Sorry, Intel: As Windows XP upgrade cycle wanes, so does company’s revenue forecast

Guess Intel executives should have placed a call to Redmond before banking too heavily on the PC market. On Thursday, Intel lowered its first-quarter revenue guidance by nearly $1 billion to $12.8 billion, as a result of weaker demand for business desktop PCs.

The company blamed macroeconomic and currency conditions in Europe, but the primary culprit was lower-than-expected Windows XP refresh rates in small and medium businesses. Officially, the new guidance is $12.8 billion, plus or minus $300 million.

For well over a year now, analysts have noted that the traditional PC market—notebooks and desktops—has been on the wane, with tablets and some two-in-one products picking up the slack. IDC, for example, said that PC sales fell 9.8 percent in 2013 and about 2.7 percent more in 2014.

The fragile PC market is easily shaken these days. Increases in low-cost PC sales have eaten into profit margins, while Chromebooks have stolen market share. Currency fluctuations and other financial events also affect PCs.

After Microsoft discontinued support for Windows XP last year, the one great hope has been that businesses would finally bite the bullet and buy new PCs for Windows 7 and Windows 8. Fortunately for PC vendors and Intel itself, that happened in the fourth quarter, when Intel reported record revenue numbers. But the company may have signalled problems ahead when it shelved plans for a new fab in January.

Microsoft: We saw this coming

So that phone call Intel should have made to Microsoft? The software giant reported its fourth-quarter earnings about ten days after Intel did. Microsoft said it had seen a 10 percent boost in sales of the “Professional” versions of its operating systems during that time, but those numbers had since reverted to normal levels.

Company executives stated pretty clearly that the Windows XP refresh cycle was done with. “As expected, the one-time benefit of Windows XP end of life PC refresh cycle has now tailed off,” Microsoft chief executive Satya Nadella said in prepared remarks.

An Intel spokeswoman, however, said via email that while the XP refresh cycle for corporate PCs largely played out last year, the company had expected a similar refresh cycle to take place in small and medium businesses. That didn’t happen.

Intel’s first-quarter sales are historically the lowest point for the company, given that consumers still buy most of their PCs during the holiday season, when analysts discount them. But the one-two punch of the post-holiday lull and lower refresh rates probably signals a woeful couple of quarters for AMD, Intel, and the PC market in general.

The story behind the story: There are signs of hope in the future, however, and it’s another refresh cycle: Windows 10. Microsoft and others hope that any customers who sat out Windows 8 will buy new PCs for Microsoft’s new operating system. With Windows 10 due to be released in the second half of the year, we could see a double bump—Windows 10 and holiday sales—to offset the double dip the PC market will take this quarter. Will it happen? Intel can only hope.

via Sorry, Intel: As Windows XP upgrade cycle wanes, so does company’s revenue forecast | PCWorld.

Windows upgrades, Chromebooks slow PC market bleeding in Q2

Upgrades from Windows XP PCs to newer computers during the second quarter perked up the PC market, which inched closer to positive quarterly shipment growth.

PC shipments worldwide totaled 74.4 million in the second quarter, declining 1.7 percent compared to the same quarter a year ago, research firm IDC said Wednesday. IDC in May predicted a decline of 7.1 percent for the second quarter.

The results were surprising considering the research firm had predicted declines or flat shipments until 2018, said Jay Chou, senior research analyst at IDC.

“With the fact that we’re seeing a good second quarter, that obviously means we’re going to revise our short-term outlook,” Chou said.

Good news, but not a turnaround

Businesses and consumers are showing more interest in buying PCs, but a few quarters of strong shipment numbers are needed to conclusively say the PC market is rebounding, Chou said.

A lot of growth was driven by businesses upgrading from old PCs running Windows XP, which is not supported by Microsoft. Companies are buying PCs with Windows 7 or Windows 8 with the OS downgrade option, Chou said.

Home users have less of a need to upgrade from XP, Chou said. They are buying less expensive laptops with Windows 8 and some are turning to Chromebooks, which are lightweight and offer good battery life. Google also aims Chromebooks in part at those who need XP PC replacements.

