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IDC Trims Chip Forecasts

Daily Finance

Research firm IDC recently released new projections for chip growth in both 2012 and 2013 that came in lower than previous expectations. As recently as July, the firm expected industry growth to come in at 4.6% with total revenue of $315 million, but the recent report dropped the growth number to 1% with revenue at $304 million. IDC cites global economic weakness and weak PC demand, among other factors, as some of the reasons for the slowdown. While reduced from its original projection of 6.2%, IDC now estimates 2013 growth at 4.9%. As you prepare for 2013 and consider your allocation to semiconductors, the role of reduced growth expectations should be central.

As the industry stands, even with the lowered expectations, both Qualcomm andIntel remain top picks heading into 2013. On the other hand, NVIDIA and ARM Holdings , while solid, may need to be tempered under the new targets. When we consider the numbers, however, there is the potential for each of these options to perform.

A growing consensus
The IDC report comes on the tail of a recent release from Gartner that also lowered that firm’s expectations for 2012 and 2013. Gartner is actually predicting a 3% decrease in semiconductor revenue for 2012, down to $298 million, but is much closer to IDC for 2013 with a projection of 4.5% growth. Both firms cite softness in the memory market — specifically in DRAM — as a major source of weakness for the year. The IDC report also looked to weakness in China, the ongoing eurozone debt crisis, weak PC demand, and other factors as catalysts for its lowered expectations.

 

Principal analyst Peter Middleton of Gartner stated: “The looming fiscal cliff, ongoing European debt crisis, slower emerging market growth and regional tensions have all played a part in reduced growth projections for semiconductor revenue in both 2012 and 2013. Inventory levels were already high at the start of the second half of 2012, and as PC demand rolled off, supply simply overshot demand.” The takeaway from each of these reports is that the general weakness in the economy is likely to create a drag on growth, even in an industry that is experiencing dramatic advances.

By the numbers
While it is easy to see the reduced expectations for the industry as a negative — OK, it is a negative — it is still important to keep the numbers in perspective. Even at the lower projections, IDC expects the industry to add $15 billion in revenues for 2013. Against the revenues of each of the companies mentioned above, this is still a significant increase:

Company Revenue (TTM) Revenue Increase for 10% Growth
Qualcomm $19.1 billion $1.91 billion
Intel $53.8 billion $5.38 billion
ARM Holdings $885 million $88.5 million
NVIDIA $4.13 billion $413 million

Source: Yahoo! Finance. TTM = trailing 12 months.

While the numbers required for 10% growth for each of these companies are not insignificant, and there is no reason to believe that the growth would be evenly distributed, the takeaway is that each of these companies could grow at 10% and still fall comfortably within the IDC numbers.

To further put this into perspective, each of the above companies have year-over-year revenue growth above 10% except for Intel, which shrunk revenue by 5.5%. Qualcomm grew revenue by 18.3%, ARM grew revenue by 20.3%, and NVIDIA grew revenue by 12.9%. This means that 10% revenue growth would be a slowdown for the three that grew, but with the strength of these companies, it is not inconceivable that they could continue to post solid growth figures while stealing sales from competitors.

Chip leaders
Qualcomm is the “New Chip King,” and is not likely to slow down as it charges into 2013. Central to this position is the company’s solid lead in 4G LTE. A recent report by Strategy Analytics locates Qualcomm’s market share in application processors at 48.1%. The industry as a whole grew at 69% on year-over-year basis, making the figure even more impressive. Overall, Qualcomm is strongly positioned, and is a buy despite the reduced IDC expectations.

Intel, which is generally considered a deep value within the industry, benefits from its diversified exposure to multiple market segments: the PC, mobile, and server markets.DIGITIMES recently reported that Intel plans to roll out a completely redesigned smartphone platform at the Mobile World Congress at the end of February. Furthermore, the company is expected to maintain its strong position within the $10 billion server market and the $31 billion PC market (for reference, PC market revenue remains five times larger than that for mobile processors).

While ARM continues to benefit from what Mr. Middleton at Gartner refers to as theApple effect,” it is simply not as strongly positioned as Qualcomm. Even with that in mind, the company’s relatively small size means it can hit significant growth figures without dramatically swinging aggregate market numbers. NVIDIA continues to be a solid player of the tablet side of the market, but also lags Qualcomm in overall appeal.

