The success of Chromebooks has forced Microsoft to drop its licensing fees on Windows 8.1 notebooks, in a move that is forcing down prices on the products and is good news for buyers.
According to financial analysts at Seeking Alpha, Samsung has decided to use an X86 processor for its Chromebook 2 – a win for Intel in the X86 stakes.
HP and Acer are already selling Windows 8.1 notebooks for less than $200 and that is likely to create something of a frenzy in the run up to the holiday period.
Seeking Alpha points out that Intel’s mobile chip unit posted an $1.04 billion operating loss for its financial third quarter, despite selling chips for 15 million tablets during that quarter.
Intel is attempting to make “significant reductions in contra revenues next year”, but the financial analysts say X86 mobile chips will carry on losing money.
Samsung has dropped using ARM based processors for its Chromebook in favour of Intel, but the bad news is that most market research shows that sales of tablets are slowing, particularly in mature markets.
Seeking Alpha said: “Intel is losing big money in its quest to sell 40 million tablet chips this year.”
Notebooks using the conventional Wintel model seem to be past history, but Chromebooks are selling like there’s no tomorrow.
That’s the conclusion of research by ABI Research, which said that shipments of Chromebooks soared by 67 percent in a quarter.
Acer is the top dog in the sector, followed by Samsung and HP – those three accounted for 74 percent of shipment share during the first half of this year. That isn’t going to change in the second half of this year, said ABI.
So-called vertical markets like schools are a driving force, and Chromebooks also sell well in emerging markets. But ABI said that North America will account for 78 percent of the Chromebook market and other regions such as Asia Pacific and Western Europe are set to grow shipment market share over the next five years.
Stephanie Van Vactor, an analyst at ABI, said that while Chromebooks might be a temporary fad like the netbook, but the price and design mean that it’s attractive to the world+dog.
“People are hungry for a product that is cost effective but also provide the versatility and functionality of a laptop,” she said.
While Intel turned in remarkably buoyant financial results last week, the news remains somewhat gloomy on the PC front.
Figures released by IDC showed that shipments to consumers in the potentially lucrative Asia Pacific region in the third quarter of this year fell by five percent compared to the same quarter last year.
Sales were up compared to the previous quarter by eight percent and totalled 26.6 million units.
China and India showed better than expected shipments in the quarter.
Handoko Andi, research manager for client devices at IDC said: “[Windows] XP migration helped boost commercial PC spending earlier this year. But in recent quarters, we have seen Microsoft add a lot to the entry level segment by launching the Windows 8.1 with Bing programme.”
Lenovo is numero uno iin the region, followed by Dell, HP, Acer and Asus. HP showed a decline of 16.1 percent in shipments in the region compared to the same quarter last year, while Acer showed an 11.2 percent decline.
Sales of notebooks in the third quarter of this year are only up by 2.6 percent compared to the same quarter last year, despite bullish talk by vendors like Microsoft and Intel.
Digitimes Research said shipments for the calendar third quarter amounted to 45.198 million units, with HP being the top dog worldwide.
HP had a market share of 21 percent, Lenovo 20.9 percent, Dell 12.5 percent, Acer 9.7 percent, Apple 8.5 percent, Asustek 8.3 percent and Toshiba 6.2 percent, the Taiwanese research unit estimated.
These of course are the brand names, but many of the notebooks are made by original design manufacturers (ODMs) based in Taiwan. These ODMs accounted for a significant 36,958 notebooks in the quarter.
The ODM battle is fought between Compal (34.5%), Wistron (15.7%), Inventec (6.7%) and Pegatron (5.7%).
Digitimes Research also breaks out the shipments in terms of screen sizes with 8.2 percent being sub 12 inch models, 13 percent 12 inch notebooks, 13 percent 13 inch units, 22.7 percent 14 inch units, 47.2 percent 15 inch notebooks and 6.1 percent 16 inches and above.
The market research unit does not, however, appear to have provided figures for touch and non touch screen machines.
The maker of expensive printer ink, HP has ended merger talks with EMC after months of useless negotiations.
Reuters reported that its deep throats in HP said hopes to merge two of the tech industry’s largest enterprise-oriented firms had been dashed.
Pressure is building on EMC to do some spinning off in an attempt to unlock shareholder value, become more agile, and capitalise on faster-growing businesses.
