JPR Says Workstation Market Rebounded in 2005

Published: April 18, 2006

by Timothy Prickett Morgan

Market researcher Jon Peddie Research says that 2005 was a pretty good year for the high-end workstation market, and as in past years, this was mostly due to the continuing expansion of Windows and Linux workstations using Xeon and Opteron processors.

According to JPR's latest annual workstation report, the workstation market saw shipments grow by 22.6 percent to 2.08 million units worldwide in 2005, which was almost three times the growth rate from 2003 to 2004, when just under 1.7 million units were shipped and revenues actually declined by 5.9 percent to $4.5 billion in sales. In 2005, sales were up by 18.4 percent, to $5.33 billion.

JPR reckons that Dell has the dominant market share position in the workstation market, but its share is dropping in direct proportion to the advance of the Opteron in the workstation space--an Opteron chip that Dell refuses to support. JPR says that Dell had a 46 percent share of the workstation space in the first quarter, but its share had dropped to 39 percent in the final quarter of the year; HP had a 27 percent share for all of 2005, and is said to be closing the gap with Dell very quickly. The other top vendors are Lenovo, IBM, Fujitsu-Siemens, and Sun Microsystems--all of whom now have Opteron workstations. Oops.

Still, the Opteron chip only accounted for 2.6 percent of shipments in 2005, according to JPR, or about 54,080 units. But the Opteron workstation market is on fire. "If you extrapolate Opteron's nearly 350 percent growth rate, then AMD is in the teens in a couple of years and putting a big dent in Intel's share," explains Alex Herrera, JPR's senior analyst and the author of the Workstation Report. "But in 2006, with the new Woodcrest processor and Glidewell platform promising dramatically improved system bandwidth, Intel should dramatically close the performance gap with Opteron, especially in dual-socket applications."

The closely related professional graphics card market was also a hot one in 2005, at least for a few players. The market consumed 2.78 million units, up 16.8 percent, and sales grew by 6.8 percent to $908.6 million. In 2004, high-end graphics card shipments were up by 14.5 percent, but sales actually declined because of intense price competition, dropping by 8.3 percent to $850.8 million. Last year, nVidia captured 70 percent of graphics card shipments, but a stunning 79 percent of sales, while ATI grew its share of shipments to 23 percent; Matrox got 5 percent of shipments, and 3DLabs got only 2 percent. This low number is the main reasons 3DLabs got out of the workstation graphics business earlier this year, says JPR.

JPR says that most of the revenue and shipment growth for workstation sales in 2005 was due to the advance of dual-core X64 machines with very fast graphics, which not only attracted more customers but also boosted average selling prices. RISC/Unix workstations took it on the chin; of course, as they have since Windows NT was first put on a workstation 10 years ago. JPR says that the mobile workstation market is one of the hot spots, with 72 percent revenue growth.