tbr 1q11 end-of-quarter benchmark report

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TBR T E C H N O L O G Y B U S IN E SS R E SE A R C H , IN C. Technology Business Research Accelerating Customer Success Through Business Research

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Technology Business Research is a different kind of research company. Our bottoms-up approach provides a look at the technology industry unlike anything you’ve seen before. We analyze company performance in professional services, networking and mobility, computing and hardware, and software on a quarterly basis, leveraging our data to create industry benchmarks and landscapes that provide a business perspective on leaders and laggards and their business plans. We are experts in the business of technology. The TBR Computing research team compiled information from the First Quarter 2011 into this End-of-Quarter Benchmark Report. These supporting slides include information regarding segment views such as PC, x86 server, proprietary server, storage, and microelectronics. These segments are covered over different geographic areas such as the Americas, EMEA, and Asia Pacific. TBR provides insight and identifies trends, drill-downs, a market overview, and a quarterly focus.

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Page 1: TBR 1Q11 End-of-Quarter Benchmark Report

TBR

TECHNOLOGY BUSINESS RESEARCH, INC.

Technology Business ResearchAccelerating Customer Success Through Business Research

Page 2: TBR 1Q11 End-of-Quarter Benchmark Report

TBR

TECHNOLOGY BUSINESS RESEARCH, INC.

End-of-Quarter Benchmark Report

COMPUTER BUSINESS QUARTERLYSM

Publish Date: June 29, 2011

Authors: Ezra Gottheil, Greg Richardson, Krista Macomber, Cassandra Mooshian and Emily Searles – Analysts, Computing Practice

Content Editor: John Spooner ([email protected]), Director, Computing Practice

First Calendar Quarter 2011

Page 3: TBR 1Q11 End-of-Quarter Benchmark Report

TBR

June 2011 TBR CBQ End-of-Quarter Benchmark Report | 1Q11 ©2011 Technology Business Research, Inc.3

Executive Summary3 Key Findings & Trends

4-5 Drill-Downs Segment Geographic

6 Market Overview7 Market Leaders

8-9 Quarterly FocusIT vendors will drive revenue and margin growth by delivering pre-configured, integrated solutionsThe Android-ARM configuration will take market share and user time away from the Wintel combination

Segment Views10-12 PC 13-15 X86 Server16-18 Proprietary Server19-21 Storage22-24 Microelectronics

Geographic Views25-27 Americas28-30 EMEA31-33 Asia Pacific

Appendix34-44 CBQ Financial Metrics45-70 Additional Metrics71-75 CBQ Taxonomy

76 TBR Capabilities77 About TBR

Content

Please use this link

to complete a brief survey on this report.

http://www.surveymonkey.com/s/TBR-CBQ_BM

Page 4: TBR 1Q11 End-of-Quarter Benchmark Report

TBR

June 2011 TBR CBQ End-of-Quarter Benchmark Report | 1Q11 ©2011 Technology Business Research, Inc.4

Mobile devices are reshaping the IT landscape by validating new competitors and driving changes in go-to-market strategy

Accelerating demand for constant connectivity will create opportunities in datacenter and mobile offerings

• Mobile devices are changing the shape of the IT market, as PC and handset vendors jockey for position in the tablet market and server and storage vendors aggressively build integrated solutions to manage the influx of network traffic.

• PC vendors are leveraging elements of differentiation, such as non-traditional OSs and app stores, to drive adoption of their tablet devices.

• Server and storage vendors are benefiting from the flood of new devices on networks, creating new demand for infrastructure to support the increased traffic.

Vendors will leverage pre-configured solutions to drive high-margin deals

• TBR expects vendors to leverage pre-configured offerings in key solution areas, such as private cloud and virtualization, to drive high-value sales, better positioning themselves for revenue and profit growth.

• Pure-play vendors, such as NetApp, are leveraging teams of partners to deliver integrated solutions, touting increased value and choice with best-of-breed solutions.

• Multiplatform vendors such as Dell and IBM are expanding their portfolios via acquisition, augmenting their capabilities in key solution component areas such as storage and analytics.

Android and ARM will expand beyond mobile devices, creating new hurdles for traditional stalwarts Intel and Microsoft

• TBR believes the emergence of ARM chips and an Android-based OS in higher-performance systems, such as notebooks, signals a breakdown of the barrier between mobile devices and full-computing systems.

• Historically, Windows and Intel have maintained strength in PCs and servers, while Google and ARM accelerated in the mobile market. In 2011, these vendors will cross paths, as Intel delivers chips for tablets and notebook makers release ARM-based systems.

Executive Summary

Page 5: TBR 1Q11 End-of-Quarter Benchmark Report

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June 2011 TBR CBQ End-of-Quarter Benchmark Report | 1Q11 ©2011 Technology Business Research, Inc.5

Hardware vendors are heating up the competitive landscape, as customer datacenter and compute needs evolve

LOB Key Changes & Drivers Top Rev. Top Growth Trends to Monitor

PCPC vendors continued to benefit from corporate refresh cycles, while expanding their mobile offerings for new growth.

HP$11.5 billion

Apple 22.0%

Vendors will ramp R&D spend to develop differentiated tablet PCs and capitalize on strong growth.

x86 ServerThe x86 landscape is evolving rapidly, as new technologies enable the architecture to better meet high-end customer requirements, such as private cloud deployments.

HP$3.4 billion

HP17.0%

Vendors will continue leveraging x86 servers as core pieces of networked solutions to drive unit shipment and margin growth.

Prop Server

Vendors are touting the scalability, power and cost efficiency features of proprietary servers in an effort to boost high-end server sales and offset an industry shift toward x86 systems.

IBM$2.4 billion

IBM32.9%

Leverage services and consulting to promote higher ROI for customers and drive sales.

StorageStorage vendors leveraged alliances and acquisitions to add value to their core product lineups and expand their market reach.

EMC$1.9 billion

NetApp32.3%

TBR believes businesses will continue to invest in storage as they build out datacenters and virtualized infrastructures.

Micro-electronics

The March earthquake in Japan hindered production for vendors including Toshiba, Fujitsu and Sony; however, demand for mobile device chipsets supported the industry- average double-digit microelectronic revenue growth.

Intel$11.5billion

IBM 27.8%

TBR anticipates demand related to virtualization initiatives coupled with an increasing focus on shifting manufacturing processes to low-cost regions will support microelectronics profitability in 2Q11.

Executive Summary

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June 2011 TBR CBQ End-of-Quarter Benchmark Report | 1Q11 ©2011 Technology Business Research, Inc.6

Infrastructure buildouts in emerging markets and worldwide demand for mobile devices are the keys to revenue expansion

Geo Key Changes & Drivers Top Rev. Top Growth Trends to Monitor

United States/Americas

Enterprise revenue in the Americas was driven by sustained IT refresh and increasing demand for cloud computing, while consumer spending was driven more by demand for mobile devices as opposed to PCs.

HP$13.9billion

Apple84.8%

TBR believes demand for mobile computing devices and enterprise IT buildouts will sustain growth in the Americas.

EMEA

Despite continued economic uncertainty throughout the region, vendors achieved growth by expanding channel partnerships, targeting Eastern European growth markets and capitalizing on enterprise customer demand.

HP$11.7billion

Apple52.7%

The EMEA region will achieve incremental revenue improvements in 2011, as economies stabilize and vendors enhance their portfolios and gain traction.

Asia PacificStrength in China, largely resulting from demand for mobile devices, enabled vendors to overcome turmoil in Japan resulting from natural disaster, and sustain strong growth in the APAC region.

Panasonic$18.3 billion

Apple123.0%

The APAC region will maintain growth, albeit at a muted pace, in 2011, due to unfavorable year-to-year compares and recovery in Japan.

Emerging Markets

Computing companies leveraged new technologies, including mobile devices and cloud infrastructures, to penetrate growth markets globally. In particular, BRIC countries continued to be a target for PC revenue growth.

Companies will tout their IT capabilities, delivering need-based solutions to capitalize on social infrastructure buildouts and expand their revenue potential in emerging markets.

Executive Summary

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June 2011 TBR CBQ End-of-Quarter Benchmark Report | 1Q11 ©2011 Technology Business Research, Inc.7

HPSony

Intel

Apple

IBM

Lenovo

Panasonic

Oracle/SunAcer

EMC

DellToshiba

Fujitsu NetApp

AMD

HDS

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Operating Margin

1Q11 REVENUE GROWTH VS. OPERATING MARGIN

SOURCE: TBR

TBR

Avg. Revenue Growth 10.9%

Avg. Operating Margin8.7%

Vendors look to the cloud to meet demand for need-based solutions and mobile, interconnected devices in the commercial and consumer spaces

NOTE: SPHERE SIZE DEPICTS SIZE OF REVENUE.

• Large, multiplatform vendors augmented R&D with partner and acquired technologies to bring to market comprehensive solutions, with a focus on cloud and virtualization, laying a foundation for cross-selling opportunities and margin expansion.

• The natural disaster in Japan affected companies with operating plants in the country, as well as those that conduct a majority of business in Japan, such as Panasonic, Toshiba and Sony. Hardware vendors are focused on securing their supply chains for the remainder of 2011.

Executive Summary

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June 2011 TBR CBQ End-of-Quarter Benchmark Report | 1Q11 ©2011 Technology Business Research, Inc.8

Hardware vendors are balancing business process efficiency with R&D spend targeting growth niches to drive sustainable revenue expansionRevenue, Growth & Operating Margin LeadersCompany Size Key Strategy Drivers & Changes

HP $31.6 billion

Battle cyclical consumer PC revenue declines with bundled solutions targeting cloud and connectivity.

Revenue growth was led by HP’s IPG and ESSN segments, up 41% and 11% YTY, respectively.

Panasonic $24.8 billion

Minimize company costs and refine focus on fewer market segments to better serve customers.

Panasonic is targeting growth verticals with Toughbook notebooks; TBR believes the vendor will roll out a tablet geared toward mobile professionals in 2011.

Apple $24.7 billion

Drive revenue growth by becoming a phone company, targeting the rapidly-growing smartphone market to supplement its PC business.

iPhone sales grew 113.1% YTY to 18.6 million units, accounting for 49.9% of Apple’s 1Q11 revenue, driven by global carrier expansion.

Company Growth Key Strategy Drivers & Changes

Apple 82.7%Consumerization of IT is driving the iPhone and iPad into the enterprise, positioning Apple for commercial growth.

The iTunes Store pulled in nearly $1.4 billion in revenue, while demand for iPads exceeded production capacity and boosted revenues.

Intel 24.7%Augment the development of core processors by acquiring companies in markets adjacent to its primary business to grow and diversify revenue.

Notebook revenue grew 15.4% year-to-year to $4.2 billion, as enterprise PC refresh cycles in mature markets offset slowing consumer demand.

NetApp 21.9% Gain share and grow unit shipments across all market tiers to drive revenue and margin growth.

NetApp is increasingly targeting midmarket and enterprise customers to sustain revenue growth.

Company OM % Key Strategy Drivers & Changes

Intel 32.4%Intel will leverage 22nm manufacturing processes to reduce operating expenses and expand into new markets to drive revenue and growth.

TBR believes the introduction of compact chipsets in 2Q11 will drive revenue growth to a rate that will offset the impact of increased expenses.

Apple 31.9%Leverage aggressive marketing to maintain its reputation for innovative products and services and drive margin growth.

Operating margin was at an all-time high, up to 31.9% of revenue from 29.3% in the previous quarter, on the back of increased iPhone revenue.

IBM 15.1%Integrate hardware, software and services segments to deliver increased revenue and margins.

Operating margin improved by 180 basis points on a year-to-year basis to 15.1% from 13.3% in 1Q10.

Executive Summary

Page 9: TBR 1Q11 End-of-Quarter Benchmark Report

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June 2011 TBR CBQ End-of-Quarter Benchmark Report | 1Q11 ©2011 Technology Business Research, Inc.9

IT vendors will drive revenue and margin growth by delivering pre-configured, integrated solutionsDatacenter computing and storage vendors are targeting revenue and margin growth by penetrating high-value opportunities with bundled solutions. Vendors are expanding partnerships and seeking new acquisition opportunities to better align their portfolios to drive solution sales.Best-of-breed approach

• Pure-play vendors, such as NetApp, are leveraging a team approach to delivering integrated solutions by continually expanding partnerships to augment and complement best-of-breed capabilities.

• For example, NetApp leverages its strong relationship with Cisco to deliver FlexPod, a pre-validated and pre-tested reference architecture to deliver a stack of applications, such as SAP and Red Hat Linux over virtualization, including vSphere and Hyper-V.

Single-stack approach

• Multiplatform vendors are targeting higher-margin sales by packaging individual pieces of their portfolios into integrated solutions, aiming to align their offerings with business needs.

• Large vendors, including HP, IBM and Dell, are leveraging acquisitions to round out their multiplatform portfolios, targeting areas such as analytics and storage.

• In May, Dell rolled out its vStart preconfigured virtualization solution, based on Dell PowerEdge servers, Dell iSCSI SAN, and PowerConnect switches. Dell is touting increased efficiency in deploying virtualized and cloud solutions in a single rack.

Executive Summary: Quarterly Focus

SOURCE: NETAPP AND CISCO

FlexPod infrastructure with validated workloads

SOURCE: DELL

Map of Dell integrated solutions approach

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June 2011 TBR CBQ End-of-Quarter Benchmark Report | 1Q11 ©2011 Technology Business Research, Inc.10

The Android-ARM configuration will take market share and user time away from the Wintel combinationNo longer exclusively for handsets, ARM processors will displace x86 for many uses and users

• TBR expects x86/Windows to remain the default business configuration for PCs and servers, but ARM is emerging in higher-power devices.

