After a number of failed attempts in the Android tablet market, Dell is looking to readdress the tablet space with Windows 8. According to a leaked document obtained by Neowin, Dell will launch a 10.8-inch tablet with 1,366 x 768-pixel resolution and a dual-core Atom processor later this year. The slate will also be equipped with a fingerprint reader, an 8-megapixel rear camera, a 2-megapixel front-facing camera, Intel graphics, 2GB of RAM and a massive 128GB solid-state drive. Unlike many other tablets, Dell has included a removable battery that will come in two sizes. A smaller battery will get between six and eight hours of battery life, while a larger one will offer between 10 and 12 hours of usage per charge. The tablet is rumored for a late fall launch, and no pricing details were reported.

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Apple on Wednesday unveiled its new iPad, a sleek slate with a stunning 2,048 x 1,536-pixel Retina Display, a speedy Apple A5X processor and embedded 4G LTE. The Cupertino, California-based company repeatedly tossed around its “post-PC” buzzword — Apple’s post-PC devices accounted for 76% of its revenue in the fourth quarter last year — and there is no question that the new iPad will be a hit. Does it spell the end for PCs, however? Not according to market research firm Gartner. Read on for more.

In 2011, the PC market was flat according to Gartner. Shipments totaled 350 million units last year, just as they did in 2010. Despite increased pressure from Apple’s new iPad and a continued flurry of Android tablets due to hit the market in 2012, Gartner sees the PC market picking up this year, with shipments growing 4.4% to 368 million units. The firm’s projected growth is hardly impressive compared to the 13.8% the PC industry grew in 2010, but it does point to a rebound.

“PC shipments will remain weak in 2012, as the PC market plays catch up in  bringing a new level of innovation that consumers want to see in devices they purchase,” Gartner analyst Ranjit Atwal said in a statement. “The real question is whether Windows 8 and ultrabooks will create the compelling offering that gets the earlier adopter of devices excited about PCs again.”

Atwal does suggest that media tablets like the iPad could begin to have a direct impact on PC sales moving forward, which is a notion many industry watchers had rejected until recently. ”Consumers will now look at a task that they have to perform, and they will determine which device will allow them to perform such a task in the most effective, fun and convenient way,” the analyst said. “The device has to meet the user needs not the other way round.” Gartner’s full press release follows below.

Gartner Says PC Shipments Will Grow 4.4 Percent in 2012

PC Market to Exhibit Higher Growth by End of 2013

STAMFORD, Conn., March 8, 2012— Worldwide PC shipments are on pace to total 368 million units in 2012, a 4.4 percent increase from 2011, according to the latest forecast by Gartner, Inc. PC shipments are forecast to see higher growth by the end of 2013, when shipments are expected to reach more than 400 million units.

“PC shipments will remain weak in 2012, as the PC market plays catch up in  bringing a new level of innovation that consumers want to see in devices they purchase,” saidRanjit Atwal, research director at Gartner. “The real question is whether Windows 8 and ultrabooks will create the compelling offering that gets the earlier adopter of devices excited about PCs again.”

In addition, while the economic environment and supply issues played a key part in the weaker PC market, it was a lesser concern to PC vendors compared to the far greater issue of changing consumer dynamics.

Gartner analysts said that 2011 redefined the landscape of the device market. “The use of applications such as e-mail, social networking and Internet access, that were traditionally the domain of the PC, are now being used across media tablets and smartphones, making these devices in some cases more valued and attractive propositions,” said Mr. Atwal. “Consumers will now look at a task that they have to perform, and they will determine which device will allow them to perform such a task in the most effective, fun and convenient way. The device has to meet the user needs not the other way round.”

Gartner expects ultrabooks will garner greater attention in the latter half of 2012, as the industry looks for this platform to reinvigorate the mobile PC form factor. “However, PCs will face more  competition as we see new media tablets based on operating systems from Android and Microsoft, as well the new iPad,” Mr. Atwal said.

“Moreover, we expect the shift to the personal cloud will also accelerate as consumers increasingly adopt cloud-based services as part of their digital ecosystem,” Mr. Atwal said. “The evolution of the personal cloud will challenge vendors across all mobile devices markets and add to the hurdles for PC vendors to overcome to revive the PCs and differentiate them from tablets. The creation of content capabilities of PCs may not be enough to counteract the better content consumption capabilities of media tablets.”

Mature PC markets will continue to be replacement market driven and their volumes will be much less than their emerging market counterparts.

“Emerging markets are key to driving worldwide PC growth in both the short and long-term, and our expectation is that 2012 and then 2013 onwards will be supported by growth in emerging markets as their share increases from just over 50 percent in 2011 to nearly 70 percent in 2016,” said Mr. Atwal. “Emerging markets have very low PC penetration and even with the availability of other devices we still expect a steady uptake of PCs.”

Additional analysis is available in the Gartner on Demand webinar “Gartner PC and Media Tablet Forecast Update, 1Q 2012.” The webinar is available at http://my.gartner.com/portal/server.pt?open=512&objID=202&mode=2&PageID=5553&resId=1921116&ref=Webinar-Calendar.

Apple’s shipments of iPads and MacBooks in the fourth quarter combined to give the Cupertino-based company a 26.6% percent share of the mobile PC market, according to a report from DisplaySearch released on Thursday. Apple shipped a total of 23.4 million units, nearly three times the amount of No.2 HP. The iPad accounted for 18.7 million units and captured 59.1% of the tablet market. Amazon shipped 5.3 million Kindle Fire’s for 16.7% of the market, with Samsung shipping 2.1 million and controlling 6.7% of the market. ASUS shipped 1.5 million units for a 4.6% market share and Barnes & Noble shipped 1.1 million units for a 3.5% share. Apple’s fourth quarter notebook shipments came in at 4.6 million units for an 8.3% share of the market. Ranking ahead of the Cupertino-based company was HP (15%), Dell (11.8%), Acer (11.8%) and Lenovo (10.8%). Read on for DisplaySearch’s press release.