Overall, while the report from IDC should not be overlooked, there is still plenty of upside in the industry. The real impact is that with slower growth, you will have to be somewhat selective as to which names to own rather than just buying at will. Qualcomm and Intel remain my top two picks.

When it comes to dominating markets, it doesn’t get much better than Intel’s position in the PC microprocessor arena. However, that market is maturing, and Intel finds itself in a precarious situation longer term if it doesn’t find new avenues for growth. In this premium research report on Intel, our analyst runs through all of the key topics investors should understand about the chip giant. Better yet, you’ll continue to receive updates for an entire year. Click here now to learn more.

Consumer Reports makes case for Windows 7 PCs

Consumer Reports makes case for Windows 7 PCs — May be smarter to search for new PC with older OS rather than deal with Windows 8
Computerworld (US)

FRAMINGHAM – Windows 7 may be the better choice as a PC operating system on new systems than the just-released Windows 8, Consumer Reports magazine said this week.

“Windows 7 generally received favorable reviews when it was released,” Consumer Reports’ Donna Tapellini said in a piece Tuesday on the consumer watchdog’s website. “[Three years] after its 2009 launch, there still haven’t been a lot of complaints. If you’ve been happy with Windows 7 and even Windows XP up until now, there’s no compelling reason to switch to Windows 8.”

Consumer Reports does not evaluate and rate operating systems, as it does, say, clothes washers, cars or even computers. Instead, it staked out its position this fall when it praised Windows 8 as great for tablets, but because of its split personality, not for everyone.

http://bit.ly/WuJJ31

Original Video Content Impacts Technology Purchasing (REPORT ANALYSIS)

ReelSEO

A recent consumer survey by IDGTechNetwork showed that video plays a vital role in the purchasing decisions of today’s electronics and technology consumers. But it’s not just standard video advertising that we are talking about. They look for a variety of content that will help them make a better informed decision and then tend to act on the information that they’ve found. Here’s a quick breakdown of the survey results.

Before I talk about the results I wanted to give you a run down of how the data was collected. It was an online survey aimed at ‘better understanding the demographic profile of the IDGTechNetwork audience.‘ The research was done via online invitations to complete the survey by ‘editorial stakeholders of sites within the IDGTechNetwork.‘ The responses were collected from April 30th to August 24th of this year.

With an audience of 130 million unique visitors and 2,354 respondents we get a margin of error right around 2%. Of course, that’s about half of the US online audience. It’s hard to say what percentage of the online video viewing audience in the US it is though as we don’t know if all 130 million of them watch video online monthly. I haven’t seen IDG on any comScore or Nielsen report as either a publisher (10th place in May was 11.4M video viewers for Nielsen, comScore is much higher) or an online video ad network.

Continue reading… 

IDC Retail Insights Survey Estimates Showrooming Will Influence up to $1.7 billion in 2012 Holiday Retail Sales

IDC PMS4colorversion no shadow 300x98 IDC Retail Insights Survey Estimates Showrooming Will Influence up to $1.7 billion in 2012 Holiday Retail Sales

IDC Press Release

Framingham, MA – IDC Retail Insights today revealed the ground breaking results of a new survey report, “Business Strategy: At Hand Versus In Hand — Will Consumers Have the Upper Hand in the 2012 Holiday Showroom Showdown?” (Document #GRI237839). Based on the survey of 1000 online consumers and prior IDC and IDC Retail Insights research, the new report revealed that some 48 million shoppers — about 20% of the U.S. adult population will “showroom” or use their smartphones in some manner while they shop in stores during the upcoming winter holiday season. This represents a 134% increase from 2011 when 20.5 million shoppers showroomed. IDC Retail Insights forecasts that the number of showrooming shoppers will grow to 59 million next year, 69 million in 2014, and 78 million in 2015. This year, according to the new research, showrooming behaviors will influence $0.7 to $1.7 billion in holiday retail purchases.

