Third-quarter sales of servers across the globe showed a 17.3 percent decline from the same quarter in 2008, sagging to $10.4 billion, according to IDC's Worldwide Quarterly Server Tracker.
But server shipments improved, falling only 17.9 percent for the quarter, compared with 30.1 percent in the second quarter, noted the IDC report released Wednesday. Even more promising, shipments grew at a healthy 12.4 percent over the second quarter, the market's largest sequential quarterly gain since 2005.
All three server segments tracked by IDC--volume, midrange enterprise, and high-end enterprise--saw lower third-quarter sales compared with the same quarter last year. Revenue for midrange enterprise servers fell 23.4 percent, while sales of high-end enterprise servers dropped 19.3 percent.
But revenue for volume servers, the lower end of the market, improved over the second quarter and experienced their lowest drop since the third quarter of 2008.
"The worldwide server market exceeded expectations in the third quarter with improving x86 server demand leading the way, which was driven in part by the infrastructure refresh momentum that is building in many geographies," said Matt Eastwood, IDC's group vice president of Enterprise Platforms, in a statement. "In fact, x86 server revenues experienced their largest sequential quarterly revenue increase in nearly five years."
(Credit:
IDC)
Among the major players in the server industry, IBM and Hewlett-Packard vied for first place in both sales and market share with a statistical tie. Big Blue took a 31.8 percent slice of the market, with a 12.9 percent drop in third-quarter sales to $3.3 billion. HP grabbed a 30.9 market share as its revenues fell 16.8 percent to $3.2 billion.
Third-place Dell saw its sales decline only 6.8 percent to $1.4 billion, helping it capture a 13.5 percent share of the market.
With its future cloudy, pending regulatory approval of its takeover by Oracle, Sun Microsystems suffered a 35 percent drop in third-quarter sales to $778 million. Reports have surfaced that IBM and HP, among others, have taken advantage of the uncertainty surrounding Sun to lure over several of its customers.
Bringing up the rear of the top five was Fujitsu, which saw an 8.2 percent drop in sales to $594 million, carving out a 5.7 percent slice of the market, an improvement over its position from last year's third quarter.
Though optimistic that the market will continue to improve in the fourth quarter and beyond, IDC is still waiting to see how the recovery plays out.
"IDC believes that platform migration is once again gaining steam in the market and the post-recession server deployment patterns will establish the technology agenda in the datacenter for the next business cycle," said Eastwood. "For server vendors, after five quarters of market contraction, the next few quarters will be critical to determining the technology platform winners and losers in the years ahead."
All top five server vendors globally saw declines in revenue and shipment in the third quarter of 2009, with Sun Microsystems registering the biggest fall, according to the latest figures from Gartner.
In a report released Monday, the research firm noted that Sun saw its server revenue drop 32 percent and unit shipments dip 38 percent in the third quarter, compared to the same period last year.
IBM experienced a 12 percent decline in revenue growth, though it clocked the highest revenue in the market for the quarter at $3.4 billion. Hewlett-Packard and Fujitsu saw their revenue decline 15 percent and nearly 11 percent, respectively. Dell was the only vendor with a single-digit revenue decline (5 percent) among the top 5 vendors, Gartner said.
Read more of "Sun sets lowest in server market at ZDNet Asia.
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Fujitsu and Toshiba announced on Thursday that they have completed the transfer of Fujitsu's hard-drive business to Toshiba.
First announced in February, the agreement moves Fujitsu's former hard-drive business into a new Toshiba subsidiary company called Toshiba Storage Device Corp., or TSDC.
To ease the transfer, Toshiba will initially own 80 percent of TSDC, with the remaining 20 percent owned by Fujitsu. By December of 2010, Fujitsu will give up its entire share, making TSDC a wholly owned Toshiba subsidiary.
The conclusion of the deal had been postponed because of delays in obtaining regulatory approval from the European Commission.
Facing intense competition from rivals Seagate, Western Digital, and Hitachi, Toshiba is hoping to carve out a bigger slice of the hard-drive market. The company said it's looking to capture hard-drive sales of 600 billion yen ($6.7 billion) by its fiscal year ending March 2012 and win 20 percent of the market for the year ending March 2016.
As the next generation of Universal Serial Bus technology nears commercial reality, next week's Intel Developer Forum will play host to more USB 3.0-capable devices.
