PC Client shipments in free fall Q1.

[DAPUNISHER]

To summarize what I said above, there's more to TCO than just the resale values of components: time/hassle spent on upgrading/selling, OS licenses, the value of having a faster system.

For me, this is the salient point. The only real currency we possess is time, and we have precious little of it. The amount of time spent selling used parts, communicating with buyers, packing and shipping. Deal with one troll, or issue with the hardware and your time investment can be drastically increased too. Then there is the researching and ordering of parts, potentially having to fill out and mail rebates, install, testing, any number of potential variables requiring more time, in the upgrade or build process. And for what? Bleeding edge kit continuously in my PC case? No thanks.

Besides that, I have other hobbies that consume my time. If this were my major time sink then perhaps it would compensate me adequately. As is, not equitable for the time investment.

 

[scannall]

Why would Intel "let" AMD "have" anything? If they did that, shareholders would demand BK's head.

Depends. If ignoring AMD would cost less to their bottom line, then that's what they would most likely do. If AMD doubled their market share, it wouldn't be worth the cost to price dump.

 

[ShintaiDK]

In similar news, Apple announced they will take 3 more months with production cut of iPhones. First 3 months had a 30% reduction compared to the previous year.

http://asia.nikkei.com/Business/Companies/Apple-extends-iPhone-production-cut-for-another-quarter

 

[jpiniero]

Oh and now Intel is cutting at least a thousand jobs it looks.

http://www.oregonlive.com/silicon-forest/index.ssf/2016/04/intel_planning_for_thousands_o_1.html

 

[VirtualLarry]

Oh and now Intel is cutting at least a thousand jobs it looks.

http://www.oregonlive.com/silicon-forest/index.ssf/2016/04/intel_planning_for_thousands_o_1.html

I feel bad for those people. But that's what happens, when you no longer provide sufficient value for your customers.

Edit: Unless this is just pure corporate greed, and they are shipping those jobs off to China. *mad*

 

[Arachnotronic]

I feel bad for those people. But that's what happens, when you no longer provide sufficient value for your customers.

Edit: Unless this is just pure corporate greed, and they are shipping those jobs off to China. *mad*

The PC market isn't declining because Intel isn't "providing sufficient value to its customers." The vast majority of people who buy PCs do so because their old ones break/are no longer good enough.

The "enthusiast" crowd that you and many others claim Intel isn't doing a good job serving are driving record shipments after record shipments for Intel (in the form of "K" series SKUs) each quarter.

 

[VirtualLarry]

The PC market isn't declining because Intel isn't "providing sufficient value to its customers." The vast majority of people who buy PCs do so because their old ones break/are no longer good enough.

That's exactly what I'm talking about. With only a 5% improvement in performance, Y/Y, most Intel desktop CPU and system customers, only upgrade when their PC breaks. This is precisely my point - Intel no longer, and hasn't in quite some time, offered a "compelling value" to their customers, to get them to upgrade from their older systems, before they break down.

The "enthusiast" crowd that you and many others claim Intel isn't doing a good job serving are driving record shipments after record shipments for Intel (in the form of "K" series SKUs) each quarter.

They may be selling a greater mix of higher-end CPUs, due to enthusiasts, but are they selling more in absolute numbers? I didn't think so, the overall PC market is still declining.

I'm glad that enthusiasts are a bright spot in the PC market, but I don't think that the purchases from enthusiasts alone are enough to power the R&D that this market demands.

Which goes back to my first point - Intel just isn't offering the kind of value in their products that gets Joe Sixpack to upgrade, and those purchases are what funds the R&D and drives this industry.

Intel is failing. (To provide value.)

Edit: Intel's core counts in their mainstream CPU lines have stagnated, too, since 2008-2009 with the introduction of the Q6600. With Skylake offering 35W quad-cores, clearly, Intel has the TDP headroom to add at least two more cores to their mainstream CPUs, and still fit them into the standard desktop CPU TDP of 95-100W.

If Intel doesn't do this very soon, they are going to get their lunch eaten by a (hopefully-affordable) 8C/16T CPU in a 95W footprint at 14nm called "Zen".

Edit: And Kabylake, with essentially unchanged CPU cores from Skylake, will be even more underwhelming. Far less than 5% CPU improvement, and just with more hardware support for media codecs. Maybe that will make the 4K HTPC NUC more attractive, but for mainstream desktop users? A collective "yawn" was heard.

