TBR 4Q10 End-of-Quarter Benchmark Report

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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 youve 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 Fourth Quarter 2010 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.


<ul><li> 1. Technology Business ResearchAccelerating Customer Success Through Business Research TBR T E C H N O L O G Y B U S I N E S S R ES E AR C H , I N C . </li> <li> 2. COMPUTER BUSINESS QUARTERLYSMEnd-of-Quarter Benchmark Report Fourth Calendar Quarter 2010Publish Date: April 6, 2011Authors: Ezra Gottheil, Greg Richardson, Krista Macomber,Cassandra Mooshian and Emily Searles Analysts, ComputingContent Editor: John Spooner (john.spooner@tbri.com),Director, Computing TBR T E C H N O L O G Y B U S I N E S S R ES E AR C H , I N C . </li> <li> 3. Content TBRExecutive Summary Segment Views 3 Key Findings &amp; Trends 10-12 PC 4-5 Drill-Downs 13-15 X86 Server Segment 16-18 Proprietary Server Geographic 19-21 Storage 6 Market Overview 22-24 Microelectronics 7 Market Leaders Geographic Views 8-9 Quarterly Focus 25-27 Americas IT vendors will differentiate products 28-30 EMEA with cross-platform operating systems 31-33 Asia Pacific and apps, pushing customer adoption 34-44 CBQ Financial Metrics and high-margin sales. Appendix 45-70 Additional Metrics IT vendors compete aggressively for 71-75 CBQ Taxonomy share in emerging Chinese cities, 76 TBR Capabilities targeting the regions next growth frontiers.3 April 2011 TBR CBQ End-of-Quarter Benchmark Report | 4Q10 2011 Technology Business Research, Inc. </li> <li> 4. Executive Summary TBRMobile devices will lay a foundation for client and infrastructuresystems growth through 2011Demand for The emergence of new mobile devices including tablets will open doors to growthincreased opportunities for device and infrastructure companies in 2011.connectivity will PC vendors will augment their portfolios with consumer and commercial mobile devicesdrive growth in to meet short-term demand and create longer-term upselling and cross-sellingmobile devices and opportunities.the infrastructure to Server and storage vendors will benefit from the flood of new devices working their waysupport them on to networks, creating new demand for infrastructure to support the increased traffic. As end-users increasingly push for personal data and apps on demand, TBR believesVendors will interoperability across the entire portfolio will be key to product differentiation andincreasingly leverage driving sales.new operating A standardized operating system such as HP webOS, Apple iOS and Google Android acrosssystems and app the portfolio enables access to users content from any device, addressing this customerstores to differentiate requirement and providing for high-margin cross-selling opportunities.devices In coming quarters, TBR anticipates vendors that do not embrace this trend will be challenged to drive unit and profit growth. PC vendors are setting their growth sights on Western China, as companies jockey forVendors are targeting position to deliver multiple devices to a consumer market the industry deems under-expansion in Western penetrated.China to cultivate Vendors are leveraging both portfolio and go-to-market changes, such as Acersnew growth partnership with Founder, in addition to new investments in local facilities, including theopportunities establishment of Dell operations centers in Chengdu, to generate a strong feet-on-the- street presence.4 April 2011 TBR CBQ End-of-Quarter Benchmark Report | 4Q10 2011 Technology Business Research, Inc. </li> <li> 5. Executive Summary TBRHardware vendors are supporting profitability by utilizing acquisitionsand alliances to expand their software and services capabilities Top LOB Key Changes &amp; Drivers Top Rev. Keep on the Radar Growth The combination of a corporate refresh with HP We expect PC vendors will continue holiday consumer spending drove revenue for Apple to benefit from corporate refresh, PC PC vendors, while they shifted their focus to $11.5 while some will struggle to stay 22.0% mobile device offerings, such as tablets. billion ahead of mobile trends. HP TBR expects vendors to manage Virtualization and corporate refresh drove HP attrition to the cloud by leveraging x86 Server sales of x86 servers in 4Q10. $3.4 solution-based offerings with x86 17.0% billion servers. Vendors pushed to associate increased ROI IBM Vendors will drive revenue growth by IBMProp Server with proprietary servers, driving sales and $2.4 complementing proprietary server countering the effects of x86 server migration. 32.9% capabilities with distributed systems. billion Vendors ramped up acquisitions while building EMC TBR expects the massive influx of out comprehensive portfolios that deliver NetApp unstructured data and drive to move Storage integrated solutions, capitalizing on customers $1.9 into virtual environments will 32.3% transitioning to the cloud. billion continue through 2011. TBR believes the March earthquake Mobile devices are driving strong demand for Intel in Japan, which resulted in Micro- IBM NAND flash memory, which suffered a drop in $11.5 production disruption for Toshiba,electronics supply after a power outage at Toshiba plant. 27.8% Fujitsu and Sony, will cause billion microelectronic shortages in 2011.5 April 2011 TBR CBQ End-of-Quarter Benchmark Report | 4Q10 2011 Technology Business Research, Inc. </li> <li> 6. Executive Summary TBREmerging markets will continue to lead growth entering 2011, asbusinesses build out IT infrastructures to growing network usage Top Geo Key Changes &amp; Drivers Top Rev. Keep on the Radar Growth United HP TBR anticipates resurging Vendors worked to increase marketing capabilities Apple consumer demand in 2011 States/ to drive consumer sales, augmenting the effects $14.2 57.3% will boost performance in the Americas of an enterprise IT refresh cycle. billion Americas. TBR believes stabilizing Vendors worked to expand their channel HP Apple economic conditions will presence, with a focus on the regions growth EMEA $12.3 drive increased customer markets, to grow revenue despite challenging 49.2% billion spend and resulting revenue macroeconomic conditions. growth in EMEA. We expect healthy demand in CBQ companies targeted China as a key lever for Panasonic Apple emerging markets to offset growth in APAC in 4Q10, as the countrysAsia Pacific $21.2 the effects of Japans March expansive consumer market and comparatively 149.3% billion earthquake and drive APAC strong economy yield high customer demand. growth in coming quarters. TBR believes hardware Emerging markets such as the BRIC countries remained a key target for growth, vendors will work to deliver as vendors worked to expand channel partnerships and deliver new products infrastructure and need-Emerging and need-based solutions while increasing marketing capabilities to grow specific solutions to capitalizeMarkets brand awareness and drive sales. This is particularly evident in the SMB and on demand in emerging midmarket sectors, as customers strive to leverage IT to grow their businesses markets, helping drive overall amidst economic recovery. growth.6 April 2011 TBR CBQ End-of-Quarter Benchmark Report | 4Q10 2011 Technology Business Research, Inc. </li> <li> 7. Executive Summary TBRMobile PCs and virtualization drove consumer and commercial demandfor hardware, software and services, implying multifaceted growth 4Q10 REVENUE GROWTH VS. OPERATING MARGIN Consumer demand improved, TBR partly as a result of the holiday 80% season, boosting revenue for Apple vendors with strong offerings 60% catering to the market, such as Apple. Vendors, including Acer, Panasonic 40% saw continued weakening Revenue Growth NetApp demand in netbooks declining Lenovo EMC Avg. Revenue Growth revenue. 20% Toshiba Sony Dell HDS IBM...</li></ul>