Point Grey Research will show a high-end video camera streaming video to a laptop with USB 3.0 technology
(Credit: Point Grey Research)A Fujitsu laptop, a high-end video camera, and a solid-state drive using USB 3.0 technology, among other hardware, will be demonstrated at IDF, according an announcement from the USB Implementers Forum on Thursday.
USB technology is now used on virtually all computing devices globally as well as the lion's share of consumer electronics products. Also referred to as "SuperSpeed USB," next-generation USB 3.0 boosts the data transfer rate 10 times over current technology, while also improving power efficiency.
Consumer electronics devices enabled with USB 3.0 are expected in the market late this year or early next. The specification was developed by Intel, Hewlett-Packard, Microsoft, NEC, ST-Ericsson, and Texas Instruments.
On display at IDF, among other things, will be a Fujitsu laptop, the first to use built-in USB 3.0. Inside the Fujitsu laptop will be an NEC Electronics "host controller" chip that will exchange data with an external SuperSpeed USB drive from Buffalo Technology.
And USB 3.0 will be a godsend to video cameras--which often need to transfer gigabytes of video data. A prototype high-performance digital video camera from Point Grey Research will be rolled out that integrates a 3-megapixel Sony "IMX036" CMOS (complementary metal-oxide-semiconductor) image sensor to output 1080p high-definition images at 60 frames per second. This camera will stream uncompressed HD video to a laptop PC through a SuperSpeed USB ExpressCard from Fresco Logic.
Asus will also be present to show off its PC motherboard with SuperSpeed USB. The Asus X58 motherboard uses the same NEC chip and will exchange data with a LucidPort SuperSpeed USB mass storage device running the new USB Attached SCSI Protocol (UASP), which delivers improved performance and reduced latency.
The demonstrations will take place during two USB 3.0 technical sessions at IDF at the Moscone Center, San Francisco, starting on Tuesday.
Updated on September 16 at 6:30 a.m. PDT: adding information from Hironori Kasahara, a professor of computer science at Waseda University
Large electronics companies are building a chip for consumer electronics devices in Japan, while a China-based device manufacturer said it is working on devices using the ARM chip design, according to reports.
Waseda University's Hironori Kasahara wrote software for chips that Japanese companies are developing.
(Credit: Waseda Daigaku)In Japan, some of the country's largest electronics and chip manufacturers are collaborating in an effort to develop a new low-power processor design for consumer electronics devices, according to Nikkei, which Forbes reported earlier.
The Japan-based group includes Fujitsu, Toshiba, Panasonic Renesas Technology, NEC, Hitachi, and Canon. The Ministry of Economy, Trade and Industry will offer between 3 billion and 4 billion yen (between $32 million and $43 million) to support the project, according to Nikkei.
Each company will develop their own central processing unit, or CPU. The report claimed that the chips would be compatible with "energy-saving" software developed by Hironori Kasahara, a professor of computer science at Waseda University, Nikkei said. Kasahara said he was developing an application programming interface (API) for multi-core processors, in response to an e-mail query.
A prototype is able to operate using less than 30 percent of normal power consumption and works even when a power outlet is not available, according to Nikkei.
Once a standard is established--the companies are targeting 2012--the CPU will be used in TVs, digital cameras, and other products. The companies may also sell the chip to other companies for use in automobiles, servers, and robots, Nikkei said.
That doesn't mean, however, the CPU will be adopted across Asia. Following the Nikkei article, Taipei-based Digitimes reported that circuit board makers in Taiwan are not enthusiastic about the prospects of a new CPU architecture.
A more immediate threat to Intel--and possibly a more potent rival to any chip that emerges from the Japan-based chip consortium--is ARM, the power-stingy processor design already used by a host of chip manufacturers including Samsung, Texas Instruments, and Qualcomm.
Hon Hai--also referred to as Foxconn--the world's largest contract electronics manufacturer, is readying small laptop designs based on the ARM processor, according to various reports.
A special assistant to the Hon Hai CEO was quoted by Reuters as saying that the company has "a few smartbook projects" based on the ARM chip. Smartbooks are essentially a smartphone in a larger format, such as a small laptop or tablet. These designs are being promoted by Qualcomm, Nvidia, and Freescale, among other chip manufacturers.
