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PC DRAM share critically drops below 50%

Posted: 18 Sep 2012 ?? ?Print Version ?Bookmark and Share

Keywords:IHS? DRAM market? iPad? post-PC era? Kindle Fire?

According to IHS, personal computers in Q2 accounted for 49 percent of DRAM shipments, down from 50.2 percent in Q1. As another indicator of the post-PC era, the market research firm indicated that this is the first time the decline slid past the 50-percent mark.

The fall is notable, given that the share of PCs hasn't dipped below 50 percent since the 1980s, when PCs were a new product whose sales were rising at rapid clip. After accounting for the overwhelming share of DRAM buying for decades, average PC share from 1Q08 until 4Q11 hovered at about 55 percent, with share fluctuating periodically but generally trending down.

This event symbolizes the decline of the PC market because of smartphone and media tablets. However, beyond symbolism, the development also illustrates the diminishing dominion of PCs in the electronics supply chain.

"The arrival of the post-PC era doesn't mean that people will stop using personal computers, or even necessarily that the PC market will stop expanding," said Clifford Leimbach, memory analyst at IHS. "What the post-PC era does mean is that personal computers are not at the center of the technology universe anymoreand are seeing their hegemony over the electronics supply chain erode. PCs are no longer generating the kind of growth and overwhelming market size that can single-handedly drive demand, pricing and technology trends in some of the major technology businesses."

The fact that PCs have lost their majority share of the DRAM marketan area completely defined and dominated by personal computers for about 30 yearsrepresents a major milestone and the arrival of a new era in technology.

Figure 1: Worldwide DRAM Market Share Forecast by Application (Percentage Share Based on DRAM Unit Shipments)
Source: IHS iSuppli Research, September 2012

"For DRAM suppliers, the focus in the future increasingly will be on serving the needs of fast-expanding new markets for smartphones and tablets, at the expense of catering to the PC business," Leimbach added. "This follows other indications of the waning influence of the PC business in the electronics business. Such factors include the declining power of the Wintel alliance, as well as Apple Inc.'s smartphone- and tablet-driven ascendency to chip purchasing leadership above traditional PC-oriented frontrunners like Hewlett-Packard."

During the period from 2Q12 to 4Q13, the portion of DRAM shipments accounted for by PCs will contract another six percentage points, sliding to 42.8 percent, forecasted IHS. In comparison, the share held by media tablets will continue to rise. Tablet share of the DRAM space in terms of bit shipments grew to 2.7 percent in Q2, up from 1.6 percent in Q1, and will gradually expand by four percentage points until it hits 6.9 percent by 4Q13.

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