• First netbooks and now tablets have demonstrated that not all users need powerful PCs for many business tasks.

• Intel’s slow emergence in the mobile space has allowed ARM to emerge as the default processor.

• In 1Q11, PC makers announced new notebooks that will be powered by ARM chips.

Non-Windows OSs, all running primarily on ARM, perform an increasing percentage of tasks once dominated by Windows

Executive Summary: Quarterly Focus

• iOS and Android are now well-established, and TBR believes HP/Palm’s webOS will also become a viable non-Windows OS.• So far, the tablet versions of Android and webOS are not broadly in use, but we believe both will have substantial numbers

of users performing business tasks.• The next major version of Windows will run on ARM processors, providing an option for users requiring full Windows

compatibility. Windows will then be available, via virtualization, on devices that are not primarily Windows devices.ChromeOS represents another approach, and is also available on both x86 and ARM processors

• TBR believes ChromeOS will play a role in institutions with tight budgets, such as schools, and where users need devices in different places, like medical and retail settings.

• ChromeOS is viable wherever Google Apps have been widely adopted.• Google’s ChromeOS goes in the opposite direction from iOS, Android, and webOS. Instead of making it easy to have many

applications on the device, it provides no applications – only access to Web applications.

Smartphone/Tablets

• Price pressure will fracture the Wintel alliance as OEMs seek the profit pools available from the Android-ARM model

Laptop/Desktop

• ARM Licensing and free Google OS will fracture the Wintel alliance in this space causing huge industry disruptions

Server/Storage

• Android-ARM will fracture here as ARM gains a foothold in purpose build engines and low power use cases needing more robust OSs

Android-ARM

Wintel

SOURCE: TBR

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June 2011 TBR CBQ End-of-Quarter Benchmark Report | 1Q11 ©2011 Technology Business Research, Inc.11

Acer

Apple

DellHP

Lenovo

PanasonicToshibaSony

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PC Revenue Growth

1Q11 YEAR-TO-YEAR PC REVENUE GROWTH VS. CORPORATE REVENUE GROWTH

SOURCE: TBR

Average PC Revenue Growth = 0.2%

Average CorporateRevenue Growth for

Segment = 11.4%

TBR

PC vendors will push into high-growth markets to increase revenue by expanding their mobile portfolios

NOTE: SPHERE SIZE DEPICTS SIZE OF REVENUE.

• Lackluster consumer PC demand, coupled with cannibalization resulting from the emergence of tablet PCs, drove down average PC revenue growth in 1Q11.

• PC vendors are working to penetrate growth markets, namely tablet PCs, and expand globally to drive incremental growth.

Segment View: PC

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June 2011 TBR CBQ End-of-Quarter Benchmark Report | 1Q11 ©2011 Technology Business Research, Inc.12

PC vendors are supplementing their core revenue bases with new mobile offerings and initiatives for global expansionPC Revenue LeadersCompany Size Key Strategy Drivers & Changes

HP $8.7 billion

Couple scale and PC customer base with an expanding, unified portfolio to promote cross-selling of multiple webOS devices and counter headwinds in the consumer PC space.

HP offset overall slow PC sales in the consumer segment by attaining 27.9% year-to-year revenue growth for workstations.

Dell $7.5 billion

Dell is rearchitecting its PC designs and manufacturing operations to cut costs and offset declining sales.

Notebook PC revenue growth of 3.4% YTY and a 6.6% increase in unit shipments of workstations partially offset a 4.5% decline in desktop unit shipments for Dell in 1Q11.

Apple $5.0 billion

Leverage positioning as a PC innovator to maintain high-end consumer market share, while riding a wave of “consumerization of IT” to drive commercial sales.

Strong sales in Asia and the popularity of the MacBook Air and MacBook Pro pushed Mac sales to 3.8 million units.

PC Revenue Growth LeadersCompany Growth Key Strategy Drivers & Changes

Apple 32.3%Apple will leverage its brand recognition and growing traction in China resulting from strong adoption of the iPhone to drive PC sales in emerging APAC markets.

Mac revenues were strong, with sales rising 27.8% year-to-year despite the lack of growth in the overall PC market.

Lenovo 14.4%Lenovo will continue to rely on its Think-brand PC sales and enterprise purchasing to maintain profitability, while investing in R&D to support initiatives to boost its consumer and mobile businesses.

Revenue from PC sales in China continued to grow in 1Q11 with 12.3% gains on an annual basis. Lenovo continues to attack the rural regions of China while implementing its protect strategy in eastern first-and second-tier cities.

Panasonic 5.5%Leverage new regional-specific sales teams to expand the global footprint of Toughbook PCs while ramping investment to gain entrance into the high-growth niches of mobile and Internet-connected devices.

Panasonic upgraded its Toughbook 52 and rolled out the new 53 model, with sleeker designs and improved battery life to boost enterprise customer appeal and drive sales.

Segment View: PC

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June 2011 TBR CBQ End-of-Quarter Benchmark Report | 1Q11 ©2011 Technology Business Research, Inc.13

PC vendors are leveraging the cloud and mobile form factors for a sustainable runway to future growth

Key 1Q11 M&As, Alliance Changes & DealsCompany TBR Insights

FujitsuFujitsu is designing an industry-specific touchscreen PC to be implemented across Asahi Mutual Life Insurance Co.’s 15,000-member sales force.

Lenovo

Lenovo’s recent partnership with Saatchi resulted in the launch of its “Do” campaign to position ThinkPad for growth outside of the enterprise space by growing the brand name, targeting the “Apple Crowd” of consumers aged 18-25.Lenovo will leverage its acquisition of Medion, a German PC and consumer electronics company, to create consumer PC market leadership in Europe, while growing revenue and scale for rapid expansion.

Portfolio/GTM & RM ChangesCompany TBR Insights

LenovoLenovo is differentiating its enterprise PC offerings with Cloud Ready Client, a software package that will enhance cloud-based applications on Lenovo ThinkPad PCs.

Panasonic

Panasonic will invest $122.5 million in Taiwan in 2011 to quadruple its printed circuit board capacity and meet skyrocketing demand for smartphones – including building a new plant, slated to be operational in October, and increasing capacity at a new plant.

ToshibaIn April, Fujitsu refreshed its proGREEN portfolio of high-end, energy-efficient PCs, workstations and displays, and will lean on channel partnerships to drive sales.

Trends & Outlook• As the tablet market continues to crowd, TBR believes vendors will increasingly differentiate their offerings,

targeting consumers with multimedia capabilities, and enterprises with productivity applications.• TBR anticipates vendors will develop “hybrid” devices suitable for both personal and professional use as increasing

adoption of smartphones and tablets drives adoption of consumer devices within the enterprise.• With rising adoption of mobile and virtualized environments, we believe cloud-based storage and services will

emerge as differentiators within the PC space. We expect vendors to seek partnerships to bolster their cloud capabilities.

Segment View: PC

Page 14: TBR 1Q11 End-of-Quarter Benchmark Report

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June 2011 TBR CBQ End-of-Quarter Benchmark Report | 1Q11 ©2011 Technology Business Research, Inc.14

The ability of x86 servers to handle enterprise datacenter requirements, as well as cloud and virtualized environments, will drive x86 demand

NOTE: SPHERE SIZE DEPICTS SIZE OF REVENUE.

• Average x86 revenue growth accelerated in 1Q11, as customers refreshed older x86 models and shifted to the architecture from proprietary servers as a result of the closing performance gap around mission-critical workload.

• TBR expects x86 vendors to drive future revenue growth by integrating x86 servers as components of larger solutions buildouts.

Segment View: x86 Server

Acer

HP

Dell

IBM

Oracle/Sun

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x86 Revenue Growth

1Q11 x86 REVENUE GROWTH VS. CORPORATE REVENUE GROWTH

SOURCE: TBR

Average Corporate Revenue Growth for Segment: -4.0%

Average x86Revenue Growth = -4.9%

TBR

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June 2011 TBR CBQ End-of-Quarter Benchmark Report | 1Q11 ©2011 Technology Business Research, Inc.15

Vendors are leveraging a solutions strategy to drive sales of x86 servers and position for upselling opportunitiesx86 Server Revenue LeadersCompany Size Key Strategy Drivers & Changes

HP $3.4 billion

Cloud Systems and Flex Network will drive sales of x86 servers by leveraging prepackaged, end-to-end solutions to drive revenue over the next two years.

HP’s x86 servers benefited from competitive pricing and an integrated sales approach, resulting in 10.8% revenue growth.

Dell $2.0 billion

Dell is expanding its server and storage offerings to improve datacenter environments by creating integrated solutions with improved ability to handle mission-critical workloads compared to previous-generation models.

Dell rolled out its new PowerEdge M915 server, available in two or four socket models.

IBM $950 million

IBM is driving System x revenue and profit growth by targeting expansion in cloud and virtualized datacenters, supporting adoption of high-end System x servers.

System x continued on a double-digit growth trajectory, led by more than 42% year-to-year growth in high-end System x revenue.

x86 Server Revenue Growth LeadersCompany Growth Key Strategy Drivers & Changes

IBM 19.7%Maintain System x revenue growth by capitalizing on the continued server refresh cycle and bundle System x as part of larger networking solutions.

System x revenue grew 19.7% year-to-year to $950 million, leading the systems and technology group.

HP 10.8%Leverage acquisitions, including 3Par and Vertica Systems, and a strong Converged Infrastructure strategy to drive x86 unit shipment and revenue growth.

Growth was driven by 11% year-to-year growth in industry-standard servers, which accounts for 61% of total ESSN revenue.

Dell 10.5%Dell’s server business is benefiting from the company’s solutions strategy, targeting the private cloud and vertical solutions to maintain double-digit revenue growth in 1Q11.

Server revenue led in segment revenue growth, rising 10.5% year-to-year in 1Q11, climbing 110 basis points to 13.1% of total revenue.

Segment View: x86 Server

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Vendors are increasingly migrating to x86-based systems, as virtualization and improved performance is supporting new workloads on x86

Key 1Q11 M&As, Alliance Changes & DealsCompany TBR Insights

HP

Microsoft and HP expanded their longstanding relationship in 1Q11. The $250 million deal, to be paid over three years, will include Microsoft and HP delivering Azure on HP’s Proliant servers to build Infrastructure for Microsoft’s cloud.

Fujitsu

Fujitsu won a deal with Méditel, a mobile communication service provider, to implement a combination of nearly 60 HP PRIMEQUEST and PRIMERGY x86 servers as the ground work for its network technology and expansion model.

Portfolio/GTM & RM ChangesCompany TBR Insights

Fujitsu

Fujitsu touted its mission-critical PRIMEQUEST x86 servers with Intel Xeon processors as a solution for businesses who require an economical Linux or Windows-based server platform.

Fujitsu integrated its PRIMERGY servers with the new Microsoft Small Business Server 2011 Standard to deliver a cost-effective, user-friendly all-in-one platform via channel and distribution partners.

AMDAMD drove adoption of its Opteron 6000 processor in more of its OEM partners’ servers, and launched the Opteron 6200 in its hybrid supercomputing system.

Trends & Outlook• Intel further closed the performance gap between x86 and proprietary servers and ramped up competition in the

server industry at large with its April release of the new Xeon E7 processors. A slew of vendors rushed to develop and market new products based on the chipset, which supports mission-critical enterprise workloads and is multi-OS compliant, which is ideal for enterprise private cloud applications.

• TBR believes server vendors will be increasingly pressured to develop comprehensive in light of datacenter consolidation in 2011; EMC began leveraging SSD-based compute capacity to bridge the gap between servers and storage and increase its share of the datacenter in 1Q11, leveraging PCIe/flash-based server cache technology to bring compute power to storage and storage capacity to compute-intensive environments.

Segment View: x86 Server

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HP will leverage its “Always On” strategy to win share and better compete against growth leader IBM in the business-critical server arena

NOTE: SPHERE SIZE DEPICTS SIZE OF REVENUE.

• Average proprietary server revenue growth improved from –21.3% in 1Q10 to 7.2% in 1Q11.

• Server vendors are touting simplified all-in-one solutions that include management tools and software in an attempt to drive sales.

• IBM significantly outpaced its competitors in revenue growth, as a result of its strength in bundling its multifaceted portfolio into need-based solutions.

Segment View: Proprietary Server

IBM

Oracle/Sun

HP

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Proprietary Server Revenue Growth

1Q11 PROPRIETARY SERVER REVENUE GROWTH VS CORPORATE REVENUE GROWTH

Average Corporate Revenue Growth for Segment = -2.2%

Average Proprietary Server Revenue Growth =

7.2%

TBR

SOURCE: TBR

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June 2011 TBR CBQ End-of-Quarter Benchmark Report | 1Q11 ©2011 Technology Business Research, Inc.18

Proprietary Server Revenue LeadersCompany Size Key Strategies Drivers & Changes

IBM $1.8billion

Leverage System z as part of its overall enterprise solutions strategy to target growth markets to maximize revenue.

IBM posted strong sales of POWER and System z mainframes in 1Q11, with System z revenues up 36.5% annually, alongside operating margin improvements.

HP $546 million

Couple IT solutions and management tools with high-end server offerings to drive sales by addressing customer pain-points.

HP continues to tout the low total cost of ownership of Superdome systems to drive sales.

Oracle/Sun

$374 million

Integrate software, such as the Sun Ray platform, into Sun’s high-end servers to attract consumers via cloud and virtualization capabilities.

