Intel Corp. (Nasdaq: INTC) and other suppliers of microprocessors to PC manufacturers can expect improved conditions in 2013 as demand swings up again, with the industry segment positioning itself to regain market share lost to smartphone and tablet PC vendors.
Industry researcher IDC said in a report today that it sees microprocessor sales rising slightly to $40.7 billion this year, up 1.6 percent from 2012 on a 3.2 percent jump in unit shipment to 384 million. The company forecasts microprocessor sales will increase at a compound annual growth rate of 3.4 percent between 2011 and 2016, while unit shipments will grow at a slightly lower rate of 3.2 during the same period.
This doesn't mean PC microprocessor vendors can relax. The competition for market share between them and suppliers of processors to the tablet PC and smartphone segments will intensify in coming months as each side tries to convince consumers and corporate vendors of the superiority of their products.
Right now, the momentum seems to be on the side of smartphone and tablet PC vendors and their suppliers. Demand for these smaller form-factor products is surging, despite the introduction of ultrathin notebooks positioned as competitive alternatives, IDC says.
Shane Rau, vice president for PC and server semiconductor and enabling technologies research at IDC, explains:
Macroeconomic uncertainty has forced OEM and IT customers to reduce orders and focus on execution, and reduce expectations after the launch of Microsoft's Windows 8 operating system in late October. Delays in PC purchases caused by Windows 8 and the encroachment of media tablets on low-end PCs have further cut into PC microprocessor demand growth.
On a manufacturing and supply chain level, IDC has what I consider very important advice for microprocessor vendors. It suggests they focus on performance, execution, cost, and productivity improvements as well as innovation. It would also help, says Rau, if they improve the consumers' perception of PCs. This implies helping users see computers as value providers rather than mere functional devices. Rau continues:
For vendors of microprocessors and other PC technologies, the future belongs to those who can best execute on a vision of what computing ultimately should be and how users assess the value to them.
Vendors should strive for an increased perception of value so systems can be sold on their utility and not merely their price. Such a transformation requires time for assessment and education along the value chain. It also requires sustained investments in the PC ecosystem distinct from the investments going into the hot tablet ecosystem.
@Bolaji, I am optimisc about ultrabooks because they can be easily converted into tablets by removing the hardware keyboard. Moreover compared to tablets they offer better computational power. Its easy to type on ultrabooks because they offer hardware keyboard. Many people dont like to use touchpad to enter the data. So ultrabook is combination of tablet and laptop features.
tirlapur, The problem with ultrabooks is the price. They aren't cheap enough in my opinion to be competitive with tablets and don't have the storage capacity of regular notebooks. I've often wondered why anyone would buy them.
In fact, in terms of work performance, PC still outpaces the growing mobile device of Tablet PC
@Lily, how will you define work performance ? No doubt PC's offer high computational power but we many not need such high configuration to do every job. Simple jobs like data-entry can be easily accomplished using tablets.
Demand for these smaller form-factor products is surging, despite the introduction of ultrathin notebooks positioned as competitive alternatives
@Bolaji, thanks for the post. Ithink demand for ultrathin notebooks will increase in coming days because they are more powerful compared to tablets/smartphones and more easy to carry compared Notebooks. I think one reason why people are still not opting for ultrathin notebooks is because they are very costly.
In fact, in terms of work performance, PC still outpaces the growing mobile device of Tablet PC, so if C can maintain the advantage on this aspect, PC will not completely be replaced by Tablet PC.
...focus on performance, execution, cost, and productivity improvements as well as innovation. It would also help, says Rau, if they improve the consumers' perception of PCs. This implies helping users see computers as value providers rather than mere functional devices.
I keep reading recaps of CES and there is more attention paid to form factors than there is performance. I know that the consumer market is more concerned about look and feel, but with so many devices to choose from, something has to stand out. For my money, I'd rather it be the processing power
By moving to the core of the industry and offerings services that keep the system humming, a group within the electronics market has rendered irrelevant the question of ownership and control of the supply chain.
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Archived Dialogues
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Euro-Crisis: What It Means for High-Tech Firms Join EBN Editor in Chief Bolaji Ojo and Contributing Editor Jennifer Baljko on Thursday, July 12, at 10:00 a.m. EDT for a Live Chat on high-tech and Europe's economic difficulties.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
While no one really can accurately predict the future, we can take guidance from another Drucker saying which is the best way to predict the future is to create it.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.
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