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Product category: Recruitment, Reports and Resources
News Release from: Jon Peddie Research
Edited by the Electronicstalk Editorial Team on 22 September 2006

Workstation markets remain buoyant

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The string of good news continues for vendors serving the workstation markets, with the second quarter of 2006 yielding 22.9% growth in units and 15.9% for revenue.

The string of good news continues for vendors serving the workstation markets, with the second quarter of 2006 yielding 22.9% growth in units and 15.9% for revenue Jon Peddie Research has completed its quarterly market tabulations for both workstations and professional graphics as part of the latest instalment of its Workstation Report series

Workstation vendors shipped roughly 619 thousand workstations, accounting for about $1.5 billion in revenue.

Results for the closely coupled professional graphics market were even stronger, with units up 37.3% to 869.1 thousand and revenue up 15.4% to $284.1 million.

Dell held on to its top position as workstation vendor, with a 41% market share (units).

And Intel stayed dominant as the primary platform supplier, represented in roughly 92% of machines shipped.

Both market leaders had been losing ground to competitors in previous quarters, with Dell trailed closely by HP, and Intel dogged by AMD and its Opteron processor.

But the fortunes of the big two may have begun to turn around in the second quarter.

In the first half of 2006, Intel released its long-awaited Woodcrest (Xeon brand) processor and Glidewell platform, finally presenting a strong answer to AMD's Opteron, especially in higher-end, multisocket applications.

"A good chunk of Opteron's growth in workstations had been coming at Intel's expense", said Alex Herrera, JPR Senior Analyst and Workstation Report author.

"But the worst looks to be over for Intel, as the new generation Xeon platform appears to be holding onto market share".

Of course, where Intel's fortunes go, Dell's often follow.

The workstation volume leader's share also kicked back up a bit in Q2, the first increase in many quarters.

AMD's Opteron is by no means stalling in the marketplace, however, benefiting from the continued migration away from legacy, proprietary RISC platforms.

Opteron is now shipping in nearly 4% of workstations, with Sun and HP accounting for the vast majority of systems shipped.

The overall numbers for Q2 show the fundamental strength of the professional graphics, but JPR's findings also uncover many subtle undercurrents, one of which is a significant shift in how dollars are being spent.

Bucking the typical tendency for customers over time to expect to pay less and get more, professional buyers are forking over more dollars to get their hands on a slew of new high (over $950) and ultra-high (over $1500) products introduced recently.

Where the high and ultra-high segments comprised only about a quarter of total add-in card revenue two years ago, in Q2 2006 they accounted for roughly one half.

Nvidia is both the instigator and primary beneficiary of this trend.

Nvidia shipped 72% of all units, with ATI second at 24.4%.

But more significantly thanks to its attention to the high-end segments, the company has grown its share of revenue to a commanding 82.7%.

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