Oracle is building on its strength in software and high-end servers, rounding out its stack to accelerate sales growth, evidenced by the 1Q11 introduction of the Sun ZFS Storage Appliance.

Proprietary Server Growth LeadersCompany Growth Key Strategies Drivers & Changes

IBM 31.1%Following trends of increased virtualization and workload consolidation, IBM will increase its mix of high-end server offerings.

IBM’s STG revenue and growth were driven by System z’s climb to 25% of STG revenue in 1Q11 from 22% in the year-ago quarter, and its 36.5% growth over the same compare.

HP 1.5%Leverage proprietary servers as a core element of industry-specific Converged Infrastructure solutions, positioning for unit shipment growth.

Strong adoption of HP’s “Always On” servers propelled sales in 1Q11, with business-critical server revenue up 1.5% from 1Q10.

Oracle/Sun –11.0%

Oracle will augment its strength in software development with strategic hardware partnerships, such as with Fujitsu, to drive growth across its server platform.

Oracle’s focus on SPARC servers limits its ability to gain scale in hardware, inhibiting high-end server revenue growth.

Prop server vendors are integrating hardware into end-to-end solutions to paint a high ROI picture and drive sales

Segment View: Proprietary Server

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Oracle cut support for Itanium in an attempt to stifle HP’s hardware business, heating up the competitive landscape around high-end servers

Trends & Outlook• TBR anticipates demand for proprietary servers will continue to soften, as a plethora of x86-based servers

increasingly capable of handling mission-critical workloads flood the market. We believe the vendors that bundle their high-end servers with storage and software into integrated solutions for virtual and cloud-based environments will be the most successful in combating these mounting headwinds.

• The changing landscape of the proprietary server market was highlighted by Oracle’s announcement discontinue support for Intel’s Itanium processor in 1Q11, which points to Oracle’s efforts to drive a single-stack, SPARC-centric approach.

Key 1Q11 M&As, Alliance Changes & DealsCompany TBR Insights

Oracle/Sun

In 1Q11, Oracle announced the discontinuation of its support for Intel’s Itanium platform, indicating the company’s efforts to deliver a SPARC-based single stack solution and creating new headwinds for HP Integrity server business.

Segment View: Proprietary Server

Portfolio/GTM & RM ChangesCompany TBR Insights

Oracle/ Sun

Oracle and Fujitsu delivered the SPARC Enterprise M3000 server with an updated processor and Oracle Enterprise Manager for improved mission-critical workload protection and manageability.

IBM

Taiwan will become home to another IBM research and development center. This new facility, announced in March, will focus on Power Systems business servers.

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Storage vendors are gaining gain share of next-generation datacenters for growth, adding value to their portfolios with software and services

NOTE: SPHERE SIZE DEPICTS SIZE OF REVENUE.

• Storage vendors on average maintained revenue growth in 1Q11, on the back of strengthening demand for virtualized and cloud-based infrastructures resulting from an influx of unstructured data.

• The revenue growth gap within the storage market is widening; leaders such as EMC and NetApp successfully round out their portfolios with software and services, while Dell fell further behind as it axed its relationship with EMC.

Segment View: Storage

Dell

EMC

HDS

HP

IBM

NetApp

Oracle/Sun

-20%

-10%

0%

10%

20%

30%

-20% -10% 0% 10% 20% 30% 40%

Corp

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Storage Revenue Growth

1Q11 STORAGE REVENUE GROWTH VS CORPORATE REVENUE GROWTH

SOURCE: TBR

Average Corporate Revenue Growth for segment = 7.8%

Average Storage Revenue Growth = 8.4%

TBR

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Storage Revenue LeadersCompany Size Key Strategy Drivers & Changes

EMC $1.8 billion

Couple internal storage development with acquisitions to deliver end-to-end integrated solutions that enable the intersection of public and private clouds with Big Data.

EMC’s strong midtier revenue growth of 20% in 1Q11 was driven by the February rollout and strong adoption of VNX and VNXe unified storage systems, as well as expanded channel partner programs.

HDS $1.1 billion

HDS is expanding its Universal Storage Platform to capitalize on customer migration to virtualized environments, driving unit shipment growth by solving specific customer datacenter needs.

HDS rolled out the Hitachi IT Operations Director in 1Q11, a solution to address growing customer demand for efficient management of security, assets and software.

HP $980 million

Provide added incentive for enterprises to replace legacy storage with HP 3Par Utility Storage, driving Converged Infrastructure for additional revenue through solutions and services

During 1Q11, 3Par Utility Storage grew by double digits due to rapidly growing pools of Big Data and transition to the cloud.

Storage Growth LeadersCompany Growth Key Strategy Drivers & Changes

NetApp 26.6%Leverage low-end penetration to drive upselling opportunities, positioning for higher-value sales as customers increasingly demand cloud and virtualized technologies to refresh their IT infrastructures.

As a result of its strong channel and partner network, NetApp’s indirect revenue surpassed 75% of its corporate revenue in 1Q11 and will continue to grow.

HDS 19.8%HDS is developing its partner channel, Hitachi TrueNorth, targeting value-added services for its storage products to expand its opportunities for growth.

HDS expanded its alliance with SAP for deeper technology integration and to share marketing resources around cloud computing, storage virtualization and information lifecycle management.

EMC 17.0%Leverage an expanded software portfolio and channel to add value to core storage offerings and drive high-margin revenue growth.

TBR attributes EMC’s expanded revenue to global expansion – with double-digit growth in non-U.S. countries (BRIC, EMEA & APAC) – as well as increased demand for high-end information storage products.

Storage vendors are piecing together solutions to drive sales via infrastructure efficiency and increased value to stored data

Segment View: Storage

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TBR

June 2011 TBR CBQ End-of-Quarter Benchmark Report | 1Q11 ©2011 Technology Business Research, Inc.22

Trends & Outlook• Storage vendors are maintaining an active cadence of alliance and acquisition activity to establish portfolios of

adjacent solutions to augment and add value to their core offerings, such as Big Data and analytics.• Vendors are leveraging partner and acquired technologies to piece together comprehensive, need-based solutions

around storage infrastructure, enabling them to marry cloud, physical and virtual infrastructure to open doors for entrance into new geographic and vertical areas.

• TBR anticipates vendors will increasingly seek organic and inorganic means to attain competitive security software to differentiate their storage solutions and quell customer concerns in light of Japan’s natural disaster and an increasing amount of business-critical data on virtualized and cloud-based infrastructures.

Strategic alliances and acquisitions fuel storage vendors’ push into growth avenues for improved future performance

Segment View: Storage

Key 1Q11 M&As, Alliance Changes & DealsCompany TBR Insights

NetAppNetApp joined forces with EXASOL to capitalize on rapidly-growing demand for data analytics, unveiling a flexible and scalable analytic data warehouse management solution.

EMC

EMC leveraged Greenplum and an alliance with SAS to deliver improved Big Data analytics and warehousing technologies.

EMC allied with Harris Corporation and RSA to develop Trusted Cloud Solutions, which deliver resource sharing and isolation, as well as security for collaborative work environments.

Portfolio/GTM & RM ChangesCompany TBR Insights

HPHP is offering the 3Par Storage System combined with 3Par Thin Conversion Software to drive sales via increased storage efficiency.

NetAppIn May, NetApp rolled out the Hadoop-focused E2600 system, based on Engenio technology, to enable real-time Big Data analytics.

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June 2011 TBR CBQ End-of-Quarter Benchmark Report | 1Q11 ©2011 Technology Business Research, Inc.23

AMD

IBM

Intel

SonyToshiba

-5%

0%

5%

10%

15%

20%

25%

30%

0% 5% 10% 15% 20% 25% 30%

Corp

orat

e Re

venu

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row

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Microelectronics Revenue Growth

1Q11 MICROELECTRONICS REVENUE GROWTH VS. CORPORATE REVENUE GROWTH

SOURCE: TBR

TBR

Average Corporate Revenue Growth for Segment = 7.5%

AverageMicroelectronics Revenue

Growth = 14.2%

Microelectronics vendors will invest in R&D and acquisitions to augment core technologies and capitalize on demand for mobile devices

NOTE: SPHERE SIZE DEPICTS SIZE OF REVENUE.

• Average microelectronics revenue sustained double-digit growth in 1Q11, as chipmakers experienced strong demand for mobile devices and the infrastructure to support them.

• We believe microelectronics manufacturers will diversify their portfolios with a focus on producing compact, low-power chips to support OEMs’ ever-expanding portfolios of mobile devices.

Segment View: Microelectronics

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Chip manufacturers will drive revenue and profit growth by achieving business process efficiency and zeroing in on high-growth niches

Microelectronics Revenue LeadersCompany Size Key Strategy Drivers & Changes

Intel $12.8billion

Intel is targeting the market for low-power, Internet-connected and embedded devices as part of its push into emerging consumer technologies to expand its non-PC revenue.

Intel’s Other segment grew significantly in 1Q11, up 70.5% from the year-ago quarter, led primarily by its digital home group and strong adoption of embedded devices.

Toshiba $3.6 billion

Augment a strong supply chain with segment consolidation to reduce fixed costs, boost synergies and drive revenue and margin growth.

To reduce investment costs outside of Toshiba’s main business functions, the company has completed the sale of its non-memory chip plant in Nagasaki Prefecture to Sony for $648 million.

AMD $1.6 billion

Ramps R&D spend while expanding the OEM and ODM channel to capitalize on strong demand for mobile form factors as well as high-end gaming.

Strong OEM and end-customer adoption of Fusion APU platforms, launched during the quarter, and sales of Brazos notebook processors in their first full quarter of availability, drove 1Q11 revenue growth.

Microelectronics Revenue Growth LeadersCompany Growth Key Strategy Drivers & Changes

Intel 24.7%Intel delivers new products to market by alternating upgrades to existing architectures and comprehensive architecture refreshes.

Intel’s notebook segment sustained double-digit year-to-year growth, up 15.4% in 1Q11, reaching segment record-breaking revenue of $4.2 billion.

IBM 18.7%Focus on emerging markets, such as SMB and midsized enterprises, to appeal to different customer segments.

Sustained demand from microelectronics due to the introduction of high-end systems drives segment revenue growth of 18.7%

Toshiba 10.0%Combat the declining profitability of hard disk drives by boosting sales in other products and streamlining company processes.

Strong demand for smartphone LCDs coupled with successful cost-cutting led to improved operating income for Toshiba’s microelectronics.

Segment View: Microelectronics

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Trends & Outlook• TBR believes chipmakers will increasingly target under-penetrated markets in coming quarters, such as the SMB

sector, as well as emerging geographies globally, to lay a foundation for revenue expansion.• Throughout 2011, chipmakers are aggressively adopting a three-pronged approach to increase future profitability:o Develop processes boosting chip production efficiency, such as Intel’s 22nm manufacturing – due to commence

by the end of 2011.o Restructure to align operations with higher-margin technologies, such as mobile devices and high-end gaming.o Shift higher-cost processes, such as chipset manufacturing, to low-cost regions such as China and Vietnam.

Key 1Q11 M&As, Alliance Changes & DealsCompany TBR Insights

IBMIBM signed development partnerships with Samsung and ARM Holdings, positioning its chip business with a runway for growth in mobile and entertainment devices.

Fujitsu

Fujitsu Semiconductor Pacific Asia partnered with TV content security solutions provider Verimatrix to capitalize on growing demand for digital and pay-TV services, namely in the region’s emerging markets.

Fujitsu Semiconductor attained IP rights from ARM to accelerate time to market for customers, helping drive sales of Fujitsu’s semiconductor offerings, enhancing its portfolio and spurring global expansion.

Portfolio/GTM & RM ChangesCompany TBR Insights

AMDAMD rolled out the Radeon HD 600 series of graphics cards geared toward the HD gaming and computing niche.

Intel

Intel will invest more than $5 billion in developing a new manufacturing facility for 14nm chips at its site in Chandler, Ariz., expected to be completed by 2013.

Intel’s Enterprise Platforms and Services Division (EPSD) rolled out a new server motherboard based on the Second Generation Intel Core processor family targeted at SMBs to meet server needs.

Improved operational efficiency coupled with penetration of the mobile device market will supplement chip revenues from PCs and servers

Segment View: Microelectronics

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June 2011 TBR CBQ End-of-Quarter Benchmark Report | 1Q11 ©2011 Technology Business Research, Inc.26

Increasing customer spend on mobile devices will continue to fuel revenue expansion in the Americas in 2011

• 1Q11 average Americas revenue growth increased by 380 basis points from 4Q10 as a result of continued demand in the private sector and improving consumer spend.

• TBR attributes leading revenue growth to strong demand for mobility; Apple maintained its leadership on the back of continued strong demand for the iPhone, iPad and MacBook Air, while Intel significantly accelerated its growth, primarily as a result of its capitalization of demand for infrastructure to support mobile devices, to achieve the No. 2 ranking.

NOTE: SPHERE SIZE DEPICTS SIZE OF REVENUE.

Geographic View: Americas

HP

Acer

Dell

Panasonic

NetApp

Oracle/Sun

SonyFujitsu

AMD IBM

Intel

EMC

Toshiba

Lenovo

HDS

-20%

-10%

0%

10%

20%

30%

-20% -10% 0% 10% 20% 30% 40% 50%

Corp

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Americas Revenue Growth

1Q11 AMERICAS REVENUE GROWTH VS. CORPORATE REVENUE GROWTH

SOURCE: TBR

Average Corporate Revenue Growth for segment = 10.9%

Average Americas Revenue Growth = 14.3%

TBR

Apple: (84.8, 82.7)

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June 2011 TBR CBQ End-of-Quarter Benchmark Report | 1Q11 ©2011 Technology Business Research, Inc.27

Revenue and growth leaders will capitalize on enterprise cloud buildouts and high-end consumer electronics to sustain growth in the AmericasAmericas Revenue LeadersCompany Size Key Strategies Drivers & Changes

HP $13.9 billion

Drive corporate revenue in the Americas via sales to enterprise customers, with strong growth in workstation PCs, industry-standard servers and ESS blade.