For the full press release click here

In B2B Email Subject Lines, Some Keywords Work Better Than Others

Marketing Charts

B2B email marketers: writing a business-themed email? Use terms such as “money,” “revenue,” and “profit” in the subject line, and avoid words such as “ROI,” “asset,” and “industry.” That’s one of many takeaways from a new reportPlease or in order to access this content. by Adestra, which analyzed almost 1.2 billion B2B emails sent within the past 12 months. The study examines performance metrics across a number of subject line themes – including discount, news, and content – and also looks at subject line length and personalization.

This latest study from Adestra follows from its July 2012 report, which was not limited to the B2B sector.

Find out what works and what doesn’t…

Mobile Advertising Projected to Grow 47% Annually

IDC PMS4colorversion no shadow 300x98 Mobile Advertising Projected to Grow 47% Annually

The often predicted year of mobile advertising may be 2012.  Karsten Weide, program vice president, IDC Digital Media and Entertainment, expects mobile spend to double from 2011 to 2012, reaching almost $4.5 billion.  Today, more than 60% goes to cellphones and most of the remainder to tablets and eReaders.  But by 2016, Weide predicts when ad spend reaches almost $15 billion, it will be almost equally split between phones and tablets/eReaders.

Karsten Mobile Ad Research1 Mobile Advertising Projected to Grow 47% Annually

 Click here to download the trends and dollars spread across search and display over the next four years….

These Graphs Show How Tablet Ad Spending Will Crush Smartphones Over The Next Four Years

Insider

As multi-screen usage becomes more and more integrated into America’s everyday life, advertisers are recalibrating how to allocate their ad dollars.

This doesn’t just mean what portion of an overall advertising budget will be spent on mobile devices — according to eMarketer, the 2012 mobile ad budget made up a tiny sliver of the digital ad spend and an even tinier 2 percent of total ad money spent — but how that specific mobile budget will be divvied up between mobile phones and tablet/eReaders

For all the charts click here

Infographic: SaaS and Cloud Software

IDC PMS4colorversion no shadow 300x98 Infographic: SaaS and Cloud Software

Worldwide SaaS and Cloud Software 2012-2016 Forecast and 2011 Share

This infographic is based off a study that presents IDC’s view of worldwide software as a service and cloud software market performance by key vendors in 2011 and the anticipated market performance through 2016. The cloud software market reached $22.9 billion in revenue in 2011, a 30.9% year-over-year growth rate, and will grow to $67.3 billion by 2016 at a CAGR of 24.0%.

Learn more on what IDC has to say about cloud.

IDC Market Min SaaS and Cloud Infographic: SaaS and Cloud Software

Study: ‘Digitally mature’ companies are more profitable

Ragan.com

This might be the evidence you need to persuade your boss or client to invest in social media: A newly released study says “digitally mature” companies are more profitable than their counterparts.

The years-long study from Capgemeni Consulting and the MIT Center for Digital Business looked at more than 400 companies and found that the ones that thoughtfully invest in social media and let it drive their business decisions “benefit from a considerable ‘Digital Advantage’ and demonstrate significantly better financial performance than their peers.”

In other words, it pays to use social media.

What, exactly, does “digitally mature” mean? According to the study’s authors, it’s based on two factors: “digital intensity” and “transformation management intensity.”  Apparently, it’s all about intensity—although really, it sounds a bit like word soup, so let’s explore what they mean.

Continue reading… 

 

U.S. Public IT Cloud Services Revenue Projected to Reach $43.2 Billion in 2016,

IDC PMS4colorversion no shadow U.S. Public IT Cloud Services Revenue Projected to Reach $43.2 Billion in 2016,
IDC Press Release

Forecast segmented by five functional technology categories and six vertical sectors

FRAMINGHAM, Mass. – International Data Corporation (IDC) today announced the availability of a new report,U.S. Public IT Cloud Service by Industry Sector (Doc #237520), that forecasts revenue from 2011-2016 of U.S. public IT cloud services. According to the report, U.S. public IT cloud services revenue will experience a compound annual growth rate (CAGR) of 18.5% over the forecast period, from $18.5 billion in 2011 to $43.2 billion in 2016. The new report focuses specifically on the public cloud services that are shared among unrelated enterprises and consumers, open to a largely unrestricted universe of potential users, and designed for a market, not a single enterprise. The forecast is segmented by five functional technology categories and by six vertical sectors.

For the full release click here