Executives from the two companies were still trying to hammer out a deal as recently as last week, but talks bogged down on price. We guess EMC really could not believe that printer ink had the same value as gold.
HP suspended its stock buyback program ahead of its November 25 earnings because the company said it is in possession of material non-public information. Chief Financial Officer Cathie Lesjak noted on a conference call that the non-public information pertains to a possible acquisition.
It is not clear what the two were thinking of merging. A straight-up merger of the two companies would have created one of the industry’s largest providers of data storage, and created a computing giant with deep penetration in the business of providing computing hardware and services to corporations. However last week HP announced its plan to split off into HP Enterprises, a tech infrastructure, software and services business, and HP which will play in the PC and printer markets.
Elliot Management, which owns 2.2 percent of EMC, has been vocal about wanting EMC to merge or spin off some of its assets, such as software subsidiary VMWare. EMC has said that it wants its company to stay together.
The much touted internet of things will bring a world where just about everything has microcircuitry from lightbulbs to coffee machines.
But, according to a report from ABI Research, there are enormous security and other risks associated with its implementation.
Those include safety, consumer privacy and data protection, the firm said.
Further, this type of network has risks in all of its core layers and when manufacturers create devices they are cost conscious and may not implement the safeguards that are the ideal.
“Manufacturers are still trying to find their feet and justify investment in secure design, development, and product lifecycle,” according to Michela Menting, a director at ABI Research.
Nevertheless she cites some companies that are taking the lead in making the internet of things safe rather than sorry.
Those include Arrayent, Hewlett Packard, Microchp, NXP Semi, Sonatype and Wind River.
A few weeks back we reported that the lucrative datacentre market could well be the target for new vendors to enter the fray.
Now there’s some hard evidence for that. Taiwanese firm Quanta Computer, which previously played in the original design manufacturer (ODM) game, and made notebooks for the major brands, has branched out into the server market.
Digitimes reports that Quanta has completely re-invented itself and is positioning itself to sell into the European datacentre market.
It is offering servers and services to European datacentres and has hired a sales team specifically for the territory.
It faces stiff competition from the likes of HP and Dell. But the advantage it has is that it has its own manufacturing and further has played the very slim margin game when it made notebooks for multinational brands like HP and Dell.
The move is likely to be good value for the datacentre buyers because there’s no doubt such moves will prompt something of a price war in the sector.
The decision by HP to split itself into two companies has the whiff of desperation about it.
One wing will sell printer ink and PCs, while the other will position itself selling into the enterprises with services and hardware.
Meg Whitman said that the move is intended to give both wings flexibility in the different marketplaces they represent but the end result is more likely to be confusion than clarity.
And it is worth contrasting Hewlett Packard with Dell. The latter has managed to re-engineer its entire business over the last five years and be successful in selling into services, into software and for the PCs that have brought it smelling of success. It uses its different services and products to leverage its sales. And it doesn’t panic, Captain Whitman.
The devil is in the HP detail.
The newly spring Hewlett-Packard Enterprise and HP Inc could well end up competing with each other but that isn’t the least of their problems. The move will mean a big shift in its relationship with its partners – some of which sell the entire range of HP kit and services through distribution. Those details will take quite some disentangling.
HP is in the fourth year of its five year plan but this looks a bit of its plan that wasn’t originally part of its five year plan.
Whitman said that by moving one HP to two HPs it will be in a better position to compete, support its customers and partners and also bring in extra cash for its shareholders. That’s what she hopes.
HP one and HP two hope to complete the separation by the end of its financial year 2015. Whitman will serve on the boards of HP one and HP two. That will be jolly interesting when the two companies finally get their infrastructure act together.
The official release doesn’t say how HP one and HP two will share their technology, and employees – who have since big restructures over the last three years – just exactly feel about all or any of this.
Wall Street seems to like it – HP’s share price rose as the news was confirmed yesterday.
Just a day after HP decided to split itself in half, a report suggests that it is the only of the top five brands to see a decline in notebook shipments in September.
Data published by Digitimes Research said that, over all, the top five vendors showed growth of 19 percent last month. Asustek managed to grow its shipments by 70 percent compared to the same month in 2013 and Lenovo managed 40 percent growth.