The U.S. made up 34.0% of revenue in 1Q11 – up 2.5% from the previous year. The Americas in total comprised 44% of revenue growth.

Apple $11.7 billion

Maintain premium position in all product lines, competing in the higher end of each market for PCs, handsets, tablets and media players to attain a strong revenue base in its domestic market.

The Americas comprised 38% of Apple’s revenue, up from 34% in 4Q10, on the back of iPhone sales doubling on an annual basis in the Americas, driven by entry into Verizon Wireless in the U.S.

IBM $10.3 billion

Lean on brand recognition in the Americas to capitalize on resurging enterprise demand and maintain a large revenue base in the region.

Americas revenue increased in 1Q11, driven by higher demand for its System z, POWER and software offerings.

Americas Revenue Growth LeadersCompany Growth Key Strategies Drivers & Changes

Apple 84.8%Leverage strong base of Apple Stores in the Americas as a strategic differentiator, driving sales and margins while strengthening customer relationships with consumers and VSMBs.

Americas revenue nearly doubled year-to-year, driven by nearly $1.4 billion from sales of music, video, iOS apps and e-books.

Intel 42.4%In the Americas, Intel will continue to expand its mobile capabilities by developing hardware and software offerings around mobile devices.

Acquiring McAfee allows Intel to differentiate itself by delivering hardware-software-security bundles to gain traction, particularly in Internet-connected devices and associated markets – which are Americas growth niches.

NetApp 25.2%Leverage cloud and channel development to capitalize on rising demand from U.S. enterprise customers, and win share from rivals.

Accelerated deployments of virtualized and cloud infrastructures in the U.S. led NetApp to 25.2% year-to-year Americas revenue growth.

Geographic View: Americas

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June 2011 TBR CBQ End-of-Quarter Benchmark Report | 1Q11 ©2011 Technology Business Research, Inc.28

Vendors will capitalize on increasing spend in the Americas by investing to bolster their mobile businesses and develop need-based solutions

Portfolio/GTM & RM ChangesCompany TBR Insights

HPTBR anticipates key product releases in the U.S., including the FlexNetwork and the TouchPad, will drive HP’s sales growth.

FujitsuFujitsu will leverage new offerings, including notebooks and tablets, to spur customer spend as well as boost its presence in services and the datacenter in the Americas.

ToshibaToshiba will market notebooks and its new tablet to better compete in the consumer PC market in the Americas.

Lenovo

The sleek design of Lenovo’s forthcoming ThinkPad Edge and ThinkPad X1 will appeal to customers in the U.S., helping Lenovo garner brand recognition in the country and drive sales in the Americas.

Key 1Q11 M&As, Alliance Changes & DealsCompany TBR Insights

EMC

EMC has incorporated its VNXe family into its channel programs, increasingly leaning on partners to gain share and capitalize on growth in the SMB market in the Americas.

EMC acquired Virginia-based network forensics firm NetWitness in April. Netwitness’ network security analysis solutions were incorporated into the active portfolio of RSA and aligned with the Archer eGRC platform, to detect, analyze and combat Big Data threats in real time.

ToshibaToshiba Medical Systems acquired Vital Images, Inc., producer of visualization and analysis software for North America, for $273 million in 1Q11.

Trends & Outlook• Overall revenue growth in the Americas accelerated in 1Q11, as an uptick in consumer spending in mature markets

augmented sustained demand in the enterprise and SMB sectors.• Vendors will increasingly ramp R&D and marketing spend to capitalize on growing demand for mobile form factors,

including tablet PCs and thin-and-light notebooks, throughout 2011.• Pure-play and multiplatform vendors alike are delivering end-to-end, customer-centric solutions that marry cloud

with Big Data to foster new growth in enterprise accounts within the Americas, leaning on acquisitions and alliances to bolster their technologies and channel presence.

Geographic View: Americas

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June 2011 TBR CBQ End-of-Quarter Benchmark Report | 1Q11 ©2011 Technology Business Research, Inc.29

Vendors will piece together hardware, software and services to capitalize on enterprise IT refresh cycles in EMEA in 2011

NOTE: SPHERE SIZE DEPICTS SIZE OF REVENUE.

.

• Overall weak economies in EMEA have muted the region’s growth, leading to an average revenue growth rate of 3.7%, the lowest of the geographic segments.

• Pure-play vendors such as Apple and HDS sustained the strongest growth; however, as customers increase spending on critical IT upgrades, TBR expects the multiplatform vendors, such as HP, to accelerate growth as they deliver end-to-end, need-based solutions.

Geographic View: EMEA

HPIBM

Acer

SonyAMD

Dell

EMCLenovo

Panasonic

NetApp

Oracle/Sun

Toshiba

Fujitsu

Intel

HDS

-20%

-10%

0%

10%

20%

30%

40%

-40% -30% -20% -10% 0% 10% 20% 30%

Corp

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EMEA Revenue Growth

1Q11 EMEA REVENUE GROWTH VS. CORPORATE REVENUE GROWTH

Average Corporate Revenue Growth for Segment = 10.9%

Average EMEA Revenue Growth = 3.9%

TBR

SOURCE: TBR

Apple:(52.7, 82.7)

Page 30: TBR 1Q11 End-of-Quarter Benchmark Report

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June 2011 TBR CBQ End-of-Quarter Benchmark Report | 1Q11 ©2011 Technology Business Research, Inc.30

An uptick in demand for cloud infrastructures and mobile computing is opening new doors to hardware adoption, leading to growth in EMEAEMEA Revenue LeadersCompany Size Key Strategy Drivers & Changes

HP $11.7 billion

Offer unified, cloud-based solutions to customers by leveraging an expansive portfolio and partner network.

EMEA revenue, which comprises 37.0% of HP’s overall revenue, fell by 20 basis points year-to-year to $11.7 billion.

IBM $7.8 billion

IBM is leveraging expansion in Growth Markets, such as Eastern Europe, to inject new life into mature, core product lines, such as System z, and open doors to new opportunities, including Smarter Cities.

Despite double-digit growth in France, broad economic uncertainty in EMEA resulted in another quarter of revenue decline for IBM in the region.

Apple $6.6 billion

Leverage Apple stores to provide an attractive sales and service environment that increases customer identification with the company and drives EMEA iPhone and iPad demand.

EMEA saw positive iPhone and Mac sales growth during 1Q11. Increased Mac sales may be the result of a halo effect related to higher iPhone/iPad adoption.

EMEA Revenue Growth LeadersCompany Growth Key Strategy Drivers & Changes

Apple 52.7%Apple will propel EMEA growth through sales of the popular iPhone, as well as capturing revenue through the adoption of other Apple products and services, such as Mac and iTunes.

Strong demand for portable products, such as the MacBook Air and iPad, fueled Apple’s growth in emerging economies in EMEA.

HDS 19.9%Increasingly invest in R&D to capitalize on growing adoption of cloud computing in EMEA throughout 2011.

Hitachi reported strong power systems revenue in Africa, as customers are increasingly building out their IT infrastructures.

Intel 17.2%Intel will focus on building chipsets for mobile devices while also capitalizing on PC sales in growth markets throughout Eastern Europe.

Intel’s significant presence in the EMEA enterprise market drove its double-digit revenue growth in the region in 1Q11, offsetting weakening consumer demand.

Geographic View: EMEA

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Vendors will leverage strategic investments and partnerships to drive adoption of enterprise datacenters and cloud-connected mobile devices

Portfolio/GTM & RM ChangesCompany TBR Insights

EMCIn April, EMC realigned operations in EMEA into EMEA-North and EMEA-South to spur customer adoption of cloud and accelerate growth the region experienced in 2010.

HP

HP appointed Yves de Talhouet as SVP, Enterprise Business and managing director for EMEA, to integrate its multifaceted enterprise and consumer solutions, spurring cloud migration and adoption of the Instant On Enterprise in the region.

Toshiba

Toshiba will expand its Social Infrastructure deals in Europe by building two thermal power facilities in Bulgaria. The company has also invested €37.6 million in the Bulgarian energy sector through the development of a solar park.

Trends & Outlook• Vendors are investing in R&D while expanding partnerships to enhance their server and storage offerings and

accompanying services to support critical IT upgrades within the enterprise and SMB segments in EMEA.• High-end consumer electronics vendors, such as Apple and Sony Ericsson, will increasingly target the burgeoning

mobile market via R&D and partnerships for unit shipment and revenue growth within the region in 2011.• Cloud computing is a key value-add to both efficient datacenters and mobile computing; vendors will aggressively

seek both organic and inorganic means to enhance their cloud capabilities and capitalize on this growth frontier.

Key 1Q11 M&As, Alliance Changes & DealsCompany TBR Insights

Fujitsu

Fujitsu will leverage the acquisition of consulting and integration services firm ICT AG to capitalize on demand in EMEA for high-performance computing and drive sales of PRIMERGY servers.

IntelIntel Mobile Communications will accelerate its 4G LTE and connectivity capabilities through the acquisition of Egypt-based SySDSoft’s intellectual assets.

Sony

Sony is leveraging its joint venture with the U.K.-based Sony Ericsson to aid in the deployment of its communications entertainment approach to entering the mobile computing market.

Geographic View: EMEA

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June 2011 TBR CBQ End-of-Quarter Benchmark Report | 1Q11 ©2011 Technology Business Research, Inc.32

Mobile and cloud computing will remain the key drivers in APAC’s growth frontier going forward

NOTE: SPHERE SIZE DEPICTS SIZE OF REVENUE.

• APAC maintained the highest revenue growth of the geographies despite the natural disasters in Japan during the quarter.

• Vendors targeted emerging technology growth markets, namely mobile and cloud computing, to drive revenue and growth; Acer fleshed out its mobile device portfolio, while Apple expanded its retail headcount and carrier partnerships to ride a wave of demand for iPhones and iPad.

Geographic View: APAC

HP

Fujitsu

Toshiba

Dell

IBM

Intel

SonyPanasonic

Acer

AMD

HDSEMC

Lenovo

Oracle/Sun

NetApp

-20.0%

-10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

-30.0% -15.0% 0.0% 15.0% 30.0%

Corp

orat

eRev

enue

Gro

wth

APAC Revenue Growth

1Q11 APAC REVENUE GROWTH VS. CORPORATE REVENUE GROWTH

SOURCE: TBR

TBR

Average Corporate Revenue Growth for Segment =10.9%

Average APAC Revenue Growth = 16.9%

Apple:(82.7, 123.0)

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June 2011 TBR CBQ End-of-Quarter Benchmark Report | 1Q11 ©2011 Technology Business Research, Inc.33

Vendors will target growth in China’s large, emerging consumer market in 2011 to minimize losses caused by disruptions in the Japanese marketAsia Pacific Revenue LeadersCompany Size Key Strategy Drivers & Changes

Panasonic $18.3 billion

Panasonic is expanding beyond its core Japanese market while shifting from a product-centric to a solution-based lineup to gain revenue in APAC.

The emerging markets of China and India led Panasonic in growth in 1Q11, with China up 40.2% from the year-ago quarter.

Toshiba $14.0 billion

Toshiba is leveraging social infrastructure projects in emerging markets, such as China, to expand its addressable APAC market and offset declining revenue in North America and EMEA.

Revenues in Japan rose 3.3% year-to-year in 1Q11, comprising 47.8% of revenue. We expect sales from this region to drop slightly in 2Q11 due to the economic disruption of the earthquake.

Fujitsu $11.9 billion

Fujitsu is working to maintain its position in segments where it is strong, such as Japan, while pushing bundled service, hardware and software offerings to penetrate new markets.

Fujitsu is investing in datacenters in Japan to grow its cloud business, while working with suppliers and to rebuild manufacturing facilities in Japan to minimize production disruption and meet customer demand.

Asia Pacific Revenue Growth LeadersCompany Growth Key Strategy Drivers & Changes

Apple 123.0%Apple is leveraging its retail stores to capitalize on demand for the iPhone and iPad and rapidly increase its APAC revenue – namely in greater China, including China, Hong Kong and Taiwan.

iPhone revenue from greater China rose 250.0% YTY in 1Q11 with total revenue increasing to "just under $5 billion," which is almost one-fifth of its business.

NetApp 25.5%Lean on strengthening channel partnerships to increase penetration and grow revenue in APAC throughout 2011, combating headwinds resulting from the natural disaster in Japan.

APAC revenue, which is all channel revenue, grew 15.9% YTY in 1Q11, as NetApp targets global expansion.

Acer 24.3%Acer focuses on its core portfolio of traditional business and consumer PCs while diversifying its revenue outlets with the development and release of mobile devices to the APAC market.

Economic growth and continued demand for notebook PCs drove strong APAC growth, enabling the region to remain Acer’s growth leader for the sixth consecutive quarter.

Geographic View: APAC

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Trends & Outlook• Hardware vendors will continue to compete for share of the APAC market, to capitalize on the region’s consistent

double-digit revenue growth – but headwinds in the form of yen appreciation and turmoil in Japan are mounting.• APAC-based companies such as Lenovo will maximize their strong brand presence within the region’s growth

markets, namely China, to protect against foreign entrants while aggressively expanding outside of the region.• Vendors with manufacturing facilities in Japan, including Fujitsu, Toshiba and Sony, have restored operations in their

damaged facilities following the earthquake and tsunami in March – but not without a hit to profitability. TBR anticipates soft demand from consumers and enterprises will hinder sales in the Japanese market, while component shortages will render vendors challenged to meet demand from customers based abroad in a timely manner.