Shipments of Chromebooks, which have Google’s Linux-based Chrome OS, will grow as they become more widely available globally.

“We do think that there’s a good niche for Chromebooks,” Chou said.

Acer down, most others up

The top three PC makers—Lenovo, Hewlett-Packard and Dell—recorded double-digit growth in worldwide PC shipments during the second quarter. Acer was the only PC maker in the top five with a decline.

Lenovo increased its market share to 19.6 percent by shipping 14.56 million units during the quarter, growing 15.1 percent compared to the same quarter a year ago. Hewlett-Packard shipped 13.64 million PCs, growing 10.2 percent, with a market share of 18.3 percent. Dell’s worldwide PC shipments grew 13.2 percent to 10.4 million units, a market share of 14 percent.

Acer’s shipments declined 2.5 percent to 6.12 million units, which is an improvement over many previous quarters, IDC said. Acer has gone through multiple management changes in the last year, creating some instability, but the company is now rebounding.

Fifth-placed Asustek took advantage of Acer’s instability, with PC shipments growing 3.3 percent year-over-year to 4.61 million units. Asus is exploiting the void left by Sony’s exit from the PC market, Chou said.

via Windows upgrades, Chromebooks slow PC market bleeding in Q2 | PCWorld.

Tablet buyers aren't ditching their laptops, studies show

Many new tablets, including the new Kindle Fire HDX, are marketed as ways to create documents and other content for work-related tasks, instead of purely for home consumption of video and games.
Even with the focus on workplace productivity, a new survey shows that only 8.7 percent of tablet buyers want to use the tablet as a replacement for their laptops. The same survey by IDC found that 58.5 percent of respondents bought a tablet to use in addition to a laptop, and not as a replacement.
The online survey was conducted in April and included 299 U.S. consumers. All of them were 18 or older.
Generational differences
The results might have been different if the survey included younger tablet users, ages 17 and under, since that group has grown up with tablets since the first iPad went on sale in 2010, said Tom Mainelli, an IDC analyst and author of a report on the survey.
“The younger generation has different sentiments about phones and tablets and how useful they are,” Mainelli said in an interview.
Still, he said the finding that only 8.7 percent found a tablet as a replacement for a laptop was a surprise. “When we ask that question again in a year, I’d expect you will see a growing percentage view a tablet at least as possibly replacing a laptop,” Mainelli said.
“A huge percentage of people still see a lot of value in a laptop for one kind of app or service they use on it,” he added. \”Would they want to do their taxes on a tablet? They haven\’t quite made the leap to being comfortable with a mobile device like a tablet.”
“But that [expanded tablet] usage is coming, and we see more people doing more things on tablets,” Mainelli added. \”Professionals still rely on laptops and a lot of them are just not really even thinking about the possibilities that the tablet offers and instead are concerned that a tablet doesn\’t run Flash or can only open one app at a time.”
Mainelli said it\’s notable that Amazon announced two new Kindle Fire HDX tablets last week with an emphasis on business-class features such as a native VPN client and hardware and software encryption.
“Amazon is getting much more serious about making its tablets enterprise-ready,” he said. The same can be said for iPads and many Android devices.
Mobile OS trends
IDC has predicted 190 million tablets will be shipped to retailers in 2013, of which about half run on the Android mobile operating system and half on iOS, with fractional amounts running Windows. Amazon runs on a custom version of Android and has dubbed its latest OS the Fire OS 3.0 Mojito.
In the IDC survey, 35 percent said they own an iOS tablet; 26.4 percent said they owned a tablet running standard Android; 10 percent said they owned a custom Android tablet like a Kindle Fire; 9.4 percent said they owned a Windows tablet and 0.7 percent owned a Windows RT tablet. More than 14 percent said they didn\’t know the OS on their tablet.

