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AMD revises down Q3 revenues, iPad effect?

by Scott Bicheno on 24 September 2010, 10:19

Tags: AMD (NYSE:AMD)

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Tablet tax?

Chip-maker AMD has announced that it expects Q3 revenue to be down on the previous quarter's total of $1.65 billion by between one and four percent.

Q2 is generally the weakest quarter of the year - lacking boosts such as the January sales, back-to-school and Christmas - so Q3 revenues are usually expected to be higher than Q2's.

The reason given by AMD is: "weaker than expected demand, particularly in the consumer notebook market in Western Europe and North America."

This doesn't come as a great surprise. Market researchers have been predicting a weaker PC market in the second half of this year for some time, and Intel lowered its revenue forecast a month ago for the same reasons. But you have to wonder if this consumer PC weakness is entirely down to macroeconomic reasons.

Last week there were widespread reports about how the Apple iPad may be eating into the notebook market. It's hard to gauge how many iPad customers buy one instead of a notebook but, for the sake of argument, let's assume it's 100 percent.

A report in July estimated 13 million iPads would ship this year, while recently an analyst has revised his estimate for next year to 21 million units, predicting it would overtake the Mac in the process. The iPad has only been available for three quarters of this year, so if we assume the 13 million figure is accurate, that extrapolates to over 17 million if it had been selling for a full year.

The most recent IDC estimate for worldwide portable PC shipments - which includes netbooks but excludes tablets - is for over 208 million. That means iPad sales will have amounted to a twelfth of the notebook total.

While this is still a relatively small fraction, it's still quite a lot of disruption from a product category that effectively didn't exist before the launch of the iPad, and could certainly cause a decrease of a few percent in mobile PC sales.

So we think it's fair to assume that the iPad has been a significant contributing factor in a drop-off in consumer portable PC sales, and the pressure is definitely on AMD and Intel to empower a new generation of cheap, powerful notebooks with their latest hybrid CPU/GPU chips.

 



HEXUS Forums :: 4 Comments

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While this is still a relatively small fraction, it's still quite a lot of disruption from a product category that effectively didn't exist before the launch of the iPad …

Me and my HP TC1100 would like to take issue with that statement ;)

The 10" tablet existed long before Apple highjacked it, and the earlier versions were considerably more useful than the iPad. Apple have simply brought an existing form factor into the mainstream - something they're particularly good at. But saying the product cateogory didn't exist before the iPad is like saying that smartphones didn't exist before the iPhone. It's patently not true.
I just don't buy the argument that all iPad sales take sales away from Laptops. Most of the people I know with iPad's already have laptops and bought the iPad as an additional device. The primary usage model for it seems to be for access to web based apps from the sofa and it does this very well. I don't know anyone that was thinking about getting a new laptop and decided to buy an iPad instead. There may be a few people like this but nowhere near 100% of iPad buyers. I'd estimate it's more like 30-40% at the most.
scaryjim
Me and my HP TC1100 would like to take issue with that statement ;)

The 10" tablet existed long before Apple highjacked it, and the earlier versions were considerably more useful than the iPad. Apple have simply brought an existing form factor into the mainstream - something they're particularly good at. But saying the product cateogory didn't exist before the iPad is like saying that smartphones didn't exist before the iPhone. It's patently not true.

That's why I said “effectively”. AFAIK the tablet/slate form factor's sales were negligible before the iPad.

I've no doubt your HP TC1100 is a lovely device. :hexlub:
Scott B;1983738
AFAIK the tablet/slate form factor's sales were negligible before the iPad.

I take your point, but I'd still argue that's a very different thing from “effectively didn't exist”. And I guess a lot depends on how you view the overlap between convertible tablet PCs (which had a fairly healthy distribution, albeit in the professional / enterprise, rather than home, market) and the more modern “slate” devices (i.e. no physical keyboard).

I'll also accept that the battery life on my TC1100 can't even stand in the same room as the iPad's… ;)