 

[pitz]

The SSD has been extremely disruptive. For years, Intel was able to sell themselves as the "core" of the computer, "the" component (CPU) that made everything go faster. They even spent billions on advertising campaigns along those lines, with dancing bunnies and annoying twinkle music trying to convince everyone that CPU prowess was the "be all and end all" of performance and user experience. More Megahurtzes = better.

With the introduction of the SSD, more or less, that broke down. People realized (well most of us already intuitively knew -- I bought "enterprise" SCSI disks in the mid 1990s and onwards till the mid 2000s for precisely that reason!) that the real bottleneck was in the storage subsystem. And that most of the improvements over the years in performance from PC upgrade to PC upgrade leveraged faster storage and more RAM, rather than raw CPU power.

Accordingly, a large chunk of the market is finding just moving to a SSD provides enough performance enhancement. And when machines are delivered with SSDs, reliability rises dramatically to the point that IT managers in business feel perfectly comfortable extending upgrade lifecycles significantly. Add in the trends towards "cloud" (ie: centralized) computing, remote desktops, etc., and there's little reason to be investing in a lot of power for client PC's.

 

[ShintaiDK]

That's exactly what I'm talking about. With only a 5% improvement in performance, Y/Y, most Intel desktop CPU and system customers, only upgrade when their PC breaks. This is precisely my point - Intel no longer, and hasn't in quite some time, offered a "compelling value" to their customers, to get them to upgrade from their older systems, before they break down.

They may be selling a greater mix of higher-end CPUs, due to enthusiasts, but are they selling more in absolute numbers? I didn't think so, the overall PC market is still declining.

I'm glad that enthusiasts are a bright spot in the PC market, but I don't think that the purchases from enthusiasts alone are enough to power the R&D that this market demands.

Which goes back to my first point - Intel just isn't offering the kind of value in their products that gets Joe Sixpack to upgrade, and those purchases are what funds the R&D and drives this industry.

Intel is failing. (To provide value.)

Edit: Intel's core counts in their mainstream CPU lines have stagnated, too, since 2008-2009 with the introduction of the Q6600. With Skylake offering 35W quad-cores, clearly, Intel has the TDP headroom to add at least two more cores to their mainstream CPUs, and still fit them into the standard desktop CPU TDP of 95-100W.

If Intel doesn't do this very soon, they are going to get their lunch eaten by a (hopefully-affordable) 8C/16T CPU in a 95W footprint at 14nm called "Zen".

Edit: And Kabylake, with essentially unchanged CPU cores from Skylake, will be even more underwhelming. Far less than 5% CPU improvement, and just with more hardware support for media codecs. Maybe that will make the 4K HTPC NUC more attractive, but for mainstream desktop users? A collective "yawn" was heard.

Not this story again about "moar cores" and the "magical Zen". I have a feeling you are going to see Zen as a very small upgrade over current AMD FX CPUs Larry. Perhaps then you understand why.

But again, if this is all evils Intels fault. Then explain, why is Apple suffering, why is HTC suffering, why is Mediatek suffering, why is everyone in almost all segments suffering? Why is container freight so low that shipping companies run with a loss, despite of cheap oil?

Right, all Intels fault? :thumbsdown:

The 99% dont care about "moar cores". Its a forum idiocy by people with no connection to the real world.

We are awfully close to the financial crisis numbers again. And this time people got more debt and less money. Unless they sit in the top.

Its so bad in shipping, that Maersk is not even sure its a shipping company in 10 years. You know, a quite big shipping company in the world.

 

[seitur]

Yeah. This forum (and generally all Personal Computing forums) vastly overestimate impact of Intel technological advancement on sales and completly lose economy big picture.

World economy and western economies even more than rest, have huge structural problems. Economic policy from last 30-40 years is kicking the bucket. 95% of western societies simply don't have much resources left and are indebted as hell. This can't just work anymore.

 

[StrangerGuy]

The SSD has been extremely disruptive. For years, Intel was able to sell themselves as the "core" of the computer, "the" component (CPU) that made everything go faster. They even spent billions on advertising campaigns along those lines, with dancing bunnies and annoying twinkle music trying to convince everyone that CPU prowess was the "be all and end all" of performance and user experience. More Megahurtzes = better.

With the introduction of the SSD, more or less, that broke down. People realized (well most of us already intuitively knew -- I bought "enterprise" SCSI disks in the mid 1990s and onwards till the mid 2000s for precisely that reason!) that the real bottleneck was in the storage subsystem. And that most of the improvements over the years in performance from PC upgrade to PC upgrade leveraged faster storage and more RAM, rather than raw CPU power.

