Category: News

Hard drive prices slowly returning to pre-flood levels

hddcloseupThe hard drive industry was hit hard by heavy flooding in Thailand back in 2011. Several plants, providing vital components for Seagate and Western Digital, temporarily went off line following the disaster. The shortage caused a massive surge in hard drive prices and its effects are still being felt.

Keen to provide a bit of perspective, Xbit Labs compiled an interesting chart of hard drive average selling prices, based on data from Seagate’s and Western Digital’s SEC filings over the last four years. Pre-flood average selling prices (ASPs) were between $45 and $55, but they soared to the $70 mark in Q4 2011. The recovery was painfully slow and although some rather optimistic analysts claimed the market would stabilize by mid-2012, we are still feeling the muddy aftertaste of Thai flood water.

According to the latest figures, average selling prices decreased to $62 – $63 per unit and they are still considerably higher than pre-flood prices. Prices are currently at 2008 levels, which means they are still too high for comfort. Of course, the effects of the global economic downturn and recent PC slump were not factored into 2008 pricing and ASPs should be significantly lower today, even after they are adjusted for inflation.
This is bad for consumers and system integrators alike, as they have to adjust their own margins to compensate for the higher prices.  What’s more, hard drive makers are probably not too keen to reduce their ASPs, as further cuts would negatively impact their margins while they are still reeling from flood-related losses. Western Digital CEO Stephen Milligan confirmed the company has more capacity, but it is throttling it to what it sees as demand, which is a polite way of saying WD is trying to keep prices artificially high.

It is even worse for end consumers looking to upgrade their PCs or get some cheap portable storage. Back in mid-2011, per-terabyte retail prices were at their lowest point, about €25 in European markets and a 2TB 3.5-inch drive cost roughly €50. By November 2011, per-terabyte prices hit €35 to €38 and they went on to peak at €50 to €55 by April 2012. Retail prices today are still significantly higher than in 2011 and they are in the €38 to €40 range across Europe.

Xbit also concluded that ASPs peaked in Q4 2011. In the meantime, SSD prices continued to tumble, but SSDs are still too costly to completely replace traditional hard drives. However, SSD shipments are expected to double in 2013, as they are the preferred storage option for Ultrabooks.

Hybrid drives are also entering the fray and they can be found in quite a few budget ultrathin notebooks, although their days in proper Ultrabooks are numbered. So far Seagate is the only hard drive maker to offer 2.5-inch hybrid drives in retail, but Western Digital is also entering the market and it showed off its first consumer friendly hybrid drives at CES.

Traditional hard drives are not going anywhere yet and it is evident that WD and Seagate have enough room to maintain a huge price advantage over SSDs, as they are artificially inflating prices. They can’t bridge the performance and power consumption gap, but by offering hybrid drives they can bring the best of both worlds to value-minded consumers.

 

Apple’s down but it’s far from out

Apple, iPadConsumer behemoth Apple reported its first quarter financial results yesterday and while it posted revenues of $54.5 billion and a net profit of $13.1 billion, compared to revenues of $46.3 billion and profits of $13.1 billion in the same financial quarter last year, profits were flat.

Gross margin fell to 38.6 percent compared to 44.7 percent in the same quarter last year. Apple is forecasting gross margins between 37.5 percent and 38.5 percent for its second quarter, with estimated revenues between $41 billion and $43 billion.

So, what’s the problem? CEO Tim Cook said that supply problems were a matter to be concerned about, despite media reports.  And Apple has got a stash of cash in its corporate coffers – not far short of $137 billion in both liquid ashes and in cash.  That gives it a pot of gold that would let it buy other companies to make a splash in new or other developing markets.

A bigger problem is its existing slew of products, including the wildly successful iPad and the solidly popular iPhone.  It does face a challenge on the tablet front – particularly so from Google and Amazon devices.  Microsoft Windows 8 using Intel chips may not be so much of a challenge.  Intel cannot necessarily lower the price of its microprocessors, given its business model and Microsoft appears to believe that tablet devices running the touch version of Windows 8 should command the same prices as Apple iPads, or be even more expensive.

Apple’s share price (AAPL: Nasdaq), stood at $460.15 at press time.

New generation Intel ultrabooks set to drive SSD growth this year

ssdA new wave of low-cost and attractive Ultrabooks could help double shipments of solid-state drives (SSDs) this year, IHS iSuppli has said.

According to the analyst company’s Storage Space Market Brief worldwide SSD shipments are set to rise to 83 million units this year, up from 39 million in 2012.