Apple Maintains Top Mobile PC Share Position for Q4’11 and Full Year

HP, Dell, Acer and Lenovo Round Out Top Five Spots; Apple Y/Y Shipment Growth Tops 125% for the Quarter and the Year

Santa Clara, Calif., February 23, 2012—Apple shipped nearly 23.4 million mobile PCs in Q4’11, up 128% Y/Y, and over 62.8 million mobile PCs in 2011, up 132% Y/Y, according to preliminary results from the latest NPD DisplaySearch Quarterly Mobile PC Shipment and Forecast Report. Nearly 80% of Apple’s mobile PC shipments were iPads, more than 18.7 million shipped in the quarter, up 156% Y/Y, and 48.4 million units for the year, up 183% Y/Y.

Overall mobile PC shipments grew 12% Q/Q and 44% Y/Y, reaching 88 million units in Q4’11. This was driven by continuing strong demand for tablets. Tablet PC shipment growth was 42% Q/Q and 210% Y/Y, reaching 31.7 million units in Q4’11. Notebook PC shipments were flat Q/Q but up nearly 11% Y/Y, reaching 56.3 million units. As expected, consumer mobile PC adoption was focused on tablets, holding up demand in notebooks.

“Mobile PC brands read the writing on the wall in the fourth quarter,” said Richard Shim, NPD DisplaySearch Senior Analyst. “Consumer demand for notebooks was expected to be weak following modest back-to-school results, especially with the expected launch of Windows 8 on the horizon, and increasing interest in tablet PCs. As a result, brands focused their typical holiday price cuts on tablets to boost demand.”

Apple’s 26.6% share in Q4’11 is largely due to its dominant position in tablet PCs, which propelled it to nearly three times the shipments of HP. The other brands in the top five market share rankings relied almost exclusively on notebook PC shipments to establish their positions.

Table 1: Preliminary Q4’11 Worldwide Top Five Mobile PC Shipment Rankings by Brand

Rank	Brand	Units (millions)	Share (%)
1	Apple	23.4	26.6
2	HP	8.7	9.9
3	Dell	6.9	7.9
4	Acer Group	6.8	7.7
5	Lenovo	6.3	7.2

Source: Q1’12 DisplaySearch Quarterly Mobile PC Shipment and Forecast Report

HP maintained the top notebook PC ranking with a 15.5% share, although it lost some of its lead as shipments into North America, China, Latin America, and Asia Pacific faltered. Dell and Acer essentially tied for second place with 11.8% each. Dell had strong results in EMEA, while Acer continued to struggle in the notebook PC market. Lenovo continues to build on momentum started early this year with strong growth in China and Asia Pacific with a dip in North America, and maintained its #4 position in notebook PCs, gaining some share in Q4’11. Apple leapfrogged over ASUS and Toshiba to capture #5 with 8.3% market share.

Table 2: Preliminary Q4’11 Worldwide Top Five Notebook PC Shipment Rankings by Brand

Rank	Brand	Units (millions)	Share (%)
1	HP	8.7	15.5
2	Dell	6.7	11.8
3	Acer Group	6.6	11.8
4	Lenovo	6.1	10.8
5	Apple	4.6	8.3

Source: Q1’12 DisplaySearch Quarterly Mobile PC Shipment and Forecast Report

In the tablet PC market, Apple continued its strong growth across all its regions, capturing 59.1% share in Q4’11. Newcomers Amazon and Barnes and Noble firmly planted their flags in the market, at #2 and #5, respectively—Amazon with 16.7% share and Barnes and Noble with 3.5%. Both brands focused on North America in their market entries. Samsung improved in all its key markets, particularly EMEA, helping it to reach .67% market share. ASUS continued its strong results in North America, EMEA, and Asia Pacific as it took 4.6% share in Q4’11.

Table 3: Preliminary Q4’11 Worldwide Top Five Tablet PC Shipment Rankings by Brand

Rank	Brand	Units (millions)	Share (%)
1	Apple*	18.7	59.1
2	Amazon	5.3	16.7
3	Samsung	2.1	6.7
4	ASUS	1.5	4.6
5	Barnes and Noble	1.1	3.5

Source: Q1’12 DisplaySearch Quarterly Mobile PC Shipment and Forecast Report
* Apple shipments include units for sell through and inventory.

Apple pulled ahead of HP in the fourth quarter to become the largest player in the client PC market, a new report suggested Monday. The Cupertino-based company shipped more than 15 million iPads and 5 million Mac computers last quarter, and those figures represented 17% of all PCs shipped around the world during the fourth quarter. The report, which comes from market research firm Canalys, said PC shipments grew 16% annually to reach 120 million during the quarter, and the firm’s categorization of “PC” includes desktops, notebooks, netbooks and tablets in its figures. Tablets drove PC growth, however, and Canalys said the market would have declined by 0.4% without taking tablets into consideration. Read on for more.

Overall, Acer, Dell and HP lost market share while Apple and Lenovo increased their respective shares. “Currently, HP is pursuing a Windows strategy for its pad portfolio, producing enterprise-focused products, such as the recently launched Slate 2, until the launch of Windows 8,” said Canalys analyst Tim Coulling. “However, questions remain over Microsoft’s entry into the consumer pad space. While early demonstrations of the Window 8 operating system seem promising, Microsoft must focus its efforts on creating an intuitive user experience that is far less resource intensive.”

Another Canalys analyst, Michael Kauh, said that he expects to see “limited adoption” of new thinner and lighter Intel-powered ultrabooks during the first half of this year but that adoption should increase in the second half as prices fall. ”In the short term though, vendors will experience more pressure in the netbook and notebook segments, especially with Apple’s annual iPad refresh approaching,” Kauh said. Canalys’s full press release follows below.

