Tag: ODMs

Flash is no flash in the pan

EMC logoThe use of flash memory in external storage systems grew by 113 percent year on year in the European Middle East and Africa (EMEA) territories, according to figures released by IDC.

IDC said that although economic instability held back sales a little, but the rise, which accounted for revenues of $1.63 billion, indicates that enterprises are steadily moving to public cloud adoption by European enterprises.

While EMC remained at number one in the second quarter, followed by HP, Netapp, IBM and Dell, the original development manufacturers (ODMs) which sell directly, had a 23.9 percent share of the market, outselling all these vendors but EMC, which had a 26.4 percent share.

IDC believes that in Western Europe, adoption of flash, and in particular all flash arrays rather than hybrid devices, will continue to grow with enterprises and organisations going towards software defined and flash based datacentres.

Data centres drive storage growth

EMC logoThe enterprise storage systems market was worth $8.8 billion during the second quarter of this year – growing 2.1 percent compared to the same quarter last year.

IDC said that revenues were spurred by original design manufacturers (ODMs) which sell their wares direct to hyperscale data centres. That segment of the market grew by 25.8 percent in the quarter, year on year, and accounted for $1 billion worth of revenues.

The trend is for enterprises to buy storage tech cutting cost and complexity – that means a move towards cloud storage, software defined storage, flash optimised systems and integrated systems.

Despite the move towards buying from ODMs, EMC remained on top of the vendor pile, although its revenue growth fell by four percent year on year. It holds 19.2 percent of the market.

HP grew by 8.7 percent in the quarter, with 16.2 percent market share. Third was Dell with 101 percent market share, and IBM held fourth position with 8.1 percent share.

Dell claims server shipments booming

Dell logoA senior executive at Dell claimed that his company has now taken second place globally in shipments of servers and in revenues.

Speaking to Digitimes, Ashley Gorakhpurwalla, general manager of servers at Dell, said his company has narrowed the gap between it and arch rival Hewlett Packard.

Gorakhpurwalla claimed that Dell is now the number one server vendor in North America and in China.

Nor does Dell appear to view the original development manufacturers (ODMs) such as Quanta to be a threat to its own business.

Dell believes its server growth in the high performance computer (HPC) sector is boosting its revenues worldwide.

Open source vendors don’t bother Dell either, said Gorakhpurwalla.

PC makers despondent about Windows 10

windows-10-start-menu-customised-live-tilesIn a day when Microsoft is to announce more job cuts in its hardware and smartphone division, it seems that the upcoming Windows 10 won’t offer light at the end of the tunnel for the software behemoth.

The companies that make PCs, largely in Asia, don’t seem to think that the introduction of Windows 10 at the end of this month is going to boost their sales figures.

According to a report in Taiwanese wire Digitimes, the original development manufacturers (ODMs) don’t think Windows 10 will cut the mustard and won’t go down a storm with either individual buyers or commercial enterprises.

The wire said that “many” ODMs aren’t happy about the level of orders they’ve received for the second half of this year and think that many people just won’t bother to upgrade. Enterprises generally don’t immediately upgrade to new versions of Windows until they’re sure that the release will be stable.

Many decided to stick with Windows 7 and skip Windows 8.x.

Digitimes said that the channel is currently stuck with large amounts of inventory and the ODMs are not going to contribute to that by speculatively manufacturing notebooks in the hope that Windows 10 will take off.

Multinationals pile pressure on PC makers

IBM PCBoth AMD and Intel’s results this week make it clear that the PC market will never be quite the same again.

And while shareholders in both Intel and AMD will be concerned about the future of the PC business, the effect of people not buying PCs and opting instead for smartphones and tablets is having reverberations down the whole supply chain.

That’s underlined by a report in Digitimes that said Taiwanese original design manufacturers (ODMs) will soon be approached by the big boys with request for quotes on machines using Intel’s Skylake microprocessors.

As industry analysts also noted this week, there have been inventory build ups in the supply chain and that’s going to prompt the multinationals to be cautious about over ordering machines from the ODMs.

Digitimes said that Lenovo, Dell, HP, Acer and Asustek will send their requests for quotes any day now – and if they’re over cautious, the ODMs, already operating on very narrow margins, may make losses, particularly as the quotes they’ll deliver to the multinationals will be cut throat.

It’s not just the manufacturers who are being squeezed, of course.  The decline in demand for PCs will have its effect on graphics card manufacturers, distributors, and dealers too.

Notebook sales fall by 19 percent

HP logoIntel’s recent financial results earlier this week demonstrated that PCs have gradually become its Achilles’ heel, and that’s demonstrated by research today that showed global notebook shipments slumped in the first quarter of this year.

Digitimes Research said shipments for notebooks fell by 19.4 percent sequentially, and down 4.7 percent compared to the same quarter last year.

The analysts at DR attributed the fall to seasonality and unsold stock hanging about from the last quarter of 2014.

Hewlett Packard did particularly badly, with sales down three million compared to the last calendar quarter of 2014. Lenovo suffered a three million drop, with others suffering drops too.

But Apple grew its shipment growth from the same quarter last year, while Lenovo also showed strong growth.

Asustek shipments fell by 20.8 percent, with DR attributing this large shortfall to exchange rate problems and to inventory problems.