Shipments are set to continue to rise 239 million units in 2016, which the company said amounted to around 40 percent of the size of the hard disk drive (HDD) market.

SSDs can serve as an alternative to hard disk drives in personal computers and work by storing data using NAND flash memory semiconductors rather than through traditional rotating media.

In its report, IHS looked at traditional solid state drives in both the consumer and enterprise segments, as well as cache SSDs that along with an HDD component make up a composite storage products such as those found in Intel’s Ultrabooks.

The company said that Ultrabooks had played a part in the slump of SSDs last year. It said that despite SSD shipments rising by 124 percent, growth  had fallen short of expectations because sales faltered – due to poor marketing, high prices and a lack of appealing features.

It said the future depended on the new generation of Ultrabooks, which if, as predicted, take off this year, will see the SSD market growing at robust levels.

Intel, which has been plagued by poor Ultrabook sales despite all of its bluster, is still trying to break into the market, introducing a new range loaded with Windows 8 and Haswell microprocessor architecture.

However, other factors are also involved when it comes to the SSD market, with IHS pointing out that average selling prices for NAND flash memory have come down, in the process establishing new price expectations.

The lower prices are attracting deal-seeking consumer enthusiasts, as well as an increasing number of PC manufacturers that are now more willing to install the once-costly drives into computers.

Over in the enterprise sector, SSD use is also growing as a result of product introductions from major vendors and startups.

Ingram Micro makes changes to top level staff

IMIngram Micro is making some changes to its employee and portfolio line up.

Over the week the distie has announced a range of movers and shakers within its senior management level.

Yesterday it said it was saying goodbye to its executive vice president and chief information officer Mario Leone who was leaving the company at the beginning of March.

The company is yet to announce a successor for Leone who had been at the firm for four years, however, has said that while it looks for a suitable candidate Nimesh Dave,

Ingram Micro executive vice president, global business process and cloud computing, would step in and take responsibility and oversight of the company’s worldwide information and business systems.

And it seems the company is also making some top level changes over in North America with the news that it has promoted Kirk Robinson to senior vice president, Commercial Markets and Global Accounts for this region.

The promotion will mean that Robinson who has been with the company for 20 years, will now oversee ownership of the distributor’s global accounts and supervision of additional strategic key business units. He will also be responsible for managing the business leaders responsible for Ingram’s SMB, public sector and VAR business units.

Singing his praises the company said throughout his career with Ingram Micro, Robinson had made a “notable impact” on the success of its sales teams and was responsible for leading key initiatives including the launch of the distributor’s proprietary Business Intelligence Centre in 2009, which had “since grown into one of the company’s most valuable service differentiators.”

It added that under Robinson’s leadership, the commercial markets division and its SMB business unit had “reached record growth rates” and enabled hundreds of new channel partners.

Robinson joined Ingram Micro in 1993 as a sales representative and worked his way up to sales director. In 2003, he moved into the marketing department as senior director, channel programs and in 2004 he was promoted to customer and solutions marketing vice president. In September 2006, Robinson was named vice president of North America channel marketing. Then, in May 2010, he was appointed vice president of VAR sales, market development and business intelligence. Shortly thereafter, Robinson became the vice president of Ingram Micro’s US commercial markets business.

But it doesn’t end there, as well as promoting and losing staff, the company has also said that it will be making bigger moves in the physical security marketplace,  announcing that HID Global’s secure identity products will now be available to its US channel partners through the Ingram Micro North America Physical Security Business Unit.

The company said it had added this as security threats became more complex and business needed more robust services. It added this presented a growing business opportunity for channel partners specialising in this space.

Acer suffers in weak PC market, moves to ditch value brand

acer-logo-ceAcer is taking a beating on the back of a slow PC market and fears that it expanded too much, too quickly.

The Taiwanese outfit is the fourth largest PC maker in the world, and it peaked in 2010, when it briefly ranked second. However, things have gone downhill and on Wednesday Acer announced it expects to post a full-year net loss for the second consecutive year. It is also looking at a $120.1 million write-down on several value brands under its umbrella.

During the PC boom in the late nineties and early 2000s, Acer went on a massive shopping spree and picked up a number of value brands, including Packard Bell, Gateway, eMachines and E-Ten. The write down on said brands dragged Acer to a net loss and the company plans to discontinue the eMachines brand altogether.

Other PC makers are facing similar challenges, as they struggle to reinvent themselves and gain a toehold in emerging sectors, like smartphones and tablets. Acer has a small presence in both sectors.