Apple storms past HP to lead global PC market

120 million PCs shipped globally in Q4 2011, up 16% year-on-year

Shanhai, Palo Alto, Singapore and Reading – Monday, 30 January 2012

Canalys today announced that Apple, after reporting stellar results, became the leading worldwide client PC vendor in Q4 2011. Apple shipped over 15 million iPads and five million Macs, representing 17% of the total 120 million client PCs shipped globally in Q4. Overall, the total client PC market, including desktops, netbooks, notebooks, and pads grew 16% year-on-year. Excluding pads, the client PC market declined 0.4%. The floods in Thailand, that impacted hard drive assembly plants, caused mild disruption to shipments during the quarter, but the side effects are likely to be felt in the first half of 2012.

Among the other top five PC vendors, only Lenovo managed to increase its market share, by a relatively modest two points, compared to Apple’s six-point gain over the same quarter a year ago. Acer, Dell and HP – the hardest hit – all lost market share.  Now the second largest client PC vendor worldwide, HP will struggle to compete with Applefollowing the end of its Touchpad.

“Currently, HP is pursuing a Windows strategy for its pad portfolio, producing enterprise-focused products, such as the recently launched Slate 2, until the launch of Windows 8,” said Canalys Analyst Tim Coulling. “However, questions remain over Microsoft’s entry into the consumer pad space. While early demonstrations of the Window 8 operating system seem promising, Microsoft must focus its efforts on creating an intuitive user experience that is far less resource intensive.”

Lenovo continued to close the gap on HP, thanks to successful investment outside of core markets. The acquisition of Medion in Germany helped Lenovo double its shipments in Western Europe during the second half of 2011. The vendor’s decision to use Android for enterprise and consumer pads gives it a better opportunity than HP to continue gaining market share.

Dell placed fourth among the top five PC vendors, followed by Acer. Acer’s shipments continued to decline, as a result of the pad’s impact on the netbook market. It did, however, make headlines at the 2012 International Consumer Electronics Show in January, when it revealed its S5 Ultrabook. Unsurprisingly, Acer and other vendors have been quick to announce their support for the new Ultrabook form factor, with the view of driving innovation and renewed customer interest in notebooks.

“We expect Ultrabook volumes to see limited adoption through the first half of 2012, before finally gaining momentum later in the year as price points decline and Intel launches a new line of processors and embarks on an aggressive marketing campaign,” said Canalys Research Analyst Michael Kauh. “In the short term though, vendors will experience more pressure in the netbook and notebook segments, especially with Apple’s annual iPad refresh approaching.”

Pads accounted for 22% of total PC shipments during Q4 2011. In addition to Apple’s strong performance, the Amazon Kindle Fire and the Nook Tablet by Barnes and Noble boosted volumes in the U.S. market, allowing both vendors to claim spots among the top five worldwide pad makers, in second and fifth place respectively.

All regions grew year-on-year with the inclusion of pads. Excluding pads, however, shipments in Europe, Middle East and Africa and North America declined, due to weaker consumer demand in Western Europe and the United States, despite the traditional Q4 sales periods. Vendors and channel partners took a cautious approach to inventory levels in Q4, as many had expected a slow quarter. Notebook volumes grew slightly, at approximately 1% in these regions, but continued their impressive rise in Asia Pacific and Latin America, as more consumers embraced mobile computing.

“The consumerization of IT continues to be a significant disruptive force in the PC industry, but many of the leading vendors have failed to capitalize on the trend to date,” said Coulling. “This year will be a pivotal year for those vendors that were slow to launch pads. It is not just the product that they need to get right, business models are equally important – driving revenues from content delivery can help vendors reach lower price points in a market that is incredibly price sensitive.”

Apple is now the largest buyer of semiconductors in the world, according to market research firm Gartner. The Cupertino-based company trailed both Samsung and HP in 2010, however Apple’s spending is estimated to have jumped 34.6% in 2011. The company spent $17.3 billion on semiconductors in 2011, or 5.7% of the total share of chip purchases. Coming in second was Samsung, which spent $16.7 billion or 5.5% of all chip purchases, and HP came in third with $16.6 billion. Leading electronics manufacturers spent a total of $105.6 billion on semiconductor purchases last year, representing a year-over-year increase of $1.8 billion. ”The major growth drivers in 2011 were smartphones, media tablets and solid-state drives (SSDs),” said Masatsune Yamaji, principal research analyst at Gartner. “Those companies that gained share in the smartphone market, such as Apple, Samsung Electronics and HTC, increased their semiconductor demand, while those who lost market share in this segment, such as Nokia and LG Electronics, decreased their semiconductor demand. Media tablets were also a growth driver for the semiconductor market throughout 2011.” Gartner’s press release follows below.

Gartner Says Apple Became the Top Semiconductor Customer in 2011
Top 10 Original Equipment Manufacturers Represented $105.6 Billion of Semiconductor Demand, Accounting for 35 Percent of Total Semiconductor Chip Revenue in 2011

STAMFORD, Conn., January 24, 2012—

Leading electronic equipment manufacturers remained the center of the semiconductor world in 2011, accounting for $105.6 billion of semiconductors on a design total available market (TAM) basis — 35 percent of semiconductor vendors’ worldwide chip revenue, according to Gartner, Inc. This represented a year-over-year increase of $1.8 billion, or 1.8 percent from 2010.

Design TAM represents the total silicon content in all products designed by a certain electronic equipment manufacturer or in a certain region, while purchasing TAM represents the total silicon content purchased directly by a certain electronic equipment manufacturer or in a certain region. Design TAM is a useful index for semiconductor vendors when they are considering how to allocate their sales or field application engineer resources by customer or region. Purchasing TAM is a useful index for semiconductor vendors when they are considering how to establish an efficient distribution network by customer or region.

