It looks like $61 billion is the emerging number for the quarter's microprocessor sales — and all that has to be supplied. It also appears tablet and phone chips are now crowding out PC chips to an even more noticeable degree than in 2012, when chip sales rebounded sharply.
From the supplier's standpoint, this is when the story gets interesting. The shift from supplying PC to supplying mobile — as well as the bet on which OEM to drop — will become a self-fulfilling prophecy soon, not only because of consumer demand, but because of supply chain economics. At some point the disincentive to supply waning tech gets too great, and starts being reflected in rising prices for those chips. That creates a rise in consumer prices, and then you´ve got a vicious cycle, one that typically is the death knell of the old tech — in theory.
To be prudent, it´s only August, and these are analyst predictions rather than hard sales numbers. But if these sales numbers prove to have been driven increasingly by the booming mobile market, that would represent the latest in several quarters showing similar, trend-like data. That could finally end the argument over whether the supply of chips for PCs is tapering off slowly — or crashing.
Of course, the story so far comes down to whose numbers you trust. IC Insights' widely followed prognostications are calling for a 54 percent year-on-year increase for tablet processor sales. That's an immense jump. Only slightly more modest is their call of a 30 percent uptick in mobile phone chips.
By comparison, standard laptop processors appear to have suffered in part from the poor reception for Windows 8, which hit PC sales hard, and the whole supply chain with it.
“The falloff in standard PC shipments is a major problem for Intel and AMD since they have supplied more than 95 percent of the x86-based MPUs used in personal computers since the 1980s,” the research outfit claimed in their findings.
The other wrinkle in this story becomes clear when you look beyond the mobile versus PC stats, to a broader examination of the mobile wars. Suppliers bailing out of the waning PC processor market have a much less mature playing field. Nasdaq recently reported, for example, that user shifts among the major handset manufacturers have gone — forgive a technical term — completely bananas. In the past 12 months consumers have been jumping between Apple and Android, Samsung and HTC, etc., in a way that PCs haven´t experienced in decades.
This suggests shifting demand and a huge market for suppliers able to handle quick shifts in demand. Citing a Fortune item, Nasdaq's announcement noted that Apple tended to woo former Blackberry users, where Samsung won over the former Nokia clients. Apple, contrary to talk of a downturn, saw 20 percent of its new iPhone users coming over from Samsung, whereas Samsung only saw seven percent of its adopters coming from the other direction (after leaving an Apple handset and iOS).
For chip suppliers, the mobile wars have been the obvious battleground for years. However, the additional evidence that PC´s are not just a mature market, but rather a geriatric one, is new. The pricing issue has to hit its point of no return soon. The problem is, no one knows where that point is. Based on today's evidence, though, it´s getting closer… and it may happen fast.