Processor Shipments Reflect Robust PC Market

Rising demand for notebooks and dropping prices are two signs of the current healthy PC market, analysts say.

These are good times for the PC market. These are good times to buy a PC.

Two recent reports from IDC on microprocessor and PC sales indicate that demand for PCs is booming—microprocessor sales shot to $8 billion in the third quarter of 2007, up 14.8 percent, and PC shipments jumped to 68.5 million units shipped in the quarter, also a 14 percent rise.

"The results indicate that recent, current and near future demand for PC processors and for PCs themselves is healthy," Shane Rau, an IDC analyst and co-author of the Oct. 24 report on microprocessors, wrote in an e-mail to eWEEK.

It should come as no surprise that notebook sales are leading the way. According to the IDC report, laptop processor shipments increased 26.6 percent in the third quarter, although shipments of chips for desktops and servers also increased. Part of that increase is being driven by the consumer market, as more and individuals are using notebooks and moving away from traditional desktops, but the shift also reflects a work force that is demanding more mobility and flexibility.

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For buyers, whether IT workers or consumers, these developments mean vendors such as Hewlett-Packard, Dell and Acer are putting more features into their laptops to distinguish one from the other. At that same time, the continuing competition between Intel and Advanced Micro Devices has helped bring prices down.

Click here to read more about the struggle between Intel and AMD for the mobile processor market.

"A simple benefit for IT buyers is [having the] choice of either cheaper PCs or PCs with more robust configurations," Rau wrote. "The low end of the PC market is getting lower and the high end of the PC market is getting higher. Another benefit for IT buyers … is choice of more types of PCs, such as mobile PCs that emphasize performance and large screens as compared to mobile PCs that emphasize long battery life, low weight and a slim form factor."

Intel continued to lead the x86 processor market with about a 76 percent share in the third quarter, while AMD remained in second place with a 23 percent share. Those numbers mirror the market share both companies had in the third quarter of 2006, according to IDC.

In the mobile space, AMD increased its market share from 16 percent in 2006 to nearly 19 percent in the third quarter of 2007. Intels market share fell from about 83 percent down to 80 percent. When Intel announced its third-quarter earnings in October, the company also announced that it had shipped a record number of processors, resulting in $1.9 billion in net earnings, but the average sale price of each chip in its portfolio remained flat compared with the previous quarter. AMD also reported record mobile processor shipments but took a loss, partly because of the ATI acquisition.

In the area of servers, Intel took away market share from AMD. Intels third-quarter market share stood at 86 percent of the market compared with 75 percent in 2006. AMD, which experienced delays in bringing its quad-core Opteron processor to market, fell from 24.6 percent last year to 13.9 percent during the third quarter.

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