Intel is developing a new version of the Atom processor, a so-called system-on-chip, or SOC, that is slated for use in smartphones as well as consumer electronics products. The smartphone and consumer electronics segments are already highly competitive, unlike the PC market, which is dominated by Intel.
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Worldwide server sales suffered a 25 percent drop in the first quarter, hitting their lowest level in at least 12 years, according to a new report from market tracker IDC.
The report, released Thursday, recorded first-quarter factory server sales at $9.9 billion, a drop of exactly 24.5 percent over the same period a year ago--and the lowest level since IDC began covering the market a dozen years ago.
The number of servers shipped fell 26.5 percent from the year-ago quarter, the smallest quarterly figure in the last five years.
IDC breaks the server market into three segments--volume servers (priced under $25,000), midrange ($25,000 to $499,999), and high-end enterprise ($500,000 or more). For the first time since 2002, all three segments saw lower revenue.
The low end of the market suffered the most, with quarterly sales sinking 30.5 percent year over year. Revenue in the midrange market slipped 13.6 percent, while high-end sales fell 19.5 percent.
"Market conditions worsened in all geographic regions during the first quarter as customers of all types pulled back on both new strategic IT projects and ongoing infrastructure refresh initiatives," Matt Eastwood, group vice president of Enterprise Platforms at IDC, said in a statement.
Among the top five server vendors profiled, Dell was hit hardest, with quarterly server revenue tumbling 31.2 percent. Hewlett-Packard showed a 26.2 percent decline. Sun Microsystems watched its revenue dive 25.5 percent. IBM saw its sales drop 19.9 percent. Sales at Fujitsu/Fujitsu-Siemens fell 18.8 percent.
IBM and HP are the top server vendors, with each owning 29.3 percent of the server market.
On an optimistic note, Eastwood did predict a slight turnaround later this year.
"Most enterprise organizations are deferring new IT procurements and instead focusing on extending server lifecycles and improving existing asset utilization," he said. "IDC believes that while these strategies are effective in the near term, server demand will begin to improve in the second half of the year as customers begin to rebuild their IT capabilities in advance of a meaningful economic recovery in 2010."
(Credit:
IDC)
Japanese electronics manufacturer Toshiba has agreed to buy over Fujitsu's hard disk drive (HDD) business, in a move aimed at expanding its footprint in the enterprise storage market.
In a statement released Tuesday, Fujitsu did not reveal how much the deal is worth but said the transaction is targeted to be completed in the first quarter of its fiscal 2009, ending June 30 this year.
Under the agreement, Fujitsu will transfer all its HDD-related businesses and functions to the new company, including HDD design, development, manufacturing and sales. It will retain a 20 percent share for "a certain period of time", before the new HDD business unit becomes a wholly-owned subsidiary under Toshiba, according to the statement.
The deal will enable Toshiba to "reinforce" its position as a vendor of small form-factor HDDs, commonly used in consumer electronics and mobile devices, the company said.
The agreement will also pave the way for Toshiba to enter the HDD market for enterprise servers and data storage system applications, enabling the company to expand its footprint in the solid state drive (SSD) segment.
Toshiba is hoping the deal will boost its share of the overall HDD market to over 20 percent by 2015.
Discussions between the two companies were made known last month when Fujitsu said it will halt production of read/write heads for HDDs, and Toshiba confirmed it was involved in negations regarding Fujitsu's HDD business.
In a separate statement Tuesday, Fujitsu said it is projecting a heavier net loss than previously forecast for the year, ending March 31, of 50 billion yen ($545 million). It earlier estimated a net loss of 20 billion yen $218 million). As a result of the HDD business reorganization and transfers, including its HDD media business to Showa Denko K. K., Fujitsu expects to incur related losses totaling some 35 billion yen ($382 million) for the full fiscal year.
The following businesses will be transferred to Toshiba:
• Fujitsu's HDD development, manufacturing and sales divisions;
• Fujitsu Computer Products Corporation of the Philippines and Fujitsu Thailand, which are both HDD manufacturing subsidiaries;
• HDD design, development, quality assurance and other departments under Yamagata Fujitsu;
• Fujitsu Laboratories' HDD technology development department; and
• HDD sales and marketing offices outside Japan.