Accordingly, a large chunk of the market is finding just moving to a SSD provides enough performance enhancement. And when machines are delivered with SSDs, reliability rises dramatically to the point that IT managers in business feel perfectly comfortable extending upgrade lifecycles significantly. Add in the trends towards "cloud" (ie: centralized) computing, remote desktops, etc., and there's little reason to be investing in a lot of power for client PC's.

People are conflating performance with PC sales way too much. It doesn't matter you are in the first world or the third, the cheapest computing consumer solution for a long time was a PC, even if it was overbuilt and a too maintenance heavy for a Internet/email box. Then came smartphones and tablets to forever change the equation.

 

[mrmt]

That's exactly what I'm talking about. With only a 5% improvement in performance, Y/Y, most Intel desktop CPU and system customers, only upgrade when their PC breaks. This is precisely my point - Intel no longer, and hasn't in quite some time, offered a "compelling value" to their customers, to get them to upgrade from their older systems, before they break down.

While Intel isn't improving raw performance in the same fast pace of earlier years, there is already far more performance available on the market. Are people shifting in droves to Intel HEDT, or is this market segment getting so small that Intel does't even bother in making specific dies for it?

PC basically reached a point where good enough is the norm. An office user will not become more productive if the time to open excel drops from 5 seconds to four (but he would if the time dropped to 30 to 10 like in the past), and content consumption on the web is already good enough in simple, convenient devices like phones and tablets.

Intel is not to blame on that. The entire software industry is shifting from local apps to cloud apps. What can Intel do about it except to provide the chips for devices accessing cloud servers (and the cloud chips as well)?until (and if) someone develops a killer app that demands a lot of power locally, there will be stagnation on the mobile market.

 

[frozentundra123456]

Well, I think it is a combination of factors. Obviously, the availability of phones and tablets and PCs becoming "good enough" is a big factor in the weak sales. OTOH, I it seems to me that Lack of improved performance is a factor as well, For sure it is with atom. Their performance and lack of progress in modems is still killing them here. But even in big core, I still think there would be more upgrades and replacements if improvements were coming faster. They could also put their best products like iris pro in a much wider and cheaper range of products. And i hte to keep this argument going, but a I also strongly believe a mainstream hex core and making HT and quad cores more available in lower parts of the product stack without raising prices would increase sales.

 

[ShintaiDK]

98% of gamers uses 1080p or below. Why didn't they all move to 1440p and 4K?

 

[Ketchup]

The free upgrade and all the media scare over Windows 10 can't be helping. The people that would normally see the new OS as a reason to upgrade are either holding off or finding that the new OS runs just fine on their existing hardware.

On the business side, our company switched from a lease to buying program just a couple years ago. To me, that can only mean that they plan on implementing a longer life cycle, as well as profiting from the sale of the equipment whenever they do decide to order new equipment.

 

[Arachnotronic]

But even in big core, I still think there would be more upgrades and replacements if improvements were coming faster. They could also put their best products like iris pro in a much wider and cheaper range of products. And i hte to keep this argument going, but a I also strongly believe a mainstream hex core and making HT and quad cores more available in lower parts of the product stack without raising prices would increase sales.

Forget enthusiasts for a moment. How would anything that you described above get the average Joe to suddenly want to buy a new PC?

Do you think the average Joe has any clue what "HT" is, or cares about how many cores are in his computer?

The only people who care about this stuff are enthusiasts and like I said, enthusiast CPU sales are doing really well. It's the mainstream average Joe that can't be bothered to spend what amounts to a significant portion of his annual take-home pay for a new computer, especially when average Joe's wife and kid really want the new iPhone this year -- both fairly big-ticket items to the vast majority of consumers.

 

[frozentundra123456]

The free upgrade and all the media scare over Windows 10 can't be helping. The people that would normally see the new OS as a reason to upgrade are either holding off or finding that the new OS runs just fine on their existing hardware.

On the business side, our company switched from a lease to buying program just a couple years ago. To me, that can only mean that they plan on implementing a longer life cycle, as well as profiting from the sale of the equipment whenever they do decide to order new equipment.

Exactly. I just came back to post this same thought, but you beat me to it. Upgrading windows used to be another motivation to upgrade. Since Win 7, there had been 0 motivation in that regard. First we got win 8, which actually deterred people from upgrading, and now we get the spyware known as Win 10 which wants to turn your PC into an Xbox and force you to buy everything from the Windows store. Even if one wants Win 10, as you said, it is a free upgrade.