APAC will continue to lead in revenue growth, but sales will be mutedby physical and economic pressures

Portfolio/GTM & RM ChangesCompany TBR Insights

AppleApple will use China as a test bed for its emerging market strategy and global expansion, leveraging the iPhone to generate a halo effect to boost sales of other products.

FujitsuFujitsu announced $80-$90 million in funding for two new datacenters in New Zealand to rival the facilities of HP, IBM and Datcom.

IBM

IBM invested $38 billion to develop a datacenter in Singapore to provide services to Indian companies transitioning to the cloud.

IBM announced in March a new R&D center in Taiwan focused on Power Systems business servers.

Key 1Q11 M&As, Alliance Changes & DealsCompany TBR Insights

Apple

To increase its addressable iPhone market, Apple expanded iPhone carriers globally to Verizon, SK Telecom in Korea and Saudi Telecom in Saudi Arabia.

Humanitarian issues at Foxconn in China could damage Apple’s brand recognition, which is a large driver of sales.

Intel

Intel will produce a chipset with a built-in WiBro module, to eliminate the need for additional devices to access wireless Internet connections from PCs and mobile devices, as part of a joint venture with South Korea's National Pension Service and Samsung.

Geographic View: APAC

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HP is piecing together all aspects of its multifaceted portfolio to continue to grow its expansive corporate revenue base

Financial Metrics: Revenue

RANKING TBR SCORE COMPANY TOP 3 COMPANIES

1 8.59 HP

2 7.28 PANASONIC

3 7.26 APPLE

4 7.25 IBM

5 6.44 TOSHIBA

6 6.22 SONY

7 5.54 FUJITSU

8 5.42 DELL

9 5.01 INTEL

10 3.49 LENOVO

11 3.44 EMC

12 3.40 ACER

13 2.88 ORACLE/SUN

14 2.87 AMD

15 2.84 NETAPP

16 2.77 HDS

TBR

$31,632

$24,775

$24,667

$24,607

$20,371

$19,205

$15,605

$15,017

$12,847

$4,879

$4,608

$4,361

$1,664

$1,613

$1,428

$1,057

$0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000

SOU

RCE: TBR AND

COM

PANY D

ATA

REVENUE (IN $ MILLIONS)

1Q114Q10AVERAGE

Top Ranking AnalysisHP maintained the top spot in terms of total revenue, up 2.5% year-to-year to $31.6 billion in 1Q11. The company is

battling cyclical declines in consumer PC revenue with bundled solutions

centered on cloud and connectivity. Despite experiencing slow growth in

1Q11, TBR believes HP will leverage its scale and expansive portfolio to drive its Converged Infrastructure strategy

forward.

1Q11 Average = $13,021 1Q11 Standard Deviation = $10,348

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June 2011 TBR CBQ End-of-Quarter Benchmark Report | 1Q11 ©2011 Technology Business Research, Inc.36

Apple is following market demand, taking a step away from PCs and toward smartphones and tablets to maintain industry-leading growth

Peaches1012

Financial Metrics: Revenue Growth

RANKING TBR SCORE COMPANY TOP 3 COMPANIES

1 10.00 APPLE

2 5.82 INTEL

3 5.56 NETAPP

4 5.38 HDS

5 5.25 EMC

6 4.89 LENOVO

7 4.28 IBM

8 4.06 FUJITSU

9 3.82 HP

10 3.82 AMD

11 3.80 PANASONIC

12 3.74 SONY

13 3.68 DELL

14 3.67 TOSHIBA

15 2.30 ACER

16 2.08 ORACLE/SUN

TBR

82.7%

24.7%

21.9%

19.8%

18.4%

14.4%

7.7%

5.2%

2.5%

2.5%

2.2%

1.0%

0.9%

1.6%

-14.4%

-16.8%

-50.0% -30.0% -10.0% 10.0% 30.0% 50.0% 70.0% 90.0%

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REVENUE YEAR-TO-YEAR CHANGE

1Q11

4Q10

AVERAGE

Top Ranking AnalysisApple posted the strongest year-to-year corporate revenue growth among CBQ

companies for a fourth consecutive quarter in 1Q11. Apple is driving revenue growth by

becoming a phone company, targeting the rapidly growing smartphone market to

supplement its PC business. iPhone sales accounted for 49.9% (or $12.3 billion) of Apple’s

1Q11 revenue, driven by global carrier expansion and increased distribution.

1Q11 Average = 10.9% 1Q11 Standard Deviation = 22.5%

Page 37: TBR 1Q11 End-of-Quarter Benchmark Report

TBR

June 2011 TBR CBQ End-of-Quarter Benchmark Report | 1Q11 ©2011 Technology Business Research, Inc.37

NetApp’s increasing penetration of the enterprise will enable it to maintain a competitive gross margin compared to peers

Financial Metrics: Gross Margin

RANKING TBR SCORE COMPANY TOP 3 COMPANIES

1 8.13 NETAPP

2 7.72 INTEL

3 7.41 EMC

4 6.94 ORACLE/SUN

5 6.22 HDS

6 5.79 IBM

7 5.64 AMD

8 5.49 APPLE

9 4.24 SONY

10 3.93 FUJITSU

11 3.82 PANASONIC

12 3.60 HP

13 3.48 TOSHIBA

14 3.40 DELL

15 2.22 LENOVO

16 2.00 ACER

TBR

65.0%

61.4%

58.6%

54.4%

48.0%

44.1%

42.8%

41.4%

30.3%

27.5%

26.5%

24.6%

23.5%

22.9%

12.3%

10.3%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0%

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GROSS MARGIN

1Q11

4Q10

AVERAGE

Top Ranking AnalysisNetApp led its industry peers in terms

of gross margin in 1Q11. NetApp's COGS fell 110 basis points year-to-year to 35.0% of revenue, or $500

million, spurring gross margin to rise 110 basis points year-to-year to

65.0%. TBR estimates gross margin will increase 120 basis points year-to-year to 65.1% in 2Q11, driven by an improving product mix and a shift

toward higher-margin sales.

1Q11 Average = 37.1% 1Q11 Standard Deviation = 17.3%

Page 38: TBR 1Q11 End-of-Quarter Benchmark Report

TBR

June 2011 TBR CBQ End-of-Quarter Benchmark Report | 1Q11 ©2011 Technology Business Research, Inc.38

Increased expenditures will slightly hinder Intel’s margins in 2Q11, but TBR believes the vendor is poised for long-term profit expansion

Financial Metrics: Operating Margin

RANKING TBR SCORE COMPANY TOP 3 COMPANIES

1 8.98 INTEL

2 8.90 APPLE

3 5.82 IBM

4 5.79 NETAPP

5 5.74 EMC

6 5.02 HDS

7 4.78 HP

8 4.54 DELL

9 4.41 ORACLE/SUN

10 4.10 TOSHIBA

11 3.97 FUJITSU

12 3.67 AMD

13 3.34 ACER

14 3.32 LENOVO

15 2.21 SONY

16 0.00 PANASONIC

TBR

32.4%

31.9%

15.1%

14.9%

14.6%

10.7%

9.4%

8.1%

7.3%

5.7%

5.0%

3.3%

1.5%

1.4%

-4.6%

-17.6%

-20.0% -10.0% 0.0% 10.0% 20.0% 30.0% 40.0%

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OPERATING MARGIN

1Q11

4Q10

AVERAGE

Top Ranking AnalysisIntel maintained the top position

among peers in terms of operating margin in 1Q11, despite declining

from 33.5% in 1Q10 to 32.4% in 1Q11 as a result of increased operating

expense. Increased spending related to the McAfee and Infineon Wireless Solutions acquisitions will negatively

impact profit margins, but TBR believes the introduction of new technologies in 2Q11 will drive

revenue growth to a rate that will offset the impact of increased

expense.

1Q11 Average = 8.7% 1Q11 Standard Deviation = 12.2%

Page 39: TBR 1Q11 End-of-Quarter Benchmark Report

TBR

June 2011 TBR CBQ End-of-Quarter Benchmark Report | 1Q11 ©2011 Technology Business Research, Inc.39

An uptick to SG&A expenditures enabled Apple to surpass Acer to lead industry peers in SG&A investment in 1Q11

Financial Metrics: SG&A Expense

RANKING TBR SCORE COMPANY TOP 3 COMPANIES

1 7.32 APPLE

2 7.02 ACER

3 6.70 LENOVO

4 6.57 HP

5 6.14 TOSHIBA

6 5.99 DELL

7 5.92 INTEL

8 5.43 AMD

9 5.36 SONY

10 5.20 FUJITSU

11 3.89 ORACLE/SUN

12 3.86 IBM

13 2.02 EMC

14 1.91 HDS

15 1.03 NETAPP

16 0.88 PANASONIC

TBR

7.1%

8.6%

10.1%

10.7%

12.8%

13.5%

13.8%

16.2%

16.5%

17.3%

23.5%

23.7%

32.5%

33.0%

37.2%

37.9%

0.0% 10.0% 20.0% 30.0% 40.0%

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SG&A AS A % OF REVENUE

1Q11

4Q10

AVERAGE

Top Ranking AnalysisApple surpassed Acer to post the smallest

SG&A expense as a percentage of total revenue among CBQ companies in 1Q11. Acer’s SG&A spend was up 7.7% from the

year-ago quarter as the company a llocated resources to expand its addressable market, whi le Apple’s SG&A expense dropped from

nearly $1.89 bi llion in 4Q10 to $1.76 billion in 1Q11, a 7.0% sequential decline.

1Q11 Average = 19.7% 1Q11 Standard Deviation = 10.4%

Page 40: TBR 1Q11 End-of-Quarter Benchmark Report

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June 2011 TBR CBQ End-of-Quarter Benchmark Report | 1Q11 ©2011 Technology Business Research, Inc.40

Acer’s strategic investments are yielding revenue growth, enabling the vendor to post industry-leading R&D expense metrics

Financial Metrics: R&D Expense

RANKING TBR SCORE COMPANY

TOP 3 COMPANIES

1 7.26 ACER

2 6.93 DELL

3 6.86 LENOVO

4 6.59 APPLE

5 6.52 HP

6 5.99 HDS

7 5.75 TOSHIBA

8 5.65 FUJITSU

9 5.36 PANASONIC

10 5.29 IBM

11 5.03 SONY

12 3.87 EMC

13 3.41 NETAPP

14 2.59 INTEL

15 2.08 ORACLE/SUN

16 0.10 AMD

TBR

0.3%

1.3%

1.5%

2.4%

2.6%

4.3%

5.0%

5.3%

6.2%

6.4%

7.3%

10.9%

12.4%

14.9%

16.5%

22.8%

0.0% 5.0% 10.0% 15.0% 20.0% 25.0%

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R&D EXPENSE AS A % OF REVENUE

1Q11

4Q10

AVERAGE

Top Ranking AnalysisAcer maintained the smallest level of R&D expense as a percentage of total revenue

compared to industry peers. Efforts to capitalize on emerging technologies,

specifically mobile devices, drove R&D expenses up 28.3% year-to-year. Going

forward, TBR anticipates accelerated revenue growth will offset the effects of

strategically increased expenses, supporting profitability.

1Q11 Average = 7.5% 1Q11 Standard Deviation = 6.4%

Page 41: TBR 1Q11 End-of-Quarter Benchmark Report

TBR

June 2011 TBR CBQ End-of-Quarter Benchmark Report | 1Q11 ©2011 Technology Business Research, Inc.41

Intel will aggressively target synergies across its growing headcount base in 2011

Financial Metrics: Revenue Per Salesperson

RANKING TBR SCORE COMPANY TOP 3 COMPANIES

1 10.00 INTEL

2 6.98 ACER

3 5.98 AMD

4 4.97 LENOVO

5 4.70 APPLE

6 4.43 DELL

7 4.46 HP

8 4.23 SONY

9 4.13 EMC

10 4.11 HDS

11 4.09 PANASONIC

12 4.07 FUJITSU

13 4.01 NETAPP

14 4.00 TOSHIBA

15 3.93 ORACLE/SUN

16 3.90 IBM

TBR

$35.69

$15.03

$10.54

$6.01

$4.78

$3.57

$3.70

$2.68

$2.22

$2.13

$2.06

$1.95

$1.70

$1.65

$1.34

$1.20

$0.00 $5.00 $10.00 $15.00 $20.00 $25.00 $30.00 $35.00 $40.00

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ATAANNUAL REVENUE PER SALESPERSON (IN $ MILLIONS)

1Q11

4Q10

AVERAGE

Top Ranking AnalysisIntel retained the top spot for the annual

revenue per salesperson metric. Intel posted double-digit sales and marketing headcount growth as the acquisitions of McAfee and

Infineon's Wireless Solutions business were finalized; In coming quarters, TBR anticipates

Intel will work to eliminate headcount redundancies among the three companies to maintain its leadership compared to peers.