Eileen Yu of ZDNet Asia reports from Singapore.
Spansion said Thursday that it is exploring a merger or sale, as the flash memory chip company delays interest payments on notes.
The Sunnyvale, Calif.-based company announced that it has been "exploring strategic alternatives, including, but not limited to, opportunities to merge with or sell to similar U.S. or foreign businesses."
Spansion, one of the largest flash memory suppliers, was formed by the integration of Advanced Micro Devices' and Fujitsu's flash memory operations in 2003. The company has posted a long string of losses as it has struggled to turn a profit in the fickle NOR flash memory business.
NOR flash is used in set-top boxes and cell phones but addresses a much different market than its better-known cousin, NAND flash. NOR is typically used to store and run computer code, while NAND is used for large-capacity storage, just like hard disk drives.
Spansion received a lukewarm response to its IPO in 2005.
The company said Thursday that it has engaged Barclays Capital "to assist the company in exploring these strategic alternatives," the company said.
In connection with this, Spansion has initiated discussions to begin an "organized process of potential balance sheet restructuring opportunities" and will delay making the interest payment on its outstanding 11.25 percent senior notes due 2016, which is due January 15, the company said.
Standard & Poor's Ratings Services on Thursday lowered its corporate credit rating on Spansion to "D" from "CCC" and the issue-level rating on the company's 11.25 percent senior unsecured notes due 2016 to "D" from "CC."
After a string of quarterly losses, Spansion, according to reports, is also considering Chapter 11 protection.
Updated on January 6 at 11:20 a.m. PST with correction about Nano 3000.
Dual-core Intel Atom rivals are in the works.
Via Nano procesor
(Credit: Via Technologies)Via Technologies is planning a very low-power, dual-core Nano 3000 processor, according to Chinese-language Web site HKEPC.
Via's C7-M processor is used in Hewlett-Packard's 2133 Mini-Note, which preceded the crop of Netbooks based on the Atom CPU. Via processors, however, were subsequently eclipsed by Intel's Atom.
Advanced Micro Devices will target its low-power dual-core "Conesus" at the laptop market segment above Atom's Netbook-centric space.
Meanwhile, Freescale Semiconductor has indicated that it will bring out a very-low-power ARM chip that features a dual-core graphics engine targeted at Netbook-like laptops.
All of these developments indicate that the market for ultra-small devices and laptops should heat up in 2009.
Intel currently offers the dual-core Atom 330 that is targeted at Nettops--small desktop computers.
The dual-core version of the Via Nano--due in late 2009 or 2010--may use a Fujitsu 45-nanometer or TSMC (Taiwan Semiconductor Manufacturing Company) 40-nanometer manufacturing process, according to HKEPC. The Intel Atom is based on 45-nanometer process technology.
(Correction: the Via Nano 3000 will not be dual-core. The dual-core version of Nano will ship in the second half of 2009.)
The Via chip may also include SSE4 instruction support, HKEPC said. Generally, SSE4 (Streaming SIMD Extensions 4) instructions speed up multimedia applications.
Via is also slated to bring out other improved Nano processors in 2009, according to the report.
Fujitsu is in talks to sell its hard disk drive business to Western Digital, according to a Japan-based report.
Western Digital is the second-largest hard disk drive maker in the world behind Seagate Technology. Fujitsu's HDD unit is ranked sixth.
Fujitsu would sell all of its plants--including those in Japan, Thailand, and the Philippines--for between 70 billion yen and 100 billion yen (approximately $660 million to $944 million), according to Japan's Nikkei news service.
This would be one of the largest business unit sell-offs for a Japanese electronics company, Nikkei said, adding that Fujitsu's hard disk drive business has been posting losses.
The deal would be finalized by the end of the year, according to Nikkei.
A Western Digital representative would not comment on the report.
Beyond the brutal price competition that is typical in the hard disk drive industry, there is a clear-and-present threat now from solid-state drives. Until this year relegated to digital camera and music player storage, solid-state drives are now making inroads--albeit small--in laptops, particularly ultraportables like the MacBook Air, Dell's new E4200 line, and Netbooks such as the Asus Eee PC.
Solid-state drive suppliers such Intel, Micron Technology, Samsung, and STEC are also beginning to target SSDs as replacements for hard disk drives in the enterprise.