Original development manufacturers (ODMs) showed a 21.4 percent drop in the first quarter, and also a drop of 12.9 percent compared to the first quarter of last year.

Taiwanese ODMs lose grip on notebooks

The Taiwanese industry is loosening its traditionally strong grip on global notebook shipments, according to a report, as competitors from the USA and particularly China muscle in on its territory.

HP and Lenovo are tipped to ship as many as 28 million notebooks next year. But unusually for the latter, Lenovo will seek to outsource just 40 percent of its notebook orders compared to 75 percent in 2013, with in-house production accounting for 16.8 million units – or 60 percent – instead.

In 2013, the in-house figure is 25 percent of Lenovo’s total production at 6.7 million units.

This is a significant switch of tactics as Lenovo overtook HP to become the top notebook brand vendor for the first half of 2013.

Lenovo won’t be internally manufacturing all notebooks, because it’s necessary for the company to keep alternative production lines open. However, Taiwan’s ODMs are going to notice.

The report, put together by Digitimes Research, estimates Taiwanese share of global notebook shipments will fall to 82.9 percent in Q3, and further to 81.5 percent in Q4 of this year.

As Lenovo seeks to continue stealing the march on competition, it will look locally to Chinese companies – allowing the firm to cut costs and put even more pressure on rivals, including those in Taiwan. 

HP, meanwhile, is expected to pick up orders from enterprise and government sectors over the second half of 2013, which should boost its market share. The report maintains Lenovo still has a shot at keeping the largest vendor crown for the year if current trends continue.

Back in 1999, Taiwanese companies shipped just 31 percent of netbooks worldwide, but heavy investment into China and R&D saw market share swell above 90 percent in 2010. If only IBM hadn’t sold its notebook businss, eh?

Google runs into Chromebook glitch

Wannabe hardware company Google looks like it is running into stiff competition on the tablet front.

According to a report in Digitimes, Asus and HTC don’t want to put second generation Chromebooks into place because sales haven’t been so hot, so far.  And PC giant Acer is also just thinking about whether to bite or not.

Chromebook IIs will be priced at between $450 and $550 and that means they’re not really that competitive with Apple’s iPad, nor even with netbooks, kitted with Atoms and Windows.

Google is no doubt also facing competition from a different sphere – Microsoft.  With its plans well advanced to introduce the Windows 8 operating system, no doubt it is wooing the ODMs as we speak.

Google has made attempts to woo the ODMs too – but it doesn’t have the clout that Microsoft, a long term partner with the Taiwanese ODMs, does.

Given that, we can expect to see a bunch of Ultrabooks at Computex in the next week, so it looks like the game is on, as far as competition goes.

Microsoft plays agent provocateur with its own partners

Notebook Original Design Manufacturers (ODMs) and brand vendors are squabbling as the Windows 8 launch looms, largely due to Microsoft’s new verification system.

OEM Activation 3.0 (OA 3.0) means there will be complications in production lines and eventually cost Microsoft partners a lot of money. The ODMs and vendors both argue the other should pay the price.

The problem is Microsoft’s fault. In changing the activation process for the consumer, it’s making the manufacturing process more difficult for the ODMs. With Windows 8, Microsoft will have the OS pre-installed into the BIOS, giving up on the days of old and the Certificate of Authenticity labels. 

That’s all well and good, but manufacturers are complaining that it’s a lot easier to build PCs with the operating system in the hard drive. The proposed change means each system will need more attention to make sure everything is installed properly. With that comes extra training for the staff in an economy where manufacturing workers are already demanding higher wages.

Digitimes’ sources claim that without the authenticity label, an installation overlap is likely – which could spill over to problems with ODM yield rates. 

Funnily enough, the sources believe Microsoft is playing its hardware partners against each other. They claim it whispered reassuringly into the ear of the ODMs, telling them that the brand vendors would cough up the extra costs.

Then it went to the brand vendors and told them the ODMs will take the hit. 

Now, neither knows what the score is, while Microsoft’s position is clear: it must get Windows 8 out at any cost. As long as it’s not its own. 

Taiwanese panic over HP's stupid PC move

Corporations eager to spend money refreshing their enterprise PC range have been thrown into a tizz by the CEO of HP foolishly saying he’d spin off the company’s PC unit. Maybe.

But it’s not just the corporate world that has been shocked by Leo Apotheker’s pre-emptive decision.

Over in Taiwan, the move has got all sorts of contract manufacturers in a spin, too.

According to the Taiwan Economic News, the Ministry of Economic Affairs is creating vast spreadsheets calculating what effect an HP spin off of PCs would have on its own original design manufacturers (ODMs).

They are panicking whether a Korean company, such as the mighty chaebol Samsung, might snap up the HP PC business.

The Ministry is also concerned about whether or not HP’s commitment to build an R&D centre in Old Taipei might come to nothing, too.

According to the Taiwan Economic News, here, HP selling off its PC division would have a worse effect than IBM selling its PC division to Chinese manufacturer Lenovo.

The difference between HP and IBM, however, is that Big Blue sold it off without a mighty pre-announcement that has introduced fear, uncertainty and doubt into both the supply chain and to HP’s corporate customers.

SAPman strikes again.