 

[Arachnotronic]

The free upgrade and all the media scare over Windows 10 can't be helping. The people that would normally see the new OS as a reason to upgrade are either holding off or finding that the new OS runs just fine on their existing hardware.

This is an excellent point. At the end of the day, people don't buy hardware for hardware's sake*. They buy computers so that they can do things that they couldn't do (easily) with their previous ones.

*outside of a few enthusiasts on web forums

 

[Ketchup]

I think the focus in hardware improvements (or lack thereof) is the wrong direction to take this. Look at software. Hardware that was released back when Windows 7 came out is running 10 just fine. The latest version of Office can run on a computer that has Windows 7 and up (and I still don't see anything I need over the last version). Directx improvements only apply to geeks like us. The industry is moving to tablets because that is the developing technology right now, and I really can't believe that OEMs are just now figuring this out.

 

[Arachnotronic]

People are conflating performance with PC sales way too much. It doesn't matter you are in the first world or the third, the cheapest computing consumer solution for a long time was a PC, even if it was overbuilt and a too maintenance heavy for a Internet/email box. Then came smartphones and tablets to forever change the equation.

Bingo. The kind of computing performance/functionality that you can get in a $150-$200 phone is staggering and only getting better with time.

 

[Abwx]

The math is simple, if something close to a 2GHz 4C A57 can be found on a phone then a PC need at least 32 such cores a 2.3Ghz to have any relevancy as a mandatory item, applications that take advantage of this core amount would exist if the CPUs were mainstream, so the argument that the software doesnt exist is moot as what exist is designed in function of the available hardware...

 

[frozentundra123456]

Forget enthusiasts for a moment. How would anything that you described above get the average Joe to suddenly want to buy a new PC?

Do you think the average Joe has any clue what "HT" is, or cares about how many cores are in his computer?

The only people who care about this stuff are enthusiasts and like I said, enthusiast CPU sales are doing really well. It's the mainstream average Joe that can't be bothered to spend what amounts to a significant portion of his annual take-home pay for a new computer, especially when average Joe's wife and kid really want the new iPhone this year -- both fairly big-ticket items to the vast majority of consumers.

I did say it is only one factor, and probably not the major one. As far as knowing about HT, and overall performance, there is such a thing as advertising. Just think of the advertising and good press Intel would get by shifting performance up in every tier of the product stack. What can they advertise now? Pay 1500 dollars for an ultra book that has no better performance than a 4 or 5 year old conventional laptop that cost 1/3 of that. ? Oh, and if you want our best iris pro igpu, you have to pay another 500 bucks.? No wonder sales are in the toilet.

All I am trying to say, is if one is considering an upgrade, but you only get a few percent improvement, you will definitely say "forget it". If the improvement is bigger, then perhaps you would do it. "Good enough" is not an absolute measure. It is a continum of "barely adequate" to "more that enough" Undoubtedly there are some people with "good enough" that would consider "better" if "better" were not such a miniscule improvement.

One of the way to improve sales in a stagnant or declining market is to offer more value for the money. Intel seems to stubbornly resist this, except for the minuscule ipc improvements from generation to generation, which has now been made on a longer cycle. I dont really know if the are holding back on these improvements or not. I really dont think so, but no matter really. They could do so much more by making hyperthreading more readily available, making edram more available, and increasing core counts.

Perhaps we will see if this "good enough" excuse is valid if Zen is competitive and priced lower. According to the intel defenders, it doesnt matter, because the 99% average Joes have a computer that is "good enough" and will not upgrade no matter what the value quotient of a new chip.

 

[zentan]

A competitive Zen APU at right time could make good wins in 400-800$ notebook market.That part of the market could become more bright with more options at the very least.

 

[Arachnotronic]

I did say it is only one factor, and probably not the major one. As far as knowing about HT, and overall performance, there is such a thing as advertising.

Yes, and this advertising has made it so that people know that Core i3 = good, Core i5 = better, Core i7 = best. Beyond that the vast majority of buyers don't know or simply don't care about the details.

Remember that most people/computer buyers are not technically literate. They are buying a tool to help make their lives better. Always keep this in mind.

Just think of the advertising and good press Intel would get by shifting performance up in every tier of the product stack.

I don't get what you're saying. Intel improves performance and adds new features in each tier with each new product. This hasn't helped boost sales at all.

What can they advertise now? Pay 1500 dollars for an ultra book that has no better performance than a 4 or 5 year old conventional laptop that cost 1/3 of that. ?

