[July 04, 2008]

AMD Up, HP Down in the Numbers Game

(www.internetnews.com Via Acquire Media NewsEdge) People will be eating hamburgers and hotdogs this Fourth of July, but today Gartner had to eat a little crow. It reissued its Q1 2008 server sales figures after receiving updated information on HP server sales and realized that the change was enough to warrant issuing a correction.

Gartner reported last May that worldwide server revenue rose 4.3 percent in the first quarter of 2008 to $13.6 billion. However, the company received new information that caused it to change the figures on HP sales.

Without getting into details on the process, Gartner research vice president Jeffrey Hewitt explained that the estimates are based on financial results that don't go into this level of detail, so Gartner does a lot of its own detective work to come up with its own numbers.

HP (NYSE: HPQ) revenue is made up of a bunch of different server segments, and there were changes in the average selling prices (ASPs) to some of the servers. The number of servers shipped does not change, only revenue derived from them, he explained. However, it was enough to affect the overall Q1 number and cost HP it's top spot in server revenue over IBM (NYSE: IBM).

So Gartner felt it had to clarify the numbers. "It's been years since we reissued data in a relatively short time from what we published," Hewitt told InternetNews.com. "We're pretty loathe to do that, but this was a case where we got additional info after the fact and felt we had to make some tweaks here. We realized it's not something we wanted to wait on."

Hewlett-Packard's revenue was initially put at $4.010 billion, for 29.6 percent of the overall revenue and 10.3 percent year-over-year growth. That was enough to put it just ahead of IBM, with $3.912 billion in revenue.

The revised numbers now put HP revenue at $ 3.773 billion for 28.3 percent of the overall revenue and 3.8 percent year-over-year growth. IBM's $3.912 billion remains unchanged and it moves into first place, barely.

It's hardly bragging rights for IBM. "The overall outlook doesn't change in term of long term or short term. It's one of those things where we decided based on the input, we needed to adjust ASPs," said Hewitt.

Next page: Up slope for AMD

Page 2 of 2

Up slope for AMD

There's some upside news for AMD. After several consecutive quarters of bleeding money, customers and marketshare, iSuppli said the company is finally gaining customer share. It's still marginal compared to Intel, but up is better than down.

In the first quarter of 2008, Intel accounted for 79.7 percent of global microprocessor revenue, up 1.2 percentage points from 78.5 percent in Q4 2007. However, Q1 08 was down 0.7 percent compared Q1 07.

In contrast, AMD lost market share on a sequential basis in the first quarter, taking 13 percent of global revenue, down 1.1 percentage points from 14.1 percent in the fourth quarter of 2007. On the other hand, the company managed to increase its share by 2.2 points compared to the first quarter of 2007.

AMD (NYSE: AMD), though, saw some year-over-year growth. It went from 10.9 percent in 1Q07 to 13.0 percent in 1Q08. That first quarter number was actually down from 14.1 percent in Q4 '07, but given seasonal shifts, that's about in line.

"Intel was the short-term winner in the first quarter microprocessor market," said Matthew Wilkins, principal analyst, compute platforms, for iSuppli in a statement. "But over the previous 12-month period, the trend is reversed, with AMD growing its share."

About half of AMD's long-term growth came at the expense of Intel (NASDAQ: INTC), said iSuppli. The remainder came out of the market-share of smaller suppliers.

In good news for both companies, iSuppli found that robust demand is keeping ASPs up from the fourth quarter, the busiest quarter of the year, to Q1, one of the slowest. The firm said this was an indication that price pressure has decreased and the pricing war between the two microprocessor suppliers has abated.

iSuppli's latest global PC forecast calls for unit shipment growth of 10.5 percent in 2008.

Copyright ? 2008 Jupitermedia Corp.

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