There are some sea changes in the market in any case, said the research arm. Samsung and Toshiba have decided to retreat from some segments of the market. Samsung, for example, has given up the ghost on Chromebook sales in Europe.
Toshiba has exited several markets including South Krea, China and Russia.
The report said that adoption of Windows 8 has been pretty patchy, but Windows 10, due to arrrive in the second half of next year, might well give Microsoft a boost on the upgrade front. People can move from Windows 8 to Windows 10 without paying any more and that’s a tacit admission that it thinks it was a flop too.
Update: The news has now been confirmed. The Wall Street Journal has penned a piece which claims that the maker of expensive printer ink, HP, will announce that it will split into two today.
HP wants to separate its personal-computer and printer businesses from its corporate hardware and services operations.
The company is expected to make the split through a tax-free distribution of shares to stockholders next year.
If the split happens there would be two publicly traded companies, each with more than $50 billion in annual revenue.
Break-ups are very now amongs big companies. eBay broke up lately, in part because of a belief that operations with different growth profiles are best managed as separate entities.
HP has suffered sharp sales declines and sees better long-term potential for its corporate hardware and services business than for its printer and PC unit so it is best that its hardware bits were lopped off, the Wall Street Journal claims.
Former chairman Ralph Whitworth said in a text message Sunday that it would be a brilliant move at just the right moment in the turnaround. It would liberate significant trapped value.”
The news has also resurrected the rumoured merger of HP with data-storage equipment maker EMC. The talks recently ended, but the separation could pave the way for HP’s corporate hardware and services business to be combined with EMC.
It seems that the break-up has been on the cards for some time. HP mentioned the idea in 2011, when it announced the ill-fated acquisition of UK software company Autonomy. At the time HP said then it was exploring a separation of its PC business, only to decide two months later to hold on to it.
Barron’s claims that DRAM demand and a lack of producers will drive Micron’s share price to over $50 in their October 6th issue. They cite business PC replacement and Big Data as the market drivers behind the price climb and the fact that there are only three major producers remaining.
The simple deduction is that the DRAM market will be capacity limited for the foreseeable future. Of course this doesn’t factor in splits between Flash and DRAM demand confusing the production mix – end result is a higher price for both.
An interesting nuance to Barron’s forecast for Micron is the introduction of a next generation non-volatile memory that reduces the price of storing very large database images.
Glimpses of HP’s version in “The Machine” using Memristor based memory is scheduled for launch in 2018 – implying that the first production devices will need to be extant by early next year. HP’s record on the Memristor Project has missed each and every promised milestone so the success expectation probability is low.
Tell Tales Out of School
An intriguing story making the underground rounds in the Valley concerns the existence of an extremely secretive program involving a new, high speed, non-volatile memory coupled with DRAM. No it’s not the Diablo Technologies, Inc. Memory Channel Storage (MCS) – though somewhat similar it couples extremely dense non-volatile storage with low-latency parallel caching loads of high-speed low-power DRAM main storage.
The membership is limited to an exclusive set of players on both the supplier and user sides.
This is in step with a major effort to move from SATA serial interface non-volatile memory (SSD) to a high performance parallel interface. The discussion centers on whether the transition will include NAND-Flash or will begin a fresh start with the next generation replacement.
The idea has begun to percolate through the JEDEC Standards Committee. Sources predict that this will be accelerated through the standards process by an influential member group at JEDEC.
Killer Elite Application
What is the application – the one that motivates the factory to produce massive amounts of these devices. My contact looked me straight in the eye with that “you idiot look” and exclaimed, “Everything”. That’s when I got it…,
Once Again, HP has decided to evolve the PC and Printer operations as a distinct and separate corporate entity.
HP came close to selling both divisions during the short reign of Leo Apotheker. After the discovery of a massive over payment for Autonomy Corp. HP’s Board decided Leo had to go and PC & Printers had to stay.
Slipping to the number two position behind Lenovo, HP has decided to spin the combined organization into a separate entity under the aegis of Dion Weisler as CEO (Weisler is an exec in the PC and printer operation currently). Patricia Russo will be installed as the Enterprise company’s new Chairman (former lead independent director). Meg Whitman will remain CEO of the Enterprise company and oversee corporate guidance of the PC/Printer entity as Chairman.
What difference does this make? Reporting structures loaded with changes in culpability mostly, freeing Whitman up for minding the Enterprise store and:
- Aligns Weisler for the fall when and if the PC/Printers Division comes in under plan.