1Q11 Average = $6,014,616 1Q11 Standard Deviation = $8,757,973

Page 42: TBR 1Q11 End-of-Quarter Benchmark Report

TBR

June 2011 TBR CBQ End-of-Quarter Benchmark Report | 1Q11 ©2011 Technology Business Research, Inc.42

Acer will increase its headcount strategically in tandem with revenue growth, boosting its revenue per employee metric

Financial Metrics: Revenue Per Employee

RANKING TBR SCORE COMPANY TOP 3 COMPANIES

1 10.00 ACER

2 8.24 APPLE

3 5.41 HDS

4 5.33 LENOVO

5 4.76 DELL

6 4.68 AMD

7 4.53 INTEL

8 4.46 NETAPP

9 4.37 SONY

10 4.27 ORACLE/SUN

11 4.13 HP

12 4.01 TOSHIBA

13 3.98 EMC

14 3.85 FUJITSU

15 3.73 PANASONIC

16 3.68 IBM

TBR

$2,869.95

$1,836.72

$851.15

$823.07

$624.80

$596.63

$547.05

$521.03

$491.57

$454.47

$406.13

$363.34

$353.23

$308.64

$268.82

$248.47

$0.00 $400.00 $800.00 $1,200.00 $1,600.00 $2,000.00 $2,400.00 $2,800.00 $3,200.00

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ANNUAL REVENUE PER EMPLOYEE (IN $ THOUSANDS)

1Q11

4Q10

AVERAGE

Top Ranking AnalysisEmployee headcount remained relatively flat year-to-year, and when coupled with declining revenue from the year-ago quarter, annual revenue per employee

dropped significantly to a level similar to that of 1Q10, indicating cyclicality, yet remaining well-above the

industry average in terms of TBR score for the metric. Acer’s headcount increased 1.5% on a year-to-year

basis, ending 1Q11 at 6,700 employees versus 6,600 in 1Q10. TBR expects headcount to increase in 2H11 as

the company continues to invest in R&D.

1Q11 Average = $722,818 1Q11 Standard Deviation = $686,483

Page 43: TBR 1Q11 End-of-Quarter Benchmark Report

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June 2011 TBR CBQ End-of-Quarter Benchmark Report | 1Q11 ©2011 Technology Business Research, Inc.43

Restructuring initiatives and favorable year-to-year compares will enable Panasonic to maintain competitive headcount growth in 2011

Financial Metrics: Headcount Growth

RANKING TBR SCORE COMPANY TOP 3 COMPANIES

1 6.31 PANASONIC

2 6.01 TOSHIBA

3 5.94 ORACLE/SUN

4 5.94 FUJITSU

5 5.78 SONY

6 5.73 ACER

7 5.33 DELL

8 5.33 IBM

9 5.08 AMD

10 4.98 HP

11 4.15 HDS

12 3.64 INTEL

13 3.00 LENOVO

14 1.88 EMC

15 1.47 APPLE

16 1.42 NETAPP

TBR

-2.8%

-0.5%

0.0%

0.0%

1.2%

1.5%

4.5%

4.5%

6.3%

7.1%

13.3%

17.0%

21.8%

30.1%

33.2%

33.5%

-20.0% -10.0% 0.0% 10.0% 20.0% 30.0% 40.0%

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HEADCOUNT GROWTH YEAR-TO-YEAR

1Q11

4Q10

AVERAGE

Top Ranking AnalysisPanasonic's headcount fell 2.8% year-to-year in 1Q11, enabling the vendor to lead its industry

peers in terms of the metric. TBR believes Panasonic will continue

realigning its headcount with growth initiatives to boost profitability going forward.

1Q11 Average = 10.7% 1Q11 Standard Deviation = 12.6%

Page 44: TBR 1Q11 End-of-Quarter Benchmark Report

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June 2011 TBR CBQ End-of-Quarter Benchmark Report | 1Q11 ©2011 Technology Business Research, Inc.44

Apple’s new cash cows, the iPhone and iPad, will keep its asset base high and cost of sales low, boosting ROA in coming quarters

Financial Metrics: Return on Assets

RANKING TBR SCORE COMPANY TOP 3 COMPANIES

1 9.64 APPLE

2 8.45 INTEL

3 6.94 AMD

4 6.73 IBM

5 6.19 ORACLE/SUN

6 5.22 DELL

7 5.21 NETAPP

8 4.94 HP

9 4.75 EMC

10 3.92 ACER

11 3.56 TOSHIBA

12 3.55 HDS

13 3.54 LENOVO

14 3.39 FUJITSU

15 2.23 SONY

16 1.64 PANASONIC

TBR

24.3%

20.1%

14.7%

13.9%

12.0%

8.5%

8.5%

7.5%

6.8%

3.9%

2.6%

2.5%

2.5%

2.0%

-2.1%

-4.3%

-5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0%

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ATARETURN ON ASSETS

1Q11 4Q10 AVERAGE

Top Ranking AnalysisApple grew its ROA 280 basis points

year-to-year to 24.3%, maintining the top spot against CBQ peers. Apple's

net income improved 94.8% year-to-year and its total asset base grew by 66.3%, accelerated by the launch of

the iPad2. Going forward, TBR believes Apple will sustain strong margin and cash growth, fueled by product line

updates.

1Q11 Average = 7.7% 1Q11 Standard Deviation = 7.8%

Page 45: TBR 1Q11 End-of-Quarter Benchmark Report

TBR

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Favorable year-to-year compares will continue to boost AMD’s net revenue growth and ROE in 2Q11

Financial Metrics: Return on Equity

RANKING TBR SCORE COMPANY TOP 3 COMPANIES

1 6.95 AMD

2 6.69 IBM

3 5.68 DELL

4 5.39 APPLE

5 5.05 TOSHIBA

6 4.88 INTEL

7 4.76 ORACLE/SUN

8 4.71 HP

9 4.57 NETAPP

10 4.47 HDS

11 4.44 LENOVO

12 4.26 ACER

13 4.24 EMC

14 4.04 FUJITSU

15 3.32 SONY

16 3.18 PANASONIC

TBR

73.6%

67.6%

44.5%

37.8%

29.9%

26.0%

23.4%

22.1%

19.1%

16.6%

16.1%

11.9%

11.5%

6.8%

-9.8%

-13.0%

-15.0% -5.0% 5.0% 15.0% 25.0% 35.0% 45.0% 55.0% 65.0% 75.0%

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RETURN ON EQUITY

1Q11

4Q10

AVERAGE

Top Ranking AnalysisAMD surpassed IBM to post the

highest ROE compared to CBQ peers in 1Q11. AMD's net income grew 98.4% year-to-year $510 million,

enabling AMD to capitalize on IBM's steadily declining ROE metric.TBR

believes AMD will maintain a compeittive ROE metric in 2Q11,

benefitting from the effects of favorable year-to-year compares.

1Q11 Average = 24% 1Q11 Standard Deviation = 23.5%

Page 46: TBR 1Q11 End-of-Quarter Benchmark Report

TBR

June 2011 TBR CBQ End-of-Quarter Benchmark Report | 1Q11 ©2011 Technology Business Research, Inc.46

RANKING TBR SCORE COMPANY TOP 3 COMPANIES

1 7.61 ACER

2 7.51 APPLE

3 7.32 LENOVO

4 6.75 DELL

5 6.69 HP

6 6.31 TOSHIBA

7 5.62 FUJITSU

8 4.68 INTEL

9 4.52 IBM

10 3.69 SONY

11 3.48 HDS

12 3.24 AMD

13 2.51 EMC

14 2.48 PANASONIC

15 2.06 ORACLE/SUN

16 1.62 NETAPP

TBR

8.8%

9.5%

10.9%

14.8%

15.2%

17.8%

22.6%

29.0%

30.1%

35.8%

37.3%

38.9%

43.9%

44.2%

47.0%

50.1%

0.0% 20.0% 40.0% 60.0%

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TOTAL OPERATING EXPENSE AS A % OF REVENUE

1Q11

4Q10

AVERAGE

1Q11 Average = 28.5% 1Q11 Standard Deviation = 14.4%

Appendix: Total OPEX

Page 47: TBR 1Q11 End-of-Quarter Benchmark Report

TBR

June 2011 TBR CBQ End-of-Quarter Benchmark Report | 1Q11 ©2011 Technology Business Research, Inc.47

Appendix: Net Margin

RANKING TBR SCORE COMPANY TOP 3 COMPANIES

1 9.57 AMD

2 8.25 INTEL

3 8.19 APPLE

4 5.81 IBM

5 5.74 NETAPP

6 5.57 EMC

7 5.28 HDS

8 5.00 HP

9 4.81 DELL

10 4.68 TOSHIBA

11 4.05 ORACLE/SUN

12 3.91 FUJITSU

13 3.80 ACER

14 3.79 LENOVO

15 0.00 SONY

16 0.00 PANASONIC

TBR

31.6%24.6%

24.3%

11.6%

11.2%

10.4%

8.8%

7.3%

6.3%

5.6%

2.3%

1.5%

0.9%

0.9%

-21.6%

-24.6%

-30.0% -20.0% -10.0% 0.0% 10.0% 20.0% 30.0% 40.0%

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NET MARGIN

1Q11

4Q10

AVERAGE

1Q11 Average = 6.3% 1Q11 Standard Deviation = 14.6%

Page 48: TBR 1Q11 End-of-Quarter Benchmark Report

TBR

June 2011 TBR CBQ End-of-Quarter Benchmark Report | 1Q11 ©2011 Technology Business Research, Inc.48

RANKING TBR SCORE COMPANY TOP 3 COMPANIES

1 10.00 APPLE

2 8.46 INTEL

3 6.30 DELL

4 6.16 LENOVO

5 5.23 NETAPP

6 5.03 EMC

7 4.14 HDS

8 4.05 ORACLE/SUN

9 3.92 IBM

10 3.76 FUJITSU

11 3.74 HP

12 3.12 SONY

13 2.97 PANASONIC

14 2.86 TOSHIBA

15 2.57 AMD

16 2.40 ACER

TBR

81.7%

61.4%

36.4%

34.7%

24.0%

21.7%

11.3%

10.4%

8.8%

6.9%

6.8%

-0.4%

-2.1%

-3.4%

-6.7%

-8.7%

-20.0% 0.0% 20.0% 40.0% 60.0% 80.0% 100.0%

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ATAGROSS PROFIT YEAR-TO-YEAR CHANGE

1Q11

4Q10

AVERAGE

1Q11 Average = 17.7% 1Q11 Standard Deviation = 25.2%

Appendix: Gross Profit YTY

Page 49: TBR 1Q11 End-of-Quarter Benchmark Report

TBR

June 2011 TBR CBQ End-of-Quarter Benchmark Report | 1Q11 ©2011 Technology Business Research, Inc.49

RANKING TBR SCORE COMPANY TOP 3 COMPANIES

1 9.33 ORACLE/SUN

2 6.89 TOSHIBA

3 5.81 IBM

4 5.73 SONY

5 5.36 ACER

6 5.18 HP

7 5.10 DELL

8 4.81 FUJITSU

9 4.52 INTEL

10 4.40 EMC

11 4.35 AMD

12 4.13 HDS

13 3.98 NETAPP

14 3.06 LENOVO

15 2.11 APPLE

16 0.00 PANASONIC

TBR

-37.4%

-9.6%

2.6%

3.5%

7.7%

9.7%

10.7%

14.0%

17.2%

18.6%

19.2%

21.6%

23.4%

33.8%

44.5%

102.2%

-50.0% -25.0% 0.0% 25.0% 50.0% 75.0% 100.0% 125.0%

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SG&A YEAR-TO-YEAR CHANGE

1Q11

4Q10

AVERAGE

1Q11 Average = 17.6% 1Q11 Standard Deviation = 29%

Appendix: SG&A YTY

Page 50: TBR 1Q11 End-of-Quarter Benchmark Report

TBR

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RANKING TBR SCORE COMPANY

TOP 3 COMPANIES

1 8.10 ORACLE/SUN

2 6.35 HDS

3 5.80 FUJITSU

4 5.80 IBM

5 5.43 SONY

6 5.26 PANASONIC

7 4.99 HP

8 4.91 AMD

9 4.72 EMC

10 4.58 DELL

11 4.47 TOSHIBA

12 3.98 INTEL

13 3.94 NETAPP

14 3.36 ACER

15 3.02 LENOVO

16 2.51 APPLE

TBR

-16.7%

0.0%

5.2%

5.2%

8.7%

10.3%

12.9%

13.6%

15.4%

16.8%

17.8%

22.5%

22.8%

28.3%

31.6%

36.4%

-20.0% 0.0% 20.0% 40.0% 60.0%SO

URCE: TBR AN

D CO

MPAN

Y DATA

R&D EXPENSE YEAR-TO-YEAR CHANGE

1Q11

4Q10

AVERAGE

1Q11 Average = 14.4% 1Q11 Standard Deviation = 13%

Appendix: R&D YTY

Page 51: TBR 1Q11 End-of-Quarter Benchmark Report

TBR

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RANKING TBR SCORE COMPANY TOP 3 COMPANIES

1 8.28 ORACLE/SUN

2 6.40 TOSHIBA

3 5.68 IBM

4 5.12 ACER

5 5.07 HP

6 4.79 APPLE

7 4.79 DELL

8 4.73 SONY

9 4.72 FUJITSU

10 4.26 AMD

11 4.02 EMC

12 3.95 HDS

13 3.70 INTEL

14 3.33 NETAPP

15 3.03 LENOVO

16 0.00 PANASONIC

TBR

-20.1%

-3.3%

3.2%

8.2%

8.6%

11.1%

11.2%

11.7%

11.8%

15.9%

18.1%

18.7%

21.0%

24.3%

27.0%

81.0%

-30.0% 0.0% 30.0% 60.0% 90.0%SO

URCE: TBR AN

D CO

MPAN

Y DATA

TOTAL OPERATING EXPENSE YEAR-TO-YEAR CHANGE

1Q11

4Q10

AVERAGE

1Q11 Average = 15.5% 1Q11 Standard Deviation = 20.8%

Appendix: OPEX YTY

Page 52: TBR 1Q11 End-of-Quarter Benchmark Report

TBR

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RANKING TBR SCORE COMPANY TOP 3 COMPANIES