The survey also asked tablet owners if they had a chance to buy a tablet again, would they buy one with the same OS. The iOS system owners were most likely to say yes (80.2 percent), followed closely by Windows tablet owners (78.9 percent); owners of standard Android systems were third (70 percent), and owners of custom Android devices were 68 percent.
Mainelli said the lower values for owners who would buy both kinds of Android again are likely a reflection of the many varieties of Android tablets on the market, some priced as low as $79 for a white box version and others from various vendors priced close to the iPad with Retina display at $499. Google’s Nexus 10 16 GB tablet running pure Android sells for $399.
“People who own the higher-end Androids probably have a similar affinity for them as do iOS owners,” he said. But Mainelli said he was somewhat surprised by the high affinity for Windows. “Those owning Windows have a strong inclination to buy one again, right below Apple,” he noted.
via Tablet buyers aren’t ditching their laptops, studies show | PCWorld.

It just works: Dell XPS 13 Developer Edition Linux Ultrabook review

It just works: Dell XPS 13 Developer Edition Linux Ultrabook review

Dell’s substantial investment in making a functional Linux Ultrabook pays off.

by Lee Hutchinson – Apr 20, 2013 12:33 pm UTC

Laptops

Open Source

192

I’ve been terribly curious about the Dell XPS 13 Developer Edition since we first covered it back in November. This is a different beast from the flippy-touchscreen-equipped XPS 12—this Ultrabook contains zero touchscreens. However, it comes preloaded with Ubuntu Linux, and Dell has spent a substantial amount of time and effort in ensuring that it works—and works well.

Specs at a glance: XPS 13 Developer Edition

Screen 1920×1080 13.3-inch IPS, 165 PPI

OS Linux – Ubuntu 12.04 LTS

CPU 2.0GHz Intel Core i7-3537U (Turbo Boost 3.1GHz)

RAM 8GB 1600MHz DDR3L (non-upgradeable)

GPU Intel HD Graphics 4000 (integrated)

Storage 256GB SATA III SSD

Networking Intel Centrino 802.11n, Bluetooth 3.0

Ports 1x DisplayPort, 2x USB 3.0 (one PowerShare), stereo headphone/line out

Battery 6-cell 47Whr Li-Polymer (non-replaceable)

Size 0.24 (at front)/0.71 (at rear) x 12.4 x 8.1 inches, 6 mm (at front)/18 mm (at rear) x 316 mm x 205 mm

Weight 2.99 lb/1.36 kg

Starting price $1549

Price as configured $1549 (no options available except addtional warranty)

In an effort originally known as Project Sputnik, Dell dedicated resources into doing Linux on an Ultrabook “right”—writing code where necessary (and contributing that code back upstream like a good FOSS citizen) and paying attention to the entire user experience rather than merely working on components in a vacuum. The result is a perfectly functional Ultrabook with a few extra tools—that “Developer Edition” moniker isn’t just for show, and Dell has added some devops spices into the mix with this laptop that should quicken any developer’s heartbeat.

Damning Linux with praise

Linux is not yet “ready for the desktop,” and I’m doubtful it will ever be—at least not in the sense that an average person could use it full-time without any assistance. I’ve struggled before with using Linux as my full-time operating environment both at work and at home. I did it for years at work, but it was never quite as easy as I wanted it to be—on an older Dell laptop, keeping dual monitor support working correctly across updates required endless fiddling with xorg.conf, and whether or not it was Nvidia’s fault was totally irrelevant to swearing, cursing Past Lee, trying desperately to get his monitors to display images so he could make his 10am conference call without having to resort to running the meeting on the small laptop screen.

Full Story: It just works: Dell XPS 13 Developer Edition Linux Ultrabook review | Ars Technica.