- Allows time to position the PC/Printer Group for a potential sale.
HP has been struggling in their efforts at penetrating the Cloud with their Moonshot technology – Whitman may find the ice a little thin for skating this Winter and into next Spring.
HP’s merger discussions with EMC recently ended. We’re left wondering if what we are now seeing is part of a “Plan B” by HP’s Board of Directors…,
As we reported yesterday, Lenovo will acquire Intel’s X86 server business this week and that means it will be the biggest server company in mainland China.
Market research firm IDC released its figures for server sales in China for the first half of this year and Lenovo – which includes prior IBM system business – comes out the leader at 23.91 percent (see chart).
IDC said that the Lenovo/IBM X86 server line and IBM’s System x mainframes are highly complementary and Lenovo will use that synergy to sell more X86 systems into large organisations.
But Dell has been highly competitive in the Chinese market, and Lenovo’s entrance into this space is likely to lead to even more competition.
IDC thinks that Lenovo will integrate channels to market of IBM’s System x machines with its own routes to market and the entry of Lenovo as a player is likely to lead to better cooperation with Microsoft and VMWare.
And in the global market, Lenovo shows up as a leader with a market share of 11.7 percent.
The maker of expensive printer ink, HP, seems jolly keen on putting Google’s Chromebook out of business. This week it announced several new stream notebooks. For those who came in late the Stream series is HP’s version of the low cost Windows laptop, meant to compete head to head with Chromebooks on price.
The difference between the two is that the Streams still offer a fully fleshed out operating system. The Stream 14 is available to purchase now for only $299, and comes with an AMD A4 APU, 2 GB of RAM, and 32 GB of eMMC storage.
Now HP has fleshed out its range and announced two additional laptops, and two tablets.
The laptops come in two screen sizes with the smallest being 11.6” and the mid-size being 13.3” and these are to compliment the already released 14” model.
HP is not saying what the exact specifications have not been disclosed yet, but both units will be powered by an Intel dual-core Bay Trail Celeron processor. This means that it is a fanless device, and both come with 2 GB of RAM and 32 GB of eMMC storage. The 13.3” device has an optional touchscreen to go with the 1366×768 resolution that both laptops share. The 13.3” model also is available with optional 4G connectivity. HP is including 200 MB of free data every month for the life of the device. As another value add, HP is offering one year of Office 365 personal, which includes 1 TB of online storage and 60 Skype minutes per month.
Battery life is eight hours and 15 minutes for the 11.6” model, and seven hours 45 minutes for the 13.3” model.
The HP Stream laptops are available in several colours, and will be priced at $199.99 for the 11.6” model and $229.99 as the starting price for the 13.3” model.
HP also announced the HP Stream 7 Tablet, which is a 7” Windows 8.1 that comes in at only $99.99. There is also the HP Stream 8 which has a starting price of $149.99. Both tablets are powered by Intel Atom quad-core processors, and 1366×768 screens. Like the larger of the two laptops, the 8” tablet, if equipped with the optional 4G, comes with 200 MB of data per month for the life of the device, and both also come with Office 365 personal for one year.
In a sign that things wont be what they were in the past, HP said it has announced two servers based on ARM architecture, rather than the old fashioned Intel stuff.
The two enterprise class servers use 64-bit ARM microprocessors which it said “offer value choice in their compute strategy”. Translated out of marketing speak, this means ARM based chips are much cheaper than Intel X86 chips.
HP is also offering a production platform letting software developers create, test and port applications to the ARM server.
The servers belong to HP’s Proliant Moonshot family – the company claims that they will let companies scale to any workload, and are specifically aimed at datacentres.
The HP Proliant m400 server is part of a strategy the company has developed over some years to fit high engineering standards.
“ARM technology will change the dynamics of how enterprises build IT solutions to quickly address customer challenges,” said Antonio Neri, senior vice president and general manager, Servers and Networking, HP. “HP’s history, culture of innovation and proven leadership in server technology position us as the most qualified player to empower customers with greater choice in the server marketplace.”
The servers will support Ubuntu, Metal as a Service (MAAS) software preinstalled, and also offers IBM Informix.
HP customers already include Sandia National Labs, the University of Utah and Paypal. The servers are available today.