“The major growth drivers in 2011 were smartphones, media tablets and solid-state drives (SSDs),” said Masatsune Yamaji, principal research analyst at Gartner. “Those companies that gained share in the smartphone market, such as Apple, Samsung Electronics and HTC, increased their semiconductor demand, while those who lost market share in this segment, such as Nokia and LG Electronics, decreased their semiconductor demand. Media tablets were also a growth driver for the semiconductor market throughout 2011.”

“Given the rapidly changing competitive structure of the IT and electronics industry, no semiconductor device vendor can afford just to monitor the requirements of the current market leaders,” Mr. Yamaji said. “Vendors need to be constantly looking for new market entrants who will, in turn, be tomorrow’s market leaders.”

Within the top 10 rankings, three companies were from the Americas, three from Asia/Pacific, three from Japan and one from Europe, the Middle East and Africa (EMEA). Apple led the market in 2011 (see Table 1), achieving significant growth, as it has done for the past five years. As a result, Apple became the biggest customer of semiconductor chip vendors in 2011, climbing two places in the ranking, from third in 2010.

Apple gained a much greater share of the smartphone market, and its media tablet business was also highly successful in 2011. While DRAM prices fell drastically in 2011, and many PC vendors decreased their total semiconductor demand accordingly, the success of the MacBook Air enabled Apple to increase semiconductor chip demand even in its PC business.

Mr. Yamaji said that as more brand-name companies are increasing their production outsourcing to original design manufacturers (ODMs) and electronics manufacturing services (EMS) providers, semiconductor procurement by ODMs and EMS providers has increased year over year. Currently, three of the top 10 purchasing TAM companies are so-called contract manufacturers.

“Semiconductor chip vendors must pay attention not just to the design TAM and purchasing TAM by company, but also by region,” said Mr. Yamaji. “This is the key to avoiding inappropriate sales resource allocation. They must keep an eye on design-win opportunities in the U.S., while also establishing a strong distribution network in China.”

Seven people have been charged with trading shares of Dell stock based on inside information. Four new arrests were made by the FBI on Wednesday, Reuters said, while three others have already been charged. In total, the group made more than $62 million in profits off of illegal trades in 2008. The defendants named on Wednesday include former portfolio manager Todd Newman of Diamondback Capital Management in Stamford, Anthony Chiasson of Level Global Investors in New York and Jon Horvath. A fourth person was also arrested in Los Angeles. The four men allegedly had early access to Dell’s earnings reports ahead of the company’s public announcements and have each been charged with one count each of securities fraud and one count each of conspiracy to commit securities fraud.

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Research in Motion’s BlackBerry OS has been the platform of choice for the Department of Defense for many years thanks to RIM’s robust security. However, with the rise of Google’s Android and Apple’s iOS operating systems, the DoD may be moving away from BlackBerry devices. In a recent Security Technical Implementation Guide, the DoD approved the use of Android-powered devices by its staff, but the Dell Venue is currently the only phone that qualifies. The DoD states that a device must be running Android 2.2 and have the Android Market stripped from its core in order to be used by staff. Moreover, all web browsing must be done through a DoD proxy server and classified information cannot be sent, received or accessed by Android handsets. Apple’s iPhones and iPads are also being tested by the Defense Information Systems Agency, however due to Apple’s tightly controlled ecosystem, the devices have not yet been approved. Installing DoD third-party security software was more difficult on iOS than Android’s open-source framework. Additionally, government officials said they were uncomfortable with Apple’s ability to track its users’ locations.

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Apple is on track to become the No.1 PC vendor in the world next year according to new projections. Market research firm Canalys on Monday announced that it expects Apple to pass current top vendor Hewlett-Packard before the end of the first half in 2012. This estimate includes iPad sales however, while most firms omit tablets from their PC figures. Solid iPad sales propelled Apple into the No.2 spot last quarter according to Canalys, and it will overtake HP some time before July next year if sales continue to grow as expected. Read on for more.

Canalys says tablet sales will total 59 million units in 2011, with fourth-quarter sales alone reaching 22 million. The firm sees Amazon’s Kindle Fire and Barnes & Noble’s Nook Tablet both faring well this holiday season, but Apple’s iPad will continue to dominate the market. The Cupertino, California-based company will nip at HP’s heels toward the end of the fourth quarter this year, but Canalys says the launch of the iPad 3 will push Apple to the top.

“Apple has seen its PC market share expand from 9% to 15% in just four quarters, though iPad shipments in its core market – the United States – are likely to come under pressure in Q4 due to the launch of the Fire and Nook at extremely competitive price points,” said Canalys Analyst Tim Coulling in a statement. “HP and Apple will fight for top position in Q4, but Apple may have to wait for the release of iPad 3 before it passes HP.” Canalys’ full press release follows below.

Apple on track to become leading global PC vendor

- Global PC shipments to reach 415 million for 2011

Palo Alto, Shanghai, Singapore and Reading (UK) – Monday, 21 November 2011

Canalys today announced that it expects Apple to overtake HP to become the leading global PC vendor before the second half of 2012. Pads, and particularly the iPad, have radically changed the dynamics of the PC industry over the last year, already propelling Apple into second place in the worldwide PC market in Q3 2011. Canalys estimates full-year 2011 global PC shipments to reach 415 million, up 15% year-on-year, thanks predominantly to increasing pad sales.

Total pad shipments are expected to reach 59 million units by the end of 2011, with Q4 volumes predicted to exceed 22 million. While the iPad will dominate in Q4, the recently announced Kindle Fire and Nook Tablet are also anticipated to impact the US market.

“Apple has seen its PC market share expand from 9% to 15% in just four quarters, though iPad shipments in its core market – the United States – are likely to come under pressure in Q4 due to the launch of the Fire and Nook at extremely competitive price points,” said Canalys Analyst Tim Coulling. “HP and Apple will fight for top position in Q4, but Apple may have to wait for the release of iPad 3 before it passes HP.”