Review: Chromebook Pixel is too expensive (and too good) for Chrome OS

Just one month ago, the Chromebook Pixel was little more than a poorly sourced rumor. (And personally, while I didn’t quite dismiss it out of hand I came pretty close.) Google was releasing a high-end Chromebook with a touchscreen? And that touchscreen would boast a better pixel density than either of the Retina MacBook Pros? The rumor definitely didn’t fit in with the latest (and by all accounts, most successful) wave of Chromebooks, which have turned heads not least because they’re cheaper than any Chromebooks have been so far.
And yet, here we are: the Chromebook Pixel is real, it’s on my desk, and it starts at $1,299. For the kind of hardware we’re talking about—state-of-the-art Intel processors, a high-density touchscreen, and build quality to rival the best from both the Windows and Apple ecosystems—that price tag isn’t unreasonable. However, the Pixel is still running Chrome OS. Whether your Chromebook costs $199 or $1,299, that operating system still has all of the same features: it relies on constant Internet connectivity, it seeks to replace traditional desktop apps with Web apps, and it’s mostly just a Web browser running on top of a lightweight Linux distribution.
The question is, does this combination make sense? Are the professionals and power users who are willing to spend that kind of money on a computer the same kind of people who can live within Chrome OS’ limitations?
Full Story: Review: Chromebook Pixel is too expensive (and too good) for Chrome OS | Ars Technica.

128GB Surface Pro sells out: High demand, short supply, or both?

Almost as soon as it went on sale on Saturday morning, the $999 128GB versions of Microsoft’s Surface Pro tablet sold out. Whether buying online from Microsoft or from the Microsoft, Best Buy, Staples, or Future Stops bricks-and-mortar stores, the devices are unavailable, with no estimated availability. You can’t even put your name down for a pre-order.
Sign of a successful launch? That’s harder to say. Mary Jo Foley at ZDNet reports that some stores received just a single device to sell. With stock that thin on the ground, even idle curiosity would likely cause the Surface Pro to sell out. Other stores certainly had more stock: one Ars reader reports the Westfield San Francisco Centre Microsoft Store had dozens of 128GB units, with one person buying 23 of the machines in a single transaction. So Microsoft has certainly sold a bunch of the 128GB Surface Pros—but whether that represents thousands, tens of thousands, or even more, we don’t know.
We do know that 64GB Surface Pros, however, still seem to be relatively abundant, with stores still having stock and Microsoft’s online store still taking orders.
We also don’t know is whether this means that supplies of the 128GB unit are healthier, or that demand for the cheaper unit is lower. One would suspect early demand is tilted in favor of the more expensive device. 64GB just isn’t that much space on a new machine bought in 2013, especially for technically minded early adopters. Add to this the concern about the amount of disk space actually available on the 64GB Surface Pro and it’s plausible it’s simply not that popular.
We also don’t know why the 128GB units are so hard to come by. It’s possible Microsoft has been taken by surprise and is facing higher than expected demand; it’s also possible that its supply chain, which is still pretty new, simply couldn’t produce enough units to cope with even modest demand.
One thing, however, is clear: would-be buyers aren’t happy about it. The comments on Microsoft’s official Surface blog about the lack of availability are increasingly hostile. Commenters note the same low stock levels, with some claiming their local stores received not a single device. In the commenters’ views, Microsoft’s handling of the launch is nothing short of incompetent.
Even if the company has been caught off-guard by demand substantially higher than anticipated, there should at least be the ability to register interest and get in line. People could then know when new hardware does roll off the production line and buy systems on a first come, first served basis.
With Microsoft not taking pre-orders or giving any indication of when the systems will be back in stock, prospective buyers are already looking elsewhere. While nothing else on the market offers quite the same design approach or features of the Surface Pro, if you’re willing to accept slightly different form factors, there are viable alternatives from Samsung (the Ativ Smart PC Pro), Lenovo (the Yoga), or even Apple (MacBook Air). Microsoft can’t afford to leave potential customers hanging for too long or there’s a good chance they’ll go for one of these competing systems.
While the Surface Pro launch is proving frustrating to those interested in the product, there are, for Microsoft, worse outcomes. A glut of Surface Pros sitting unloved and unwanted on store shelves and warehouses would have been even worse than a shortage. Retailers may be frustrated at the lack of stock, but not as frustrated as they’d be with stock they’d have to give away at a knock-down price (as happened not so long ago with the HP TouchPad).
Microsoft could, and should, be doing more to keep potential buyers engaged, and the criticism on this point is well-deserved. But if the company opted to play it safe and go for a more conservative launch rather than flooding the market, that’s an understandable—and arguably even sensible—decision.
via 128GB Surface Pro sells out: High demand, short supply, or both? | Ars Technica.