X86 Market Stalls. Will Servers Be Immune?

Market analysts say that the PC market (which includes x86 servers) performed worse than expected during the last quarter.
Market analysts say that the PC market (which includes x86 servers) performed worse than expected during the last quarter.The economic optimism seen just last week at CES evaporated this week. Market research firm Gartner Inc. has announced that 4Q08 showed the worst growth in the PC market since 2002in other words, since the last recession. The worldwide market experienced only a 1.1% increase over 4Q07.

Gartner's rival, IDC, did not disagree, and released figures showing that PC sales in the US fell 10 percent in 4Q08 compared to 4Q07.

This is of concern in this forum since both Gartner and IDC count x86 servers (the mainstay of the SMB server world) as PCs. If the PC market becomes unprofitable and stagnant, entry-level server development will lag.

In this case, Gartner and IDC agreed that Dell had noticeable problems competing, and while Dell hung on to the top spot in the US market, Hewlett-Packard ranked number one in the world market.

IDC said that Dell took a major pounding in the US market, with shipments falling 16.4 percent between 4Q07 and 4Q08. But even though its US market share fell from 30.7 percent to 26.5 percent it still held on to the top rung, beating Hewlett-Packard.

Gartner said that HP saw its worldwide shipments grow 12.7 percent, giving it 18.4 percent of the world market. Dell saw its worldwide shipments rise 11.5 percent, giving it 14.3 percent of the world market, on the rung just below HP.

But if things could be healthier, keep a couple of things in mind:

The first is that things could be a lot worseno one is predicting any vendors are going to go out of business. The PC market is not the buggy-whip market. People still need PCslots of them. The only question is the timing of their purchases.

The second is that these figures represent the pastalbeit the recent pastand optimism is about the future. Things could still get better. In fact, it's pretty much certain that they will eventually get better. Again, it's all a matter of timing.

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