Vendors overall though are struggling to compete profitably with Apple, as many toil to produce comparable devices at attractive prices. The release of Android 4.0 (ICS) should, however, bolster tier 1 manufacturers, as combining smart phone and pad operating systems will enable developers to adapt existing applications to run on pads. Conversely, the release’s timing may harm vendors looking to capitalize on strong holiday season sales. Much of the IT channel’s stock now runs on older versions of Android 3.1, and many vendors are not forthcoming with upgrade timescales, which will deter informed consumers.

Notebook sales also helped fuel market growth in 2011, with total shipments anticipated to hit 211 million, a 10% year-on-year increase. Canalys expects Ultrabooks, bringing much needed innovation to the category, to drive notebook sales over the next five years. With their differentiated appearance, Ultrabooks should spur some consumers to upgrade their existing notebooks.

“For Ultrabooks to become widespread, prices have to drop considerably,” said Canalys Research Analyst Michael Kauh. “The least expensive models are currently around $800, a real barrier to mass consumer uptake. As more vendors embrace the Ultrabook design, component costs should drop and mainstream consumer prices will be achieved.”

On a regional level, Canalys forecasts North America PC shipments to reach 103 million for the whole of 2011, with 32 million units expected in Q4. Overall volumes in 2011 are anticipated to grow 18% year-on-year because of the ongoing popularity of pads. Excluding pads, the market is predicted to grow at less than 1% for the year. The United States’ ongoing economic problems have resulted in to prices falling to their lowest levels since 2009.

Canalys anticipates the EMEA PC market – excluding pads – to contract in 2011 at an annual rate of 6%, although volumes will peak for the year at 30 million in Q4. Western Europe is largely responsible for the regional decline because of investor concerns over sovereign debt issues in the Euro Zone. As with the US market, ongoing economic issues will continue to have a negative impact on consumer confidence levels, affecting shipments in Q4 and beyond.

Canalys expects high growth in Latin America and Asia Pacific in Q4, with total volumes for 2011 predicted to reach 40 million and 153 million. Overall, the BRIC countries will account for 28% of worldwide PC shipments in 2011.[1]

The Canalys PC market forecast for 2012 highlights challenging conditions during the first half of 2012, as flooding in Thailand continues to severely impact the global hard disk market. Thailand is responsible for around 40–45% of the world’s hard disk production, and the business disruption has already led to price rises. Hard drive shortages will further reduce inventories and shipments of desktops, netbooks and notebooks in the coming quarters. Canalys believes that side-effects will include a boost in solid-state drive (SSD) production and lower prices that will benefit pad and Ultrabook vendors.

A number of recent entrants in the tablet space may make quick exits as their tablet offerings go largely unnoticed in a market seen to be dominated by the likes of Apple, Amazon and Barnes & Noble moving forward. A new report from DigiTimes on Thursday cites unnamed sources from within component suppliers in stating PC vendors such as HP, Acer, Asustek and Dell may abandon the tablet market next year. These companies have gained very little traction in the tablet space according to the report, as they lack competitive advantages. Read on for more.

Amazon, Barnes & Noble and possibly even Apple will continue to bring cheaper and more compelling tablets to market, making it increasingly difficult for companies like HP and Dell to compete. The former two companies are also seen as profiting mainly from their content platforms rather than hardware sales, so they are willing to sell devices at rock bottom prices that traditional PC vendors will be unable to match.

A number of venders are expected to turn to Microsoft’s Windows 8 platform once it becomes available in the second half of 2012, in an effort to offer a fresh take on media tablets. Of course, they might also try introducing unique and compelling features that draw attention and add utility unavailable on competitive offerings.

DigiTimes’ report notes that there are already indications that interest in the tablet market among consumers may be waning, and even Apple’s iPad 2 has seen sales stall in recent months. An earlier report noted that Google’s new Android 4.0 Ice Cream Sandwich platform is still not strong enough to compete in the tablet market, which could mean interest in Android tablets will continue to sputter in 2012 as it did this year.

Dell reported its third-quarter earnings on Tuesday, noting that its revenue of $15.4 billion was flat compared to the same period last year. GAAP earnings came in at $0.49 per share, up 17% from the same quarter in 2010. Revenue from Dell’s enterprise solutions and services branch was an all-time high $4.7 billion; sales of servers, storage, networking and services jumped 8% from the same period last year. Dell’s consumer unit reported $2.8 billion in revenue, down 6% from the third quarter of 2010, but the company said that its high-end XPS computers fared particularly well. In fact, revenue from its XPS consumer laptop family increased 207% from last year. Read on for more.

Dell warned that the flooding in Thailand, which has resulted in shortages of hard drives from Western Digital and Seagate, has forced the company to look to the “lower end of the range of its revenue outlook” of 1-5% growth for the year. ”To the that extent we see higher [hard drive] prices we’ll also see some offsets in other components and we’re going to do everything we can to protect our customers,” Dell CFO Brian Gladden said.”But maybe in some cases we do have to raise our prices.” Read on for the full press release from Dell.

Dell Reports Strong Profitability in Third Quarter

Fiscal Year 2012 Third Quarter Financial Statements in PDF format

• Earnings per share of $0.49 (GAAP) and $0.54 (non-GAAP) up 17 and 20 percent, respectively; Operating Income up 12 percent (GAAP); up 10 percent (non-GAAP)
• Enterprise solutions and services revenue at all-time high of $4.7 billion
• Cash flow from operations for the quarter was $851 million and $5.2 billion for the past four quarters

Dell’s continued strategic focus on higher-value opportunities, combined with an increased mix of enterprise solutions and services sales, resulted in increased profitability on revenue of $15.4 billion in its third quarter, flat compared with revenue a year ago.