The company’s phone business is practically negligible and its attempt to expand its presence in China in 2012, with smartphones based on Aliyun, a heavily customized Android-based OS, was promptly ditched after Google threatened to cancel the company’s Android license. Acer had a bit more luck with Android tablets and it is moving into the Windows 8 tablet space as well, but its efforts have been overshadowed by the likes of Asus and Samsung.

Even as it struggles to remain competitive in the PC market, burdened by underperforming value brands, Acer prospects in the heavily contested smartphone and tablet markets look even bleaker.

Brokerage houses Nomura Holdings and UBS are anything but optimistic and UBS cut its target price and maintained the “sell” rating on Acer stock after the report. Nomura was somewhat kinder, but it also maintained its “reduce” rating on Acer, Taipei Times reports.

“Longer term, we think Acer still needs to face the reality of how to rebuild the brand positioning/image for Packard Bell and Gateway amid intense competition and slowing PC industry growth,” said Nomura analyst Eve Jung.

Tablets set to take more PC market share

Apple iPadA market research company said that tablets are set to cannibalise more PC sales as their popularity continues to grow.

ABI Research estimates that 145 million tablets will ship this year, with 50 percent of sales outside the USA. Price, new entrants to the market and increased shipments into enterprise will help drive the growth.

Business sales will account for as much of 19 percent during 2013, and a variety of slates using Intel chips and Windows 8 will begin to make more impact this year, according to Jeff Orr, senior director at ABI.

Meanwhile Israeii company Perion said it conducted a survey of 4,400 iPad users about how they used their machines.  Ninety percent of those surveyed said they used their iPads to read and write email.

Women are more likely to read and write emails from their pads, while the favourite app is Apple Mail at 41 percent, Gmail at 31 percent and Hotmail at 13 percent. Eighteen percent of people use browsers to access webmail rather than using clients.

Gartner: Cloud providers need to look at security services to survive

cloud 2Cloud providers must look at offering robust security options to ensure they stay ahead of the game, Gartner said.

Rubbing its crystal ball, the analyst company has gone as far to say the US government could declare cloud services as a critical national infrastructure, as a result of expanding public clouds, along with the ever-persistent threat on private and public sectors’ infrastructures.

It said that in the future this could mean that future network security is based increasingly on virtual security appliances.

By 2016, Gartner said public cloud infrastructure will include and be mandated to critical national infrastructure regulations by the US. It said that this is a result of the economic downturn, with governments continuing to sniff out ways to reduce their IT operating expenditures, eliminate duplication across their IT organisations and optimise their compute resources, making cloud deployments an attractive option.

Apparently several key governments have created initiatives for the adoption of cloud-based services, however, Gartner pointed out that they are yet to see any negative impacts from the technology. Disruptions, brought around by attacks on cloud service providers, were minimal.

By 2015, 10 percent of overall IT security enterprise product capabilities will be delivered in the cloud.

However, Gartner warned that as the economy becomes more dependent on the cloud, the threats against these networks would grow, eventually impacting national security.

The company is advising security providers to prepare their technologies to address potential mandates for critical infrastructure protection of public cloud environments.

It warned that those who lag behind with their security could face difficult sales and be squeezed out of the market by cloud providers who had threat management processes in place.

Growth rates for cloud-based security services are set to overtake those of traditional on-premises security equipment over the next three years with operational cost reduction, flexibility of deployment across multiple IT environments, and fast implementation and product updates among major factors driving demand.

Gartner also pointed out that as cloud matures, security offerings will also evolve, with data loss prevention, encryption and authentication all becoming must-have services offered alongside the cloud.

As new players establish themselves with innovative offerings, existing companies will look to acquire them to expand their portfolios with new capabilities and remain competitive.

Fixing Nexus supply problems is Google’s new priority

nexus4-ceThe botched Nexus 4 launch has already turned into a rather embarrassing episode for Google, but Larry Page is trying to reassure investors and analysts, although it could be too little, too late.

Page mentioned the problems during Google’s Q4 earnings report, but he did not say much and he did not provide any new details.

Phones 4U gets ads banned by watchdog

phonesPhones 4U has earned itself a ban over two adverts after the Advertising Standards Authority  (ASA) described them as “misleading”.

The retailer fell foul of the toothsome watchdog after people complained that its “upgrades 4u and u and u” ads, aimed at trying to show that people could upgrade with the retailer on any network and not the one they were signed to, were misleading.

They said that  the claims didn’t apply to customers on all networks, including Three and Tesco mobile, as the voice over in the comical broadcast ads suggested.

Both ads  focused on a range of “comical characters”, being told they could upgrade their phones despite their traits.