This is what Intel advertises:

Also, I think you are missing the point. The trend in technology has been to make things slimmer, lighter, etc. Battery life over the 4-5 year old "conventional" laptop hulk is going to be much better (and yes people care about battery life), screens are higher quality, the systems are lighter/easier to carry, storage performance has improved, etc.

A mainstream Ultrabook with a Broadwell-U/Skylake-U is just a far better experience for the average Joe than a 4-5 year old laptop.

Oh, and if you want our best iris pro igpu, you have to pay another 500 bucks.? No wonder sales are in the toilet.

OK, first of all, Intel isn't charging a $500 delta for Iris Pro GPU, so this doesn't make a lot of sense. The PC OEMs put the higher end CPUs into systems that are, across the board, higher quality. Harder to build industrial designs, better storage, much higher quality displays, better touchpad/trackpad controllers, higher quality cooling system, etc. Remember that OEMs are trying to make money here and they want to up-sell people too.

They have little incentive to stick an Iris Pro into a cheap POS PC because somebody buying a cheap POS PC is probably buying on price, not on the best features/bells and whistles. And even if Intel were to bring Iris Pro pricing down, the non-Iris Pro chips would still be cheaper and the OEMs would still choose them for their cheap POS systems.

All I am trying to say, is if one is considering an upgrade

Why does the average person consider an upgrade? Does the Average Joe run Geekbench 3 and determine that it's time for a new PC because his score is too low?

Remember, average Joe is buying systems not CPUs. Unhappiness with a current system and a desire to buy a system that's better in many noticeable ways (Geekbench 3 and other such benchmarks are the last thing average Joe cares about) are what fuel upgrades.

but you only get a few percent improvement, you will definitely say "forget it". If the improvement is bigger, then perhaps you would do it.

Improvement in what way? If average Joe is considering an upgrade, then obviously his current system is not satisfying his needs and it's important enough for him to spend a big portion of his post-tax salary (particularly if Joe lives in an emerging market and a PC represents ~4-8 weeks of his salary).

"Good enough" is not an absolute measure. It is a continum of "barely adequate" to "more that enough" Undoubtedly there are some people with "good enough" that would consider "better" if "better" were not such a miniscule improvement.

Improvement in what way? A PC today for the same money that you had to spend 4-5 years ago is dramatically better in many ways beyond CPU performance benchmarks. It also happens to be much better in CPU/GPU performance benchmarks.

One of the way to improve sales in a stagnant or declining market is to offer more value for the money. Intel seems to stubbornly resist this

What average Joe "values" is different than what enthusiasts on AnandTech forums value.

except for the minuscule ipc improvements from generation to generation, which has now been made on a longer cycle. I dont really know if the are holding back on these improvements or not. I really dont think so, but no matter really. They could do so much more by making hyperthreading more readily available, making edram more available, and increasing core counts.

I guarantee you that the average PC buyer does not know about/care about any of those things. Go to Best Buy and ask a random shopper if they even know what hyper-threading and eDRAM are. Also ask him/her how many CPU cores his/her home PC has. ;-)

Perhaps we will see if this "good enough" excuse is valid if Zen is competitive and priced lower. According to the intel defenders, it doesnt matter, because the 99% average Joes have a computer that is "good enough" and will not upgrade no matter what the value quotient of a new chip.

AMD Zen will not change the fundamentals of the PC market. It only has the ability to shift market share away from Intel to AMD if it is any good.

 

[frozentundra123456]

As far as laptops go, yes light weight and battery life are important. But price is important as well. I think the "average joe", "99% crowd", is much more sensitive to price than to battery life and light weight.

I mean lets face it, does the average joe who (supposedly) cannot afford to upgrade his 400.00 desktop have the money for a 1500.00 ultrabook? Does he have another 500.00 to spend if he wants the best igpu? Does he do heavy business travel or take a lot of vacations where mobility and battery life are critical? I dont think so.

Personally, the people that I know, family members mostly, who have laptops use them basically at home, plugged in most of the time, at most just going from room to room. If they travel, they use their phones on the go and the laptop in a hotel at night, where, guess again, it is plugged in. I would most definitely prefer a 35 watt laptop with twice the performance of a Sandy Bridge i5 than a 15 watt that has similar performance and throttles anyway because cooling has been sacrificed for "thin and light".

Edit: Anyone who reads my posts knows I am no AMD fanboy or intel hater. But I honestly have to seriously question their strategy of maintaining high margins at all costs in a declining market. Providing more for the money would seem to be the obvious way to decelerate at least, the decline of the market.