“Our results this quarter and over the past year reflect a new Dell, one focused on providing our customers productivity-enhancing solutions either developed organically or acquired,” said Michael Dell, chairman and CEO. “We’re now investing in research and development activities at almost a billion-dollar annual run rate and our earnings per share is up 86 percent over the last 12 months.”

Revenue for Dell’s enterprise solutions and services business – including sales of servers, storage, networking, andservices – increased 8 percent over the same quarter last year to $4.7 billion, an all-time high. As the revenue mix steadily shifts more to the higher-value enterprise portfolio, Dell is delivering on its commitment to improve profitability, with operating income up 12 percent for the quarter and at 7.6 percent of revenue for the fiscal year to date.

“We delivered strong third-quarter results, maintaining our focus on operating income and improving our mix of higher-value enterprise solutions,” said Brian Gladden, Dell chief financial officer. “Consistent with our strategy and the investments we have made, we continued to see excellent momentum in our enterprise business, with double-digit revenue growth in services, servers and networking, and in key growth countries, despite some macroeconomic uncertainty.”

Results:

• Revenue in the quarter was $15.4 billion, flat compared with the same quarter last year.
• GAAP earnings per share was 49 cents, up 17 percent; non-GAAP EPS was 54 cents, up 20 percent.
• GAAPoperating income was $1.1 billion, or 7.4 percent of revenue. Non-GAAP operating income was $1.3 billion, or 8.4 percent of revenue.
• Cash flow from operations was $851 million for the quarter and $5.2 billion over the last four quarters. Dell ended the quarter with $16 billion in cash and investments and repurchased $600 million in stock in the quarter. For the year, Dell has spent $2.18 billion to purchase 142 million shares of Dell stock.

Fiscal-Year 2012 Third Quarter and Year-To-Date Highlights

                                                                          Third Quarter              Fiscal Year-to-Date

(in millions)	FY12	FY11	Change	FY12	FY11	Change
Revenue	$15,365	$15,394	0%	$46,040	$45,802	1%
Operating Income (GAAP)	$1,142	$1,024	12%	$3,500	$2,288	53%
Net Income (GAAP)	$893	$822	9%	$2,728	$1,708	60%
EPS (GAAP)	$0.49	$0.42	17%	$1.46	$0.87	68%
Operating Income (non-GAAP)	$1,288	$1,167	10%	$3,992	$2,863	39%
Net Income (non-GAAP)	$983	$875	12%	$3,039	$2,088	46%
EPS (non-GAAP	$0.54	$0.45	20%	$1.62	$1.06	53%

Information about Dell’s use of non-GAAP financial information is provided under “Non-GAAP Financial Measures” below. Non-GAAP financial information excludes costs related primarily to the amortization of purchased intangibles, severance and facility-action costs, certain settlement costs and acquisition-related charges. All comparisons in this press release are year over year unless otherwise noted.

Strategic Highlights:

• Enterprise solutions and services revenue was $4.7 billion in the quarter and represented 31 percent of Dell’s revenue.
• Server and networking revenue increased 13 percent year over year, driven by continued momentum in server virtualization. Dell is working with customers to provide mission-critical services and solutions around the server, creating competitive differentiation, richer configurations and stronger profitability.
• Dell-branded storage revenue grew 23 percent year over year, driven by demand for EqualLogic and Compellent technology.
• Dell Services revenue grew 10 percent to $2.1 billion and now represents 14 percent of Dell’s business. Dell’s total value of new services contracts signed for the past 12 months is $1.9 billion. Services backlog is now $15.5 billion, up 11 percent from a year ago.

Business Units and Regions:

• Large Enterprise had $4.5 billion of revenue, up 4 percent from a year ago on a 19 percent increase in revenue for servers and networking and a 14 percent increase in revenue for services. Enterprise solutions and services revenue was $1.9 billion. Operating income was $441 million, or 9.8 percent of revenue.
• Public had $4.4 billion of revenue, down 2 percent from a year ago, and including an increase in services revenue of 7 percent. Operating income was $463 million or 10.6 percent of revenue. Enterprise solutions and services revenue was $1.6 billion. Spending was slow in U.S. federal and Western Europe. Customers continue to invest in our solutions to reduce spending and increase productivity.
• Small and Medium Business had revenue of $3.7 billion, up 1 percent. Operating income was $386 million or 10.4 percent of revenue. Enterprise solutions and services revenue was $1.1 billion, an all-time high, and up 18 percent, driven by a gain in servers of 18 percent; services of 23 percent, and storage of 9 percent.
• Consumer revenue was $2.8 billion, a 6 percent decline. Operating income was $76 million or 2.7 percent of revenue. The migration to higher-value products has proven to be effective, with overall company revenue for the high-end XPS consumer laptop growing 207 percent. XPS revenue now accounts for nearly 20 percent of Dell’s total consumer laptop business.
• Internationally, revenue in growth countries – defined as those outside the U.S., Canada, Western Europe and Japan – grew 11 percent in the third quarter and is up 14 percent for the fiscal year. These geographies account for 29 percent of Dell’s revenue. Regionally, Asia Pacific and Japan had the greatest revenue growth at 10 percent, led by China’s 23 percent growth and Australia/New Zealand’s 13 percent increase. EMEA revenue increased 4 percent. Revenue in European growth countries increased 12 percent, led by the Czech Republic, Poland and Russia. Revenue in BRIC countries increased 14 percent.

Company Outlook:

Dell has delivered $5.3 billion in operating income on a trailing, 12-month basis, and a 44-percent increase year-over-year on a non-GAAP basis. The company remains committed to its strategy and is on track to exceed its guidance of 17 to 23 percent full fiscal-year operating income growth.

Given the uncertain macroeconomic environment and complexity in working through the industry-wide hard drive issue, the company is trending to the lower end of the range of its revenue outlook of 1 to 5-percent full fiscal-year growth.