The voice over said:  “Listen up you lot. You can upgrade your phones at Phones4U”. The ad featured a number of characters with a range of habits such as smelling of fish, keeping a lot of cats and wearing gilets. The voice-over indicated that they could all get upgrades saying “Upgrades for you and you and you at Phones4U”. The on-screen text stated “T&Cs apply”.

In the second ad the voiceover said: “Listen up you lot. You can upgrade your phones at Phones4U.” A woman asked, “I’m scared of long-term commitment. Can I?” The voice-over replied, “I hear you lady. With our exclusive jump contract you could update your phone every 6 months … Upgrades for you and you and you at Phones4U.” The on screen text said: “T&Cs and exclusions may apply”.

When questioned by the watchdog, Phones 4U tried to plead its innocence, telling the ad police that the purpose of the ads was to tell customers that it was possible to upgrade their handsets at its shops. It said there was a common misconception that this could only be done with an existing network provider and that it aimed to show that it offered upgrades on the majority of network providers, even if the customer did not originally get the handset or contract from its stores.

However, the shop chain acknowledged that some networks such as Three and Tesco Mobile were not partnered with it, and so customers of these networks would not be able to upgrade. It said that it had covered itself against this claiming that its  “T&Cs apply” text showed there were exclusions, as well as offering further literature on its site to back this up.

However, the ASA remained unimpressed, claiming that the content in the ads suggested that everyone could upgrade as a result of the characters used. It said that while some customers would understand “upgrade” as meaning a new phone, they may not have expected to change networks to do so. And while Phones 4U had tried to cover its back with the on screen text referring to T&Cs, the ASA wasn’t convinced these made it clear that it was only possible to upgrade on certain networks.

As a result the company was ordered not to show the ads again in their current form.

However, the ruling is probably a drop in the ocean for the chain which yesterday announced that it would be expanding its services to the mobile network industry.

The company said it plans to launch its first mobile network –  “Life Mobile” – which will run as a mobile virtual network operator on mobile operator EE’s 2G and 3G spectra when it launches in March.

High street footfall drops

highShoppers on the UK’s high street are continuing to decline, recent figures from the British Retail Consortium have shown.

One retail analyst has suggested the drop is partly thanks to a vicious cycle, where stores are forced to focus on their online efforts – but neglect shop fronts as a result.

The British Retail Consortium (BRC) released figures showing that shopper numbers had fallen by 1.2 percent in December, compared to the same time in 2011.

Shopping centres reported the greatest fall with a 2.8 percent decline, followed by out-of-town retailers, with a one percent fall, while high street locations saw footfall stumble by 0.5 percent.

The BRC said that the decline for the month as a whole came despite a rise of 7.5 percent in shopper numbers in the immediate week before Christmas.

The figures coincided with data released by the Office for National Statistics last week, which found that, although UK retail sales grew 0.3 percent in December, this figure was the lowest rise on record since 1998.

Patrick O’Brien, a retail analyst at Verdict, said there are a number of factors at play.

“Some shoppers stay away by online shopping, and this has let to retail chains investing less in their stores which in turn has made them less attractive creating a vicious circle,” he said, speaking with ChannelEye. “As a result, some high streets are looking very shabby indeed, and shoppers are tending to make one big trip to destination shopping centres such as Westfield Statford instead of several trips to the high street.”

Co-op Group hit by job cuts, scrapped IT system

Co-operative_headquarters_manchesterIt’s been a bad week for the Co-operative Group, with stories of job cuts and full-year profits almost written down to nothing.

The sorry story starts with the Co-operative’s banking arm, which reportedly spent its money on an IT system that could be scrapped. Sources told the Times that the cost of doing this could set the bank back by  £200 million – almost the cost of its full year profits.

The company had taken on the Finacle IT platform upgrade project in 2009 as part of  a £700 million integration programme linked to its partnership with the Britannia Building Society.

However, it has since had second thoughts about the system following a potential purchase deal of 632 branches from Lloyds Banking Group.

If the buy goes ahead, according to the Times, the Co-op will scrap the system and instead adopt the infrastructure currently used by Lloyds. This could land it with a huge hole in annual profits, which are set to be announced in mid-March. Last year’s earnings by the bank stood at £201 million.

A section of its retail arm is also struggling.  According to the BBC, the company has announced that 338 jobs could be slashed in the Midlands after plans to close its Fashion and Home department stores.

The announcement comes after the group reported “substantial losses,” and “changing retail behaviour” at its department stores in Derby, Ilkeston and Chesterfield, in Derbyshire; Coalville and Wigston in Leicestershire; and Stafford.

