SAN JOSE, Calif. Market watcher iSuppli Corp. has raised its 2007 PC forecast a couple notches based on stronger than expected demand for notebook computers in the first half of the year. The company predicts sales of 264 million units this year up 11.2 percent from 239 million in 2006.
The previous forecast called for 10.7 percent growth in PC sales in 2007. However, notebook shipments unexpectedly rose to 21.8 million units in the first quarter of this year, up 23 percent from 17.7 million in the first quarter of 2006.
"There were concerns that the second-quarter release of Intel Corp.'s new Santa Rosa notebook microprocessor platform might cause buyers to delay purchases originally set for the first quarter. However, Santa Rosa did not have a significant negative effect on first-quarter shipments," said Matthew Wilkins, principal computer analyst for iSuppli.
First-quarter notebook PC shipments were three percent higher than iSuppli (El Segundo, Calif.) estimated. The company now expects notebooks to account for almost 40 percent of total 2007 PC market shipments. Intel chief executive Paul Otellini predicted notebook shipments will outnumber desktop sales by 2010.
Indeed, the intensifying competition between Advanced Micro Devices and Intel Corp. to define next-generation notebooks may serve to fuel demand, especially next year when both companies have new platforms coming to market. Longer term, AMD will use the growing notebook market as the launch pad for its first Fusion processors that will mix x86 and graphics cores on a single die.
The double-digit notebook and PC forecasts are welcome news. Analysts have generally been rocking the semiconductor industry with lowered growth forecasts for 2007, dipping into the low single digits.
Separately, iSuppli also updated its projections for solid-state disk drives in notebooks.
The company now predicts SSDs will be used in 12 percent of all notebooks by the end of 2009. In contrast, penetration of hybrid hard drives (HHDs) in notebook PCs will reach 35 percent by the end of 2009, the company predicted.
Solid state drives use only flash memory to achieve high ruggedness with low power consumption. HHDs use typically less than a Gbyte of flash inside a conventional hard drive to speed booting and loading applications.
"Although in the near term, their cost will remain a prohibitive factor for mass-market adoption of SSDs and HHDs, this cost gap will narrow during the coming years, leading to their wider usage," said Krishna Chander, iSuppli senior analyst, storage research.
The bullish forecast on hybrid drives is particularly surprising. To date, few OEMs have released notebooks using the drives while many have adopted the 1-2 Gbyte flash Turbo Memory modules developed by Intel under its Robeson program to deliver the same features. OEMs said the higher flash densities and fast algorithms used by the Intel approach have proved a superior approach to date.
"Hard disk vendors are increasing both the capacity and areal density of their notebook products in 2007 and beyond," said Chander. "Furthermore, hybrid drives cost less to produce and offer a level of data integrity that can only be delivered by tried-and-true hard disk technology," he added.
The combination of SSDs, HHDs, Turbo Memory and other solutions will propel flash memory's penetration of notebook-PC data storage to nearly 60 percent by the fourth quarter of 2009, iSuppli predicts. Hard drives are on the defensive in the face of this rising tide of flash memory in computers.