1 4.88 ORACLE/SUN

2 4.85 LENOVO

3 4.83 DELL

4 4.78 HDS

5 4.78 APPLE

6 4.69 EMC

7 4.68 NETAPP

8 4.67 IBM

9 4.67 INTEL

10 4.65 HP

11 4.64 TOSHIBA

12 4.63 FUJITSU

13 4.60 SONY

14 4.57 ACER

15 4.55 AMD

16 3.63 PANASONIC

TBR

176.4%

152.0%

133.5%

101.8%

97.9%

33.8%

23.1%

21.5%

20.6%

3.8%

-3.6%

-10.5%

-36.2%

-52.2%

-70.3%-754.4%

-800.0% -600.0% -400.0% -200.0% 0.0% 200.0% 400.0% 600.0% 800.0%

SOU

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ATA

OPERATING INCOME YEAR-TO-YEAR CHANGE

1Q11

4Q10

AVERAGE

1Q11 Average = -10.2% 1Q11 Standard Deviation = 211.5%

Appendix: Operating Income YTY

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RANKING TBR SCORE COMPANY TOP 3 COMPANIES

1 4.83 LENOVO

2 4.80 DELL

3 4.78 HDS

4 4.78 ORACLE/SUN

5 4.77 TOSHIBA

6 4.77 AMD

7 4.76 APPLE

8 4.73 INTEL

9 4.73 EMC

10 4.72 NETAPP

11 4.72 IBM

12 4.72 HP

13 4.69 FUJITSU

14 4.69 ACER

15 4.66 SONY

16 4.50 PANASONIC

TBR

233.4%

177.1%

132.5%

122.1%

114.8%

98.4%

94.8%

29.4%

28.0%

10.7%

10.1%

4.7%

-59.9%

-60.9%

-109.3%-447.5%

-500.0% -400.0% -300.0% -200.0% -100.0% 0.0% 100.0% 200.0% 300.0% 400.0%

SOU

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ATA

NET INCOME YEAR-TO-YEAR CHANGE

1Q11

4Q10

AVERAGE

1Q11 Average = 23.7% 1Q11 Standard Deviation = 155.5%

Appendix: Net Income YTY

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RANKING TBR SCORE COMPANY TOP 3 COMPANIES

1 6.66 INTEL

2 6.65 ORACLE/SUN

3 6.62 APPLE

4 6.48 ACER

5 6.39 LENOVO

6 6.08 AMD

7 6.05 HP

8 5.70 SONY

9 5.69 TOSHIBA

10 5.17 DELL

11 4.89 FUJITSU

12 3.75 IBM

13 2.11 HDS

14 1.89 PANASONIC

15 1.08 EMC

16 1.02 NETAPP

TBR

$0.03

$0.03

$0.03

$0.03

$0.04

$0.05

$0.05

$0.06

$0.06

$0.08

$0.09

$0.13

$0.18

$0.19

$0.22

$0.22

$0.00 $0.02 $0.04 $0.06 $0.08 $0.10 $0.12 $0.14 $0.16 $0.18 $0.20 $0.22 $0.24

SOU

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ATA

COST PER REVENUE DOLLAR

1Q11

4Q10

AVERAGE

1Q11 Average = $0.09 1Q11 Standard Deviation = $0.07

Appendix: Cost per Revenue Dollar

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RANKING TBR SCORE COMPANY TOP 3 COMPANIES

1 8.00 INTEL

2 7.91 ORACLE/SUN

3 7.63 APPLE

4 6.99 AMD

5 5.67 HP

6 5.63 SONY

7 4.66 TOSHIBA

8 4.24 IBM

9 4.17 LENOVO

10 3.76 FUJITSU

11 3.75 ACER

12 3.42 NETAPP

13 3.39 DELL

14 2.90 EMC

15 2.77 HDS

16 0.00 PANASONIC

TBR

$0.04

$0.05

$0.07

$0.11

$0.19

$0.26

$0.20

$0.29

$0.29

$0.32

$0.32

$0.34

$0.34

$0.37

$0.38

$0.72

$0.00 $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 $0.70 $0.80

SOU

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ATA

COST PER MARGIN DOLLAR

1Q11

4Q10

AVERAGE

1Q11 Average = $0.27 1Q11 Standard Deviation = $0.17

Appendix: Cost per Margin Dollar

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RANKING TBR SCORE COMPANY TOP 3 COMPANIES

1 7.15 EMC

2 7.03 INTEL

3 6.74 AMD

4 6.69 DELL

5 6.45 NETAPP

6 5.77 PANASONIC

7 5.28 IBM

8 5.26 HP

9 5.19 SONY

10 5.17 FUJITSU

11 5.01 APPLE

12 4.13 TOSHIBA

13 4.04 HDS

14 3.82 LENOVO

15 2.82 ACER

16 0.00 ORACLE/SUN

TBR

1.7%

2.8%

5.4%

5.9%

8.1%

14.3%

18.7%

18.9%

19.5%

19.8%

21.2%

29.2%

30.0%

32.0%

41.1%

80.0%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0%

SOU

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ATACHANNEL EXPENSE AS A % OF SALES & MARKETING EXPENSE

1Q11

4Q10

AVERAGE

1Q11 Average = 21.8% 1Q11 Standard Deviation = 19.2%

Appendix: Channel Expense

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Appendix: Marketing Expense

RANKING TBR SCORE COMPANY TOP 3 COMPANIES

1 7.69 EMC

2 7.07 ORACLE/SUN

3 6.83 HDS

4 6.40 PANASONIC

5 6.40 ACER

6 6.00 FUJITSU

7 5.84 IBM

8 5.60 HP

9 5.60 TOSHIBA

10 5.59 DELL

11 5.58 NETAPP

12 4.86 SONY

13 3.67 LENOVO

14 3.02 AMD

15 2.74 APPLE

16 0.02 INTEL

TBR

2.3%

7.8%

9.9%

13.7%

13.7%

17.2%

18.6%

20.7%

20.8%

20.9%

20.9%

27.3%

37.8%

43.6%

46.0%70.0%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0%

SOU

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ATA

MARKETING EXPENSE AS A % OF SALES & MARKETING EXPENSE

1Q11

4Q10

AVERAGE

1Q11 Average = 24.5% 1Q11 Standard Deviation = 17.2%

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Appendix: Marketing Expense per Employee

RANKING TBR SCORE COMPANY TOP 3 COMPANIES

1 7.40 PANASONIC

2 7.01 APPLE

3 7.01 ORACLE/SUN

4 6.73 TOSHIBA

5 6.02 FUJITSU

6 6.21 SONY

7 5.65 EMC

8 5.48 HDS

9 5.21 DELL

10 4.47 HP

11 4.25 ACER

12 4.19 AMD

13 3.92 LENOVO

14 2.50 IBM

15 1.76 NETAPP

16 0.57 INTEL

TBR

$114.23

$143.48

$143.75

$164.02

$217.19

$202.79

$244.62

$256.90

$277.32

$332.11

$348.32

$353.14

$372.56

$478.32

$533.48

$621.37

$0.00 $100.00 $200.00 $300.00 $400.00 $500.00 $600.00 $700.00

SOU

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ATAANNUAL MKTG. EXPENSE PER MKTG. EMPLOYEE (IN $ THOUSANDS)

1Q11

4Q10

AVERAGE

1Q11 Average = $300,225 1Q11 Standard Deviation = $147,129

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RANKING TBR SCORE COMPANY TOP 3 COMPANIES

1 8.25 APPLE

2 7.79 INTEL

3 7.73 LENOVO

4 5.71 IBM

5 5.32 AMD

6 5.24 PANASONIC

7 5.10 ORACLE/SUN

8 5.06 EMC

9 5.02 NETAPP

10 4.94 SONY

11 4.25 HP

12 3.82 DELL

13 3.55 TOSHIBA

14 3.18 FUJITSU

15 2.08 HDS

16 1.22 ACER

TBR

21.15

24.81

25.25

41.30

44.47

45.11

46.20

46.47

46.79

47.49

52.98

56.34

58.52

61.45

70.25

77.09

0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00 90.00

SOU

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ATA

DAYS SALES OUTSTANDING

1Q11

4Q10

AVERAGE

1Q11 Average = 47.86 1Q11 Standard Deviation = 15.44

Appendix: Days Sales Outstanding

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Appendix: Turns on Inventory

RANKING TBR SCORE COMPANY TOP 3 COMPANIES

1 10.00 APPLE

2 7.74 IBM

3 7.35 DELL

4 6.05 ORACLE/SUN

5 5.43 LENOVO

6 5.41 NETAPP

7 4.54 HP

8 4.49 FUJITSU

9 4.24 ACER

10 3.84 EMC

11 3.70 TOSHIBA

12 3.60 PANASONIC

13 3.49 SONY

14 3.48 AMD

15 3.46 HDS

16 3.43 INTEL

TBR

63.69

39.38

36.32

26.00

21.12

21.01

14.11

13.74

11.78

8.59

7.45

6.69

6.14

5.76

5.56

5.01

0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00

SOU

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ATATURNS ON INVENTORY

1Q11

4Q10

AVERAGE

1Q11 Average = 18.27 1Q11 Standard Deviation = 16.28

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Appendix: Days Inventory Outstanding

RANKING TBR SCORE COMPANY TOP 3 COMPANIES

1 7.54 APPLE

2 7.25 IBM

3 7.19 DELL

4 6.86 ORACLE/SUN

5 6.59 LENOVO

6 6.59 NETAPP

7 5.89 HP

8 5.83 FUJITSU

9 5.52 ACER

10 4.52 EMC

11 3.99 TOSHIBA

12 3.41 PANASONIC

13 3.06 SONY

14 2.81 AMD

15 2.62 HDS

16 2.19 INTEL

TBR

5.73

9.27

10.05

14.04

17.29

17.37

25.86

26.57

30.36

42.49

48.99

56.02

59.43

63.34

65.59

72.85

0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00 90.00

SOU

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ATA

DAYS INVENTORY OUTSTANDING

1Q11

4Q10

AVERAGE

1Q11 Average = 35.33 1Q11 Standard Deviation = 22.86

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RANKING TBR SCORE COMPANY TOP 3 COMPANIES

1 10.00 LENOVO

2 9.40 ACER

3 5.95 DELL

4 4.87 APPLE

5 4.55 ORACLE/SUN

6 4.45 HP

7 4.34 AMD

8 4.20 TOSHIBA

9 4.17 EMC

9 4.17 IBM

11 4.15 SONY

12 3.99 HDS

13 3.95 PANASONIC

14 3.92 FUJITSU

15 3.83 INTEL

16 3.79 NETAPP

TBR

91.90

75.07

30.23

16.30

12.16

10.78

9.38

7.65

7.24

7.18

6.90

4.82

4.33

4.03

2.74

2.26

0.00 20.00 40.00 60.00 80.00 100.00 120.00SO

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D CO

MPAN

Y DATA

FIXED ASSET TURNOVER

1Q11

4Q10

AVERAGE

2Q10 Average

1Q11 Average = 18.31 1Q11 Standard Deviation = 26.5

Appendix: Fixed Asset Turnover

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Appendix: Days Cash Outstanding

RANKING TBR SCORE COMPANY TOP 3 COMPANIES

1 6.85 TOSHIBA

2 6.68 HDS

3 6.33 FUJITSU

4 6.31 ACER

5 6.31 HP

6 6.07 PANASONIC

7 5.89 INTEL

8 5.85 LENOVO

9 5.26 EMC

10 5.18 IBM

11 5.10 DELL

12 4.90 SONY

13 4.85 AMD

14 4.63 APPLE

15 1.20 ORACLE/SUN

16 0.00 NETAPP

TBR

13.47

20.44

35.27

36.04

36.24

46.11

54.11

55.27

80.13

83.55

86.78

94.54

97.37

106.66

250.00

326.07

0 50 100 150 200 250 300 350

SOU

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COM

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ATADAYS CASH OUTSTANDING

1Q11

4Q10

AVERAGE

1Q11 Average = 88.88 1Q11 Standard Deviation = 83.95

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Appendix: Total Asset Turnover

RANKING TBR SCORE COMPANY TOP 3 COMPANIES

1 8.15 ACER

2 7.66 LENOVO

3 7.36 FUJITSU

4 6.54 DELL

5 5.64 TOSHIBA

6 5.55 AMD

7 4.93 HDS

8 4.80 APPLE

9 4.62 PANASONIC

10 4.58 HP

11 3.90 IBM

12 3.64 INTEL

13 3.22 NETAPP

14 2.77 EMC

15 2.46 ORACLE/SUN

16 2.30 SONY

TBR

1.90

1.78

1.71

1.51

1.29

1.27

1.12

1.09

1.04

1.03

0.87

0.80

0.70

0.59

0.52

0.49

0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 2.00 2.20 2.40

SOU

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ATA

TOTAL ASSET TURNOVER

1Q11

4Q10

AVERAGE

1Q11 Average = 1.11 1Q11 Standard Deviation = 0.45

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RANKING TBR SCORE COMPANY TOP 3 COMPANIES

