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PCs Stage a Rebound, Boosting IC Sales

Don’t be in a rush to abandon your PC OEM customer: A mountain-worth of semiconductor products are still going into personal computing equipment and workstations, according to research firm {complink 7217|IC Insights}.

While the most coveted design sockets these days are those headed for smartphones, digital music players, tablet devices (iPad and e-readers), and other portable but non-PC equipment, almost one third of total semiconductor shipment this year will have been purchased by OEMs for use in PCs as sales recovered strongly to a record high.

DRAM and other memory products are leading the surge. After suffering severe price declines over the prior two years, memory products have recovered nicely due to an increase in demand for mobile PCs. IC Insight noted that “despite three previous years of decline, PCs are still the largest end-use application for integrated circuits, accounting for about 31 percent of the IC industry's total revenues in 2010.”

IC Insight's forecast through 2014 is even more mouthwatering as it shows demand for PCs climbing at a compounded annual growth rate of almost 11 percent to $101.2 billion, from an estimated $81.4 billion in 2010, up 34 percent from $60.7 billion last year. Mobile computers are driving the increase, according to the research firm, which also noted that the iPad from {complink 379|Apple Inc.} and other competing tablet devices have halted the rapid growth witnessed in demand for netbooks in 2008 and 2009.

“Inexpensive Internet-centric mini-notebooks were the darling of the portable PC market in 2008 and 2009, with annual unit shipments increasing by about 185% in each of those two years, but the fascination with downsized notebooks ended in 2010 after Apple introduced its touch-screen iPad and transformed the tablet-computer niche into a sensation in the larger consumer-PC marketplace,” IC Insights said, adding it “now sees tablet computer shipments reaching 14 million in 2010, up from a little over 1 million in 2009 (excluding dedicated e-book readers, such as Amazon.com’s Kindle).”

The resurgent demand for PCs has been good for {complink 1544|Dell Inc.}, which reclaimed its title as the No. 2 global personal computer vendor in the second quarter and held on tightly to the position in the third quarter, according to {complink 7427|iSuppli Corp.}

“Dell’s third-quarter PC shipments rose by 9.3 percent compared to the same period in 2009,” iSuppli said. “In contrast, No.3 Acer Inc. suffered a decline of 0.7 percent and No.1 HP experienced a 0.2 percent contraction.”

9 comments on “PCs Stage a Rebound, Boosting IC Sales

  1. DataCrunch
    December 7, 2010

    Bolaji, I see for the foreseeable future that PCs and laptops will be complimentary to tablets and smart phones and not outright competitive.  I for one am not ready to abandon my laptop/notebook computer and exclusively only use my tablet and/or smart phone.  On the contrary, I would venture to guess that the majority of tablet users today also own a PC.   But this doesn’t mean my point of view won’t change two or three years from now.

  2. SP
    December 7, 2010

    I too agree that PCs in any form whether laptops,notebooks or any conventional ones would continue to be in demand. You can do so much with computers these days that you hardly need any other source of entertainment. I guess its now a necessity of life.

  3. AnalyzeThis
    December 7, 2010

    While here in the states you'll talk to many IT people who insist that the PC is dying as a form factor and the future will be dominated by tablets and smartphones, I think that's important to note that there is still great potential for the PC desktop form factor in the developing world.

    And while the desktop PC does indeed seem to be decreasing in popularity, I think the future still remains bright for laptops/netbooks.

    So in other words, I agree: the PC market may not be as “cool” as it once was, but it's not going to go away, and there's still a lot of potential for growth. Just maybe not growth in the traditional places.

  4. tioluwa
    December 8, 2010

    We moved from first generation to 2nd, 3rd, now what generation are we at?

    Laptops came to give mobility, compact design and ease, now they have evolved to tablets and smart phones.

    Once tablest and smart phones can offer the processing power of a laptop, then they just might replace them, just the way laptops are facing out desktops.

     

    Turely some applications don't need them but where possible, tablets and smart phones just might take a more centre stage soon.

     

    I for one would love to be able to do whatever i want even on the go, and only a tablet or smartphone can offer me that.

     

    The day i get a smartphone that can run the applications i need to work, i can transfer my work to them when leaving the office and work as i go.

     

    It's the future.

  5. eemom
    December 8, 2010

    I agree that tablets will in the future take over for laptops.  I don't agree that it is anytime soon.  Tablets are in their infancy as far as consumer adoption.  It will take a long time before tablets hit the tipping point that laptops are at now.  Even then, Laptops will have a home in developing countries as they phase out desktops completely.  This process will take several years.

  6. tioluwa
    December 8, 2010

    I agree with eemon but as for the issue of developing countries, they don't always have to follow the trail of technological inovations if there are to develop.

     

    By that i mean, that depending on how fast technology grows, developing countries sometimes have to skip a generation or 2 or technological inovations, especially when they start to develop. This is the only way they can catch up. if they have to travel along the same technological road, they will never meet up.

    But truth be told, it will take a while for tablet to pick up, but who know, it just might be sooner than we think. it would be no fun if it takes donkey years.

  7. AnalyzeThis
    December 8, 2010

    That is true that developing nations do tend to skip a generation or two in regards to technological innovations, but I think one thing you are not considering is that PCs are often used differently in those nations as well.

    Laptops and tablets are great and all, but most of the time, these are not shared and are only used by one consumer. Part of the appeal of desktops is that they are more easily shared and managed by places like Internet Cafes.

    In the states, Internet Cafes (or whatever you want to call them) aren't that especially popular, but take a look at places like South Korea: despite the relative tech-savvy of the population and the insane, INSANE popularity of PC games there, a very large majority of the population utilizes computers in Internet Cafes and having a truly “personal” computer is less common.

    So I think it makes sense to me that in many of these developing nations, the desktop will be a very popular form factor as one machine can be easily shared amongst many members of a community. Plus, do keep in mind that these people would tend to have less incentive to have a personal device, as they would typically not utilize it as often as, say, your typical American would.

  8. elctrnx_lyf
    December 11, 2010

    The PC market is definitely set for new innings since we are hearing lot of new technologies being announced such as USB3 for the high-speed data transfer, Display port in the case of a digital display interface, 10G Ethernet and SSD's. The future PC's are also portable and could inbuilt all the newer technologies. Tablet market also is set to grow in a big way to provide the portable digital entertainment more than the computing experince to the users.

  9. itguyphil
    December 11, 2010

    Good point. I think the widespread usage of SSDs alone will boost PC sales. Just changing to a SSD in your PC can boost performance significantly (I've seen it myself). Once the prices begin to drop, it should be a good string of quarters for vendors.

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