The signs are good for a healthy fourth quarter in the PC sector, thanks to strong Q3 financial results from leading chip manufacturers Intel and AMD.
According to the latest forecast from iSuppli, the results, coupled with other market factors, signal that the PC sector has overcome the summer sales slump and that things are looking up for Christmas.
Intel's Q3 revenue of $8.5bn came in at the high end of its September forecast, which had been revised down from the original estimate range of $8.6bn-$9.2bn to $8.3bn-$8.6bn.
This revision was caused by weak PC processor demand during the first two months of Q3, but the market rallied in September and Intel recorded record shipments of notebook and server processors.
Meanwhile, AMD had a stunning Q3, iSuppli noted. It announced Q3 turnover of $1.2bn, and although that is slightly down on Q2, it was 30 per cent higher than the same period in 2003.
AMD's microprocessor division was its strongest performer, recording turnover of $673m, up by 21 per cent on Q2 2004 and by 34 per cent on Q3 2003. Average selling prices for its Athlon 64 processors remained high, and the firm shipped twice as many in Q3 as in Q2.
"Combining these results with solid financial outlooks from Dell and Microsoft, the overall picture remains positive for the PC market," said Matthew Wilkins, senior analyst at iSuppli. "The softening of sales in Q3 represented a mid-course aberration and not a fundamental change in market conditions.
"Our new forecast predicts that worldwide PC sales will rise to 191.4m units in 2004, up by 13.4 per cent on 2003. Revenue will grow to $132.8bn, up by 12 per cent on 2003."
The outlook also looks healthy on the UK front, claimed Les Billing, general manager at Microtronica.
"Things are looking up for Q4," he said. "It's not stunning, but it certainly isn't bad. There is still a fair amount of corporate replacement going on. The market is going through a transition at the moment, particularly with all of the new processor pin formats, because different chipsets mean different motherboards.
"Mobile sales are slowing down a bit now for some reason, but more system builders are having a go at building their own notebooks. We are selling more notebook chassis now.
"Also, AMD's Athlon 64 is selling very well and the firm had a successful launch of its Sempron mobile processor. We are a seeing lot of AMD chips going out of the door; demand remains strong and availability is good."
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