1 8.84 INTEL

2 8.64 APPLE

3 7.14 EMC

4 6.72 ORACLE/SUN

5 5.72 NETAPP

6 5.31 HDS

7 4.92 PANASONIC

8 4.89 DELL

9 4.76 ACER

10 4.48 HP

11 4.11 AMD

12 3.82 FUJITSU

13 3.28 TOSHIBA

14 3.08 IBM

15 3.05 SONY

16 2.77 LENOVO

TBR

0.25

0.27

0.41

0.45

0.55

0.59

0.62

0.63

0.64

0.67

0.70

0.73

0.78

0.80

0.80

0.83

0.00 0.10 0.20 0.30 0.40 0.50 0.60 0.70 0.80 0.90

SOU

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ATA

DEBT/ASSET RATIO

1Q11

4Q10

AVERAGE

1Q11 Average = 0.61 1Q11 Standard Deviation = 0.18

Appendix: Debt/Asset Ratio

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RANKING TBR SCORE COMPANY TOP 3 COMPANIES

1 8.80 ORACLE/SUN

2 7.63 AMD

3 6.12 INTEL

4 6.01 APPLE

5 5.90 NETAPP

6 4.92 DELL

7 4.59 ACER

8 3.92 PANASONIC

9 3.84 HDS

10 3.78 IBM

11 3.75 FUJITSU

12 3.61 TOSHIBA

13 3.53 HP

14 3.51 EMC

15 3.22 LENOVO

16 3.05 SONY

TBR

2.88

2.48

1.97

1.93

1.90

1.56

1.45

1.23

1.20

1.18

1.17

1.12

1.09

1.09

0.99

0.93

0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50

SOU

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ATA

CURRENT RATIO

1Q11

4Q10

AVERAGE

1Q11 Average = 1.51 1Q11 Standard Deviation = 0.57

Appendix: Current Ratio

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Appendix: PC

RANKING REVENUE COMPANY TOP 3 COMPANIES

1 $8,720 HP

2 $7,452 DELL

3 $4,976 APPLE

4 $4,552 LENOVO

5 $3,554 ACER

6 $2,349 TOSHIBA

7 $1,634 SONY

8 $254 PANASONIC

TBR

$8,720

$7,452

$4,976

$4,552

$3,554

$2,349

$1,634

$254

$0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000SO

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D CO

MPAN

Y DATA

PC REVENUE (IN $ MILLIONS)

1Q114Q10AVERAGE

1Q11 Average = $4,187 1Q11 Standard Deviation = $2,872

RANKINGOPERATING

INCOME COMPANY

TOP 3 COMPANIES

1 $592 APPLE

2 $455 HP

3 $230 DELL

4 $85 SONY

5 $66 ACER

6 $46 TOSHIBA

7 $15 LENOVO

8 $1 PANASONIC

TBR

$592

$455

$230

$85

$66

$46

$15

$1

-$40 $60 $160 $260 $360 $460 $560 $660

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PC OPERATING INCOME (IN $ MILLIONS)

1Q11

4Q10

AVERAGE

1Q11 Average = $186 1Q11 Standard Deviation = $222

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Appendix: Proprietary Server

RANKING REVENUE COMPANY

TOP 3 COMPANIES

1 $1,755 IBM

2 $980 HP

3 $374 ORACLE/SUN

TBR

$1,755

$980

$374

$0 $500 $1,000 $1,500 $2,000 $2,500 $3,000

SOU

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DATA

PROPRIETARY SERVER REVENUE (IN $ MILLIONS)

1Q11 4Q10 AVERAGE

1Q11 Average = $1,036 1Q11 Standard Deviation = $692

RANKINGOPERATING

INCOME COMPANY

TOP 3 COMPANIES

1 $87 HP

2 $32 ORACLE/SUN

3 -$118 IBM

TBR

$87

$32

$0 $100 $200 $300 $400 $500 $600 $700

SOU

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DATA

PROPRIETARY SERVER OPERATING INCOME (IN $ MILLIONS)

1Q114Q10AVERAGE

1Q11 Average = $0 1Q11 Standard Deviation = $106

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Appendix: x86 Server

RANKING REVENUE COMPANY TOP 3 COMPANIES

1 $3,387 HP

2 $1,973 DELL

3 $950 IBM

4 $46 ORACLE/SUN

5 $20 ACER

TBR

$3,387

$1,973

$950

$46

$20

$0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000

SOU

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CO

MPAN

Y DATA

x86 SERVER REVENUE (IN $ MILLIONS)

1Q11

4Q10

AVERAGE

1Q11 Average = $1,275 1Q11 Standard Deviation = $1,426

RANKINGOPERATING

INCOME COMPANY TOP 3 COMPANIES

1 $463 HP

2 $291 DELL

3 $77 IBM

4 $0 ORACLE/SUN

5 -$1 ACER

TBR

$463

$291

$77

$0

-$1

-$10 $90 $190 $290 $390 $490 $590 $690 SOU

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ATA

x86 SERVER OPERATING INCOME (IN $ MILLIONS)

1Q11

4Q10

AVERAGE

1Q11 Average = $166 1Q11 Standard Deviation = $204

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Appendix: Storage

RANKING REVENUE COMPANY TOP 3 COMPANIES

1 $1,815 EMC

2 $1,057 HDS

3 $961 NETAPP

4 $744 IBM

5 $980 HP

6 $481 DELL

7 $291 ORACLE/SUN

TBR

$1,815

$1,057

$980

$961

$744

$481

$291

$0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 $2,000

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ATA

STORAGE REVENUE (IN $ MILLIONS)

1Q11

4Q10

AVERAGE

1Q11 Average = $904 1Q11 Standard Deviation = $490

RANKINGOPERATING

INCOME COMPANY TOP 3 COMPANIES

1 $131 IBM

2 $225 EMC

3 $121 NETAPP

4 $113 HDS

5 $70 HP

6 $56 DELL

7 $12 ORACLE/SUN

TBR

$225

$131

$121

$113

$70

$56

$12

$0 $50 $100 $150 $200 $250 $300 $350

SOU

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ATA

STORAGE OPERATING INCOME (IN $ MILLIONS)

1Q11

4Q10

AVERAGE

1Q11 Average = $104 1Q11 Standard Deviation = $68

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Appendix: Microelectronics

RANKING REVENUE COMPANY TOP 3 COMPANIES

1 $12,847 INTEL

2 $3,565 TOSHIBA

3 $1,613 AMD

4 $982 SONY

5 $482 IBM

TBR

$12,847

$3,565

$1,613

$982

$482

$0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000

SOU

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ATA

MICROELECTRONICS REVENUE (IN $ MILLIONS)

1Q11

4Q10

AVERAGE

1Q11 Average = $3,898 1Q11 Standard Deviation = $5,138

RANKINGOPERATING

INCOME COMPANY TOP 3 COMPANIES

1 $4,158 INTEL

2 $412 TOSHIBA

3 $184 SONY

4 $54 AMD

5 -$50 IBM

TBR

$4,158

$412

$184

$54

-$50

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1-$200 $300 $800 $1,300 $1,800 $2,300 $2,800 $3,300 $3,800 $4,300 $4,800 SO

URCE: TBR AN

D CO

MPAN

Y DATA

MICROELECTRONICS OPERATING INCOME (IN $ MILLIONS)

1Q11

4Q10

AVERAGE

1Q11 Average = $952 1Q11 Standard Deviation = $1,801

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Financial Model Strategy Metrics

As a % of Revenue

Gross Margin

SG&A

Sales & Marketing

General & Administrative

R&D

Total Operating Expenses

Operating Margin

Net Margin

Revenue

Year-to-Year Change

Revenue

Gross Profit

SG&A

Sales & Marketing

General & Administrative

R&D

Total Operating Expenses

Operating Income

Net Income

Revenue is scored based on total revenue generated by the company.

• Higher profit margins yield a higher CBQ benchmark score, with operating margin receiving the highest weight, as it demonstrates a company’s ability to create and bring its products to market.

• Gross margin receives the second-highest weighting, as improvements in the gross margin line demonstrate higher contribution margins by the company.

• Net margin receives a lower weighting than other margins, as there are more external factors outside the control of management that do not necessarily reflect the operations of the company’s primary business activities (such as taxes or investment gains/losses).

• Lower SG&A, Sales & Marketing, General & Administrative, R&D and Total Operating Expenses yield a higher CBQ benchmark score, as these indicate lower costs incurred and higher profit generation.

• Year-to-year change in revenue, gross profit, operating income and net income yield higher CBQ Benchmark scores.

• Lower growth rates for SG&A, Sales & Marketing, General & Administrative, R&D and Total Operating Expenses generate a higher CBQ Benchmark score.

Appendix: CBQ Taxonomy

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Go-to-Market & Product Strategies Metrics

Annual Revenue per SalespersonHigher revenue per salesperson yields a higher CBQ Benchmark score, as it indicates the revenue-generating capabilities of the company’s sales force.

Cost per Revenue Dollar

Cost per Margin Dollar

Channel Expense as a % of Revenue

Marketing Expense as a % of Revenue

Annual Sales Expense per Sales Employee

Annual Sales & Marketing Expense per Sales & Marketing Employee

Cost per Revenue Dollar reflects the additional cost incurred to generate an additional dollar of revenue.

Cost per Margin Dollar reflects the additional cost incurred to generate an additional dollar of gross profit.

• Channel Expense as a % of Revenue reflects the costs a company incurs to manage its channel programs for bringing products and services to market, based on TBR’s modeled channel expenses.

• Marketing Expense as a % of Revenue reflects the marketing costs the company has incurred, including marketing headcount costs, advertising and program expenses. The metric is based on TBR’s modeled marketing costs and advertising costs (advertising is commonly reported by most companies).

Annual Sales Expense per Sales Employee is based on TBR’s modeled sales expense and sales headcount and includes direct and indirect sales staff and sales support.

Annual Sales & Marketing Expense per Sales & Marketing Employee is based on TBR’s modeled sales and marketing expense and headcount and includes direct and indirect sales staff, sales support and marketing expense.

Appendix: CBQ Taxonomy

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Days Sales OutstandingDays Inventory OutstandingDays Cash OutstandingDebt/Asset Ratio

Lower Days Sales, Days Inventory, Days Cash and Debt/Asset ratios yield a higher CBQ Benchmark score, as:

• Lower Days Sales Outstanding indicates a faster collection process, giving the company the ability to generate cash from operations and reinvest it in the business;

• Lower Days Inventory Outstanding indicates the company is turning over product and not maintaining a high inventory balance, in turn incurring higher inventory carrying costs;

• Lower Cash Outstanding indicates a company is potentially using its cash to fund R&D, mergers & acquisitions, returns to investors, etc. versus maintaining a large cash balance on its balance sheet;

• Lower Debt/Asset Ratio indicates the company’s reliance on using debt for financing the business. Less debt is considered favorable for the CBQ Benchmark scoring as it indicates a company’s ability to self-fund operations, financing and investing activities. It will also result in lower operating costs, as higher debt results in higher interest payments.

Turns on InventoryFixed Asset TurnoverTotal Asset TurnoverCurrent RatioReturn on AssetsReturn on Equity

Higher Turns on Inventory, Fixed Asset Turnover, Total Asset Turnover, Current Ratio, Return on Assets and Return on Equity result in higher CBQ Benchmark scores, as:

• Higher Turns on Inventory indicate greater demand for a company’s products and potential lower inventory carrying costs;

• Higher Fixed and Total Asset Turnovers indicate more efficient use of a company’s assets in generating revenue;

• Higher Current Ratio indicates a company’s liquidity and ability to pay its current debts with its current assets;

• Higher Return on Assets and Return on Equity indicate a company’s profitability and ability to return value to shareholders.

Appendix: CBQ Taxonomy

Resource Management Strategy Metrics

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Resource Management Strategy Metrics

Lower year-to-year Headcount Growth is considered favorable for CBQ Benchmark scoring, as TBR believes lower headcount growth reflects lower increases in a company’s total expenses.

Annual Revenue per Employee

Annual G&A Expense per G&A Employee

Annual R&D Expense per Developer

Headcount Growth, year-to-year

Higher Annual Revenue per Employee yields a higher CBQ Benchmark score, as the metric reflects the revenue-generating ability of the company’s employees versus other companies in the CBQ Benchmark.

• Lower Annual G&A Expense per G&A Employee results in a higher CBQ Benchmark score, as a lower metric indicates lower costs for the company, as modeled by TBR.

• Lower R&D Expense per Developer reflects lower costs per R&D employee and generates a higher CBQ Benchmark score.

Appendix: CBQ Taxonomy

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Revenue & Operating Income by IT Segment for CBQ-covered Companies

The CBQ Benchmark ranks the companies in our five primary IT Hardware segments, which we model from highest to lowest in revenue and operating income.

PC, Proprietary Servers, x86 Servers, Storage and Microelectronics Revenue and Operating Income

Appendix: CBQ Taxonomy

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TBR Consulting Capabilities

Customer Views Market Views Company Views Vendor Deep-dives LOB Deep-dives Geo Deep-dives

Satisfaction and drivers Landscape Analysis Financial Analysis Financial drill-downs, COS, Labor versus Non-labor, SG&A, G&A, OPEX,

CAPEX, R&D, Salary & benefits, Offshore versus Onshore …

Deal Analysis Industry Analysis Strategies & trends Strategy analysis, Portfolio, Asset, LOB, GEO, Vertical, GTM, Client, Delivery, Pricing, Channel, Marketing/Messaging/Value …

Opportunity Analysis Geo Analysis Structures &

resourcesAcquisitions, Asset Drill-downs, Locations, Space, Products, Equipment, IP/Patents, Software/Tools …

Emerging trends Segment Analysis Business models Structure, Organization, Sales Coverage, Contracts, Deals, Span of Control, Pricing …

Appendix: TBR Capabilities

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