However, the Group said it will try to turn some of these stores into different entities, which could help keep job losses to a minimum.

Emerging markets open up to increased data centre investment

datacentrebatteriesAccording to a report from Tariff Consultancy Ltd, which focuses on data centre development in 11 emerging markets, Russia and Turkey are way ahead of the pack.

TCL looked at Albania, Bosnia, Bulgaria, Croatia, Macedonia, Moldova, Montenegro, Russia, Serbia, Turkey, and the Ukraine. Of these, the four largest are Russia, Turkey, Ukraine and Bulgaria respectively, though in the group, Russia by itself is expected to account for half of all data centre floor space by the end of the year.

Generally speaking, the size of the data centres are relatively small, TCL noted. In the 11 regions, the average size was just over 800 square markets, which is a great deal less than in established markets. The largest facility has up to 10,000 square metres of raised floor space. However, over the next five years, the total space should rise to 143,000 square metres, up from 109,000 at present – or a 30 percent increase going into 2018.

Pricing will also increase, with the average rack space rental increasing 10 percent up to 2018. The most expensive pricing is in the Russian market.

Trends outlined in the report mirror a transformation in the regions which are seeing more and more development and investment, both from foreign investors and by government, with a view to boost economic growth in the countries. This could also, of course, prove a boon to channel players looking for new markets to open up in. Ultimately, TCL concludes, the development of data centre space in these emerging markets proves high spec housing and hosting is no longer exclusive to established markets.

 

 

 

ARM set to grow share in server market

arm_chipA report from Markets and Markets (M&M) suggested that the micro server market will be worth $26.55 billion by 2014 and microprocessors based on ARM technology are set to take a significant share.

Micro servers major on low power consumption and have small footprints, and use multiple mobile processors. The main market will be small to medium sized businesses and applications use light duty web serving, can be used for dedicated hosting, cloud computing and analytics.

Right now, this sector only accounts for 2.3 percent of total server sales, but M&M predicts that in the next five years to reach between 25 and 30 percent of sales worldwide.

While some large enterprises are already using micro servers in an area dominated by Intel Atom and Xeon CPUs, 64 bit ARM processors are set to appear in 2014 and that will change the market dynamics, the research company said.

North America is the biggest market for micro servers currently, followed by Europe, but it is expected that the Asian region will overtake Europe by 2018.  Vendors already in the game include Intel, HP, Dell, Fujitsu and Samsung.

UK business head honchos to seek new ventures in 2013

officeAlmost a third of British business decision makers want to jack in their jobs for new challenges and more money, a survey has found.

According to AGM Transitions, of the 100 people asked, 31 percent said they were likely or very likely to seek out a new career this year. Money was the main driver to a change, with 37 percent citing this reason, while just under a fifth said they wanted a new challenge.

However, in the current economic climate only 37 percent said they were confident about securing a new role.

Of those hoping to move on, half said they would be turning to job websites, while just over a third said they would rely of newspaper adverts.

A further third said they would use existing business contacts, while the same proportion said head-hunters and recruiters would be their new best friends.

Despite social media increasingly being used for business networking and research purposes, 67 percent still do not use social media to promote or market themselves in the industry.

Finding the right opportunity was the most daunting aspect of changing jobs, with 40 percent admitting to this, while 23 percent said they feared change.

Cloud Distribution moves to change Value Added Distributor status quo

cloud1Cloud Distribution has hired start up guru Adam Davison in a bid to give its Value Added Distributor competitors a run for their money.

The company claims that other firms offer little or no support to as yet “undiscovered” vendors that have the potential to disrupt the UK market’s status quo.

It claims its new weapon will help it  search out next generation networking and security vendors, which will complement its portfolio of disruptive technology products.

Davison has been appointed to seek out companies wishing to bring innovative networking and security technology solutions to the UK. The company boasts it’s best placed to offer these firms the best foothold as understands the market and “delivers real value-add.”

Davidson’s team has, according to the company, already begun to develop tools for the channel, which will help launch these products to the market. These include tailored vendor support launch packs, bespoke sales training, pre-sales and technical training, a virtual marketing team and an end user pipeline generation platform.

Apparently these have all been created to help VARs get up to speed with the new products and grow a network of qualified opportunities.

Adam Davison says he has first-hand experience of what it’s like as a start-up trying to break through.  He added there was a real need for a “next-generation distributor” who was willing to put “evangelistic effort into less well-known, but high value proposition vendors.”

Adam’s appointment follows a series of new hires as Cloud Distribution expands and develops its team which has included James Ball, Technical Manager and Tracey Hannan, Sales Manager for the new Northern office.