Results through Q3 show that Dell is on track for another outstanding year. The company has made significant progress in building a more diversified and competitive set of enterprise and services-focused businesses that now represent almost 50 percent of its margin.

The devastating flooding in Thailand could hurt HP, Lenovo, Dell and Microsoft during the fourth quarter of this year, IDC said in a recent report. The research firm originally projected shipment growth of 5.1% for the PC industry during the quarter but it now expects PC shipments to fall between 2.2% and 3.4%. Moving into 2012, IDC said shipments could drop as much as 13.4%. “A lot of these plants are still under water, and it’s unclear how much damage they will find when the water recedes,” IDC analyst Loren Loverde explained in an interview with Bloomberg. “It’s also unclear how quickly the cleanup can begin and how much time it will take to bring in replacement parts to rebuild.” A recent report from Goldman Sachs also suggested that PC shipments could drop 8.5% during the first quarter of 2012. Hard drive manufacturers Western Digital and Seagate Technology both have plants that were flooded in Thailand. Seagate’s CEO Steve Luczo told Bloomberg that hard drive prices from his company could jump $10 to $25. “If you’re thinking of buying a laptop for Christmas, I’d buy it now,” Luczo suggested.

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Michael Dell, founder and CEO of Dell Inc., said on Tuesday that Android tablets have failed to gain significant traction in a market dominated by Apple’s iPad, and that Microsoft’s upcoming Windows 8 platform has a good chance of achieving better sales. Mirroring the sentiments of countless pundits, Dell says the tablet market today is basically an iPad market, and that Apple’s competitors have failed to offer a compelling alternative at this point. ”If you look at the tablet market, you have to say right now it’s an iPad market,” Dell said while speaking at the Web 2.0 Summit on Tuesday. “The Android stuff has not done fantastically well, I think I’m being fair. Microsoft has a pretty good shot with Windows 8, we’re pretty excited with what they’re doing.” Michael Dell said this past April that sales of Android tablets would overtake iPad sales just as sales of Android smartphones have surpassed the iPhone. The company’s Android-powered Streak tablet has not been a hot seller for the computer maker however, and now it appears as though any future plans for new Android tablets may be put on hold. Recent reports suggest Dell may release is first round of Windows 8 tablets in the third quarter of 2012.

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Dell and HP will reportedly be among the first manufacturers to launch Windows 8 tablets, and the devices could be on the market as soon as the third quarter of next year, DigiTimes said recently. Supposedly, Amazon’s low-priced Kindle Fire has driven several manufacturers to pursue Windows 8 over Android in an effort to avoid stiff competition in the low-cost tablet market. Lenovo and Dell will stick to creating enterprise-focused tablets according to the report. Dell’s devices will continue to run Windows but Lenovo will still offer Android as a choice on its business-oriented tablets. In addition, recent rumors have suggested HTC is also working on a Windows 8 tablet. Windows 8 shipped to developers in September and most reports have suggested the first devices bearing the OS will launch in late 2012.

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Global shipments of PCs grew slightly but less than analysts had predicted during the third quarter of 2011, Gartner said recently, citing preliminary findings of a new research report. 91.8 million PCs were shipped during the quarter, a 3.2% jumped from the same quarter of last year. The figures are lower than Gartner’s original estimate, which suggested PC vendors would ship 5.1% more units during the quarter. Gartner said the lower sales can be attributed to a weak Western European PC market. Read on for more.

HP maintains the largest PC market share with a 17.7 grip on the industry, a 5.3% increase from the same period last year, and the company shipped 16.2 million units during the quarter. Lenovo had the largest increase in market share and jumped 25.2% to a 13.5% share. Dell (11.6%), Acer (10.6%), and ASUS (6.2%) followed in the market share rankings.

“The inventory buildup, which slowed growth the last four quarters, mostly cleared out during the third quarter of this year; however, the PC industry has been performing below normal seasonality,” Gartner principal analyst Mikako Kitagawa said. “As expected, back-to-school PC sales were disappointing in mature markets, confirming that the consumer PC market continues to be weak. The popularity of non-PC devices, including media tablets, such as the iPad and smartphones, took consumers’ spending away from PCs.”

In the U.S., HP was the top PC vendor in the third quarter with 28.9% of the market followed by Dell with 21.9%, Apple with 12.9%, Toshiba with 8.4% and Acer with 7.8% of the market. Gartner’s full press release follows below.

Gartner Says Worldwide PC Shipments Grew 3.2 Percent in Third Quarter of 2011

For the First Time, Lenovo Moved Into the No. 2 Position and Asus Became the No. 5 Vendor

STAMFORD, Conn., October 12, 2011—

Worldwide PC shipments totaled 91.8 million units in the third quarter of 2011, a 3.2 percent increase from the third quarter of 2010, according to preliminary results by Gartner, Inc. These results are slightly lower than Gartner’s earlier projection of 5.1 percent growth for the quarter. The EMEA region contributed to lower-than-expected growth led by a weak Western European market.

“The inventory buildup, which slowed growth the last four quarters, mostly cleared out during the third quarter of this year; however, the PC industry has been performing below normal seasonality,” said Mikako Kitagawa, principal analyst at Gartner. “As expected, back-to-school PC sales were disappointing in mature markets, confirming that the consumer PC market continues to be weak. The popularity of non-PC devices, including media tablets, such as the iPad and smartphones, took consumers’ spending away from PCs.

“As the PC market faced a slowdown, vendor consolidation has become a more apparent trend in the industry. Lenovo’s recent merger with NEC, and its acquisition of Medion, as well as HP’s announcement that it may spin off or sell its PC business, underlined this trend during the quarter.”

HP, the No. 1 vendor based on global PC shipments, grew faster than the industry average, and its market share reached 17.7 percent in the third quarter of 2011 (see Table 1). Despite announcing in the middle of 2Q11 the potential spinoff of its PC business, HP experienced strong growth in the U.S., while outside the U.S., growth was relatively weak or average.

