astonishing 22.7 per cent in the first quarter of 2010 off of the back of strong growth in the Asian market. This almost implausible figure represents the highest growth in a single quarter iSuppli Corp has ever recorded since it began tracking PC shipments. While Q1 2009 saw shipment of 66.5 million units, Q1 2010 saw shipments of 81.5 million units, for a year-on-year increase of 13.6 million PCs.

A weak 2009 helped exaggerate the growth

Matthew Wilkins, an analyst at iSuppli explained to PC World that 2009’s poor performance added to the luster of 2010’s strong performance. He said: ‘this record growth resulted from strong sales in the first quarter of 2010 combined with weak conditions during the first three months of 2009.’

The recession – and recessionary fears – resulted in a reduction in spending on both the enterprise front and for home users, but with the recession seemingly behind us, buyers have flocked back to stocking up on PCs.

The big winner? Acer

Photo: Acer

Acer, who are now the second biggest computer manufacturer by volume behind only HP, were the big winners. The company’s year-on-year Q1 growth amounted to a whopping 47.1 per cent, driven by its focus on the notebook market, according to iSuppli. This resulted in Acer’s global PC market share growing from 11.1 to 13.3 per cent in 2010. HP now sits only 6.3 percentage points ahead of Acer in terms of global PC market share. But that is not to say HP’s PC market share has slid. It’s remained stable at 19.6 per cent, meaning Acer is taking this share from everybody else.

Given the emergence of the tablet market, it will be interesting to see if it accounts for a significant percentage of the personal computing industry come the middle of 2011.

Photo: Acer

iSuppli, the electronics research company that tracks worldwide computer shipping, has announced sales results for 2009. HP retained its position as the number one computer maker in the world, with Dell very nearly falling from second to third and Acer jostling for that number two position.

The list is compiled by adding up the total sales of all desktops, laptops, netbooks and tablet PCs.

The Dell and Acer dance

Dell, whose UK line consists of the Inspiron and XPS in both desktop and laptop form, with Alienware making up its top end range, saw its 2009 worldwide PC shipping drop 9.9% to 38.96 million.

Photo: Acer

Acer, on the other hand, saw the most growth in the PC industry, adding 29% to 2008’s tally to achieve sales of 38.5 million units. Much of this growth is attributable to Acer’s very strong position in the notebooks and netbooks market, with the Acer Aspire One A110 experiencing particularly strong sales in the UK market. According to iSuppli, 80% of Acer’s sales came from the notebook market.

These two figures separate worldwide unit sales number between Dell and Acer by a mere 460,000, meaning unless Dell can stem the tide, Acer is likely to overtake its position as soon as the first quarter of 2010.

HP, Lenovo and Toshiba

Photo: Lenovo

The disturbing thing for Dell is all four of the other top five PC makers experienced growth in 2009. HP, the market leader whose PCs in 2009 made up 19.7% of the market, grew 7.4% in 2009, selling 59.6 million units. The perennial top-seller in the form of the HP Pavilion range continued to rake in big sales for the company. Lenovo and Toshiba rounded out iSuppli’s list, with sales of 24.9 million units and 15.4 million units respectively.

How Dell will stem the tide of continuous weakness in a stronger post-recession market must be wracking the brains of all the higher-ups at the PC giant, while focusing the attention of analysts and onlookers alike on the next iSuppli report. Whether it’s with tablet PCs, netbooks or a completely different strategy, the company needs to throw something and pray it sticks.