Lenovo became the second-largest PC vendor in the worldwide market for the first time. The company’s expansion was boosted in part by the joint vendor with NEC in Japan. However, its aggressive marketing to both the professional and consumer PC markets accelerated its shipment volume.

Table1
Preliminary Worldwide PC Vendor Unit Shipment Estimates for 3Q11 (Units)

Company	3Q11 Shipments	3Q11 Market Share (%)	3Q10 Shipments	3Q10 Market Share (%)	3Q10-3Q11 Growth (%)
HP	16,231,528	17.7	15,419,654	17.3	5.3
Lenovo	12,352,194	13.5	9,867,917	11.1	25.2
Dell	10,676,360	11.6	10,829,115	12.2	-1.4
Acer Group	9,686,853	10.6	12,612,822	14.2	-23.2
Asus	5,693,146	6.2	4,802,481	5.4	18.5
Others	37,146,785	40.5	35,420,559	39.8	4.9
Total	91,786,865	100.0	88,952,547	100.0	3.2

Note: Data includes desk-based PCs, mobile PCs, including mini-notebooks but not media tablets such as the iPad. Final estimates will be subject to change.
Lenovo shipments include NEC shipments, but not Medion’s shipments.
Source: Gartner (October 2011)

Dell’s performance was below the industry average in most regions, as the company faced intensified competition in the professional space, where Dell has been traditionally strong. Acer mostly cleared its inventory buildup in the EMEA region by the third quarter of 2011. However, channels have been adopting a conservative position in regard to placing orders following the inventory issues. Asus widened the gap with Toshiba, the sixth-largest vendor. Asus achieved strong growth in China.

In the U.S., PC shipments totaled 17.8 million units in the third quarter of 2011, a 1.1 percent increase from the third quarter of 2010. The U.S. PC market experienced year-over-year growth for the first time in three quarters. While the consumer market continued to be weak with disappointing back-to-school sales in the third quarter, the inventory was kept mostly in check as industry expectations were relatively low.

“The main contributor to the weak consumer PC market in the U.S. was intensified competition for consumers’ money,” Ms. Kitagawa said. “Media tablets and smartphones took center stage in the U.S. retail sector, and the expectation is for continuing demand for these devices throughout the holiday season.”

HP showed strong growth in the U.S. PC market, as shipments increased 15.1 percent in the third quarter, and its market share totaled 28.9 percent (see Table 2). Despite the potential spinoff of its PC business, HP executives’ efforts to give the appearance of “business as usual” seemed to work in the quarter.

Dell struggled as shipments declined 7.2 percent in the third quarter of 2011. “Dell’s issue has been balancing profitability and market share gain, a difficult task in a PC industry where high volumes and low margins are the norm,” Ms. Kitagawa said.

Gartner’s early study shows that Apple experienced the strongest growth among the top five vendors in the U.S. PC market. Apple’s PC shipments increased 21.5 percent in the third quarter of 2011. The robust growth of the MacBook Air continued to lead Apple’s overall growth in the U.S. market.

Table 2
Preliminary United States PC Vendor Unit Shipment Estimates for 3Q11 (Units)

Company	3Q11 Shipments	3Q11 Market Share (%)	3Q10 Shipments	3Q10 Market Share (%)	3Q11-3Q10 Growth (%)
HP	5,132,614	28.9	4,459,120	25.4	15.1
Dell	3,886,864	21.9	4,188,687	23.8	-7.2
Apple	2,300,000	12.9	1,893,600	10.8	21.5
Toshiba	1,486,100	8.4	1,545,630	8.8	-3.9
Acer Group	1,378,768	7.8	1,848,511	10.5	-25.4
Others	3,580,989	20.2	3,635,684	20.7	-1.5
Total	17,765,335	100.0	17,571,232	100.0	1.1

Note: Data includes desk-based PCs, mobile PCs, including mini-notebooks but not media tablets such as the iPad. Final estimates will be subject to change.
Source: Gartner (October 2011)

PC growth in EMEA reached 26.6 million units in the third quarter of 2011, a 2.9 percent decline from the second quarter of 2010. It was the third consecutive quarter that the EMEA region has experienced negative growth. However, analysts said vendors may have seen the end of backed-up inventory issues, which have been pulling down growth. The consumer PC market in Western Europe remained weak, with consumer confidence permanently shaken by the economic issues spreading across most of the region. Furthermore, the market share of mini-notebooks continued to decline, especially in Western Europe, which also contributed to the weak year-over-year comparison.

In Asia/Pacific, PC shipments reached 31.8 million units in the third quarter of 2011, a 6 percent increase from the same period last year. Vendors continued to stimulate demand aggressively with promotions and prices, benefiting buyers looking for good prices. It also provided an opportunity for some consumers to buy their first mobile PC.

The PC market in Latin America grew 19.6 percent in the third quarter of 2011. Mobile PC shipments grew 31.1 percent year over year, and desk-based PC shipments increased 6.5 percent in the third quarter of 2011.

PC shipments in Japan grew 3 percent, with shipments reaching 3.9 million units. The consumer market received a boost in demand with the introduction by vendors of new consumer models in September. There was also a rebound in production for the professional market, after a drop in enterprise demand because of the higher prioritization for business continuity plans that coincided with the earthquake and tsunami in March.

These results are preliminary. Final statistics will be available soon to clients of Gartner’s PC Quarterly Statistics Worldwide by Region program. This program offers a comprehensive and timely picture of the worldwide PC market, allowing product planning, distribution, marketing and sales organizations to keep abreast of key issues and their future implications around the globe. Additional research can be found on the Computing Hardware section on Gartner’s website at http://www.gartner.com/it/products/research/asset_129157_2395.jsp.