Deutsche Bank frets over impact of 64-bit Apple iPad and reduces global PC shipment forecasts
The expected arrival this month of Apple’s 64-bit iPad could hurt PC makers, hoping for a corporate PC sales boost as businesses migrate away from Windows XP.
In a research note 7 October, Chris Whitmore, an analyst with Deutsche Bank Equity Research, said an iPad armed with a 64-bit chip – the same ARM-based A7 chip found in the newly launched iPhone 5S smartphone – could make inroads into businesses, hindering a PC market that already has experienced several quarters of sales declines.
Given that, Deutsche Bank is dropping its PC shipment forecast for 2013 and 2014 by 10 percent and 8 percent, respectively. Previous estimated declines ranged in the 8 and 6 percent range.
“We expect growing [desktop] virtualisation and iPad deployments in the enterprise to pressure corporate PC sales through 2014-15,” Whitmore wrote in his note. “We expect [Apple’s] iPad refresh to include 64-bit architecture, which should enable a greater array of enterprise App development and facilitate greater enterprise penetration over time.”
The news site AllThingsD, citing anonymous sources, said Apple will debut the new iPad – and a range of other products, including new Mac Pro and OS X Maverick offerings – during an invitation-only event 22 October somewhere in California (the sources declined to say exactly where).
Apple’s introduction of the iPhone in 2007 and the iPad in 2010 – followed by the flood of Android-based smartphones and tablets – have significantly impacted the PC market, forcing established tech vendors like Hewlett-Packard, Dell and Intel to respond with new strategies and products designed to lessen their reliance on the contracting PC sales. For example, Intel is driving down the power consumption of its processors to make them more attractive to smartphone and tablet makers, while also fuelling new PC form factors.
PC makers also are hoping that Microsoft’s decision to end its support of Windows XP will help boost corporate PC sales by businesses looking to migrate their environments to Windows 7 or 8. However, Deutsche Bank’s Whitmore did not appear optimistic about the impact the Windows migration or new technologies like Intel’s new chips will have on PC sales.
“In the near term, back to school PC demand appears relatively soft and recent new hardware releases (Haswell) had little impact spurring incremental demand,” he wrote. “Furthermore, we believe the corporate upgrade cycle will peak in the [second half of] 2013 as corporates complete [Windows] 7 transitions ahead of Microsoft’s ending support of Windows XP in early 2014.”
According to The Wall Street Journal, Barclays analyst Ben Reitzes said a 64-bit chip and a 13-inch screen could help Apple expand its market reach.
“We believe reviving the iPad could be a way to reaccelerate earnings growth since a more useful iPad could expand the [total addressable market] by tens of millions,” Reitzes wrote in an 8 October report.
Apple’s introduction of the 64-bit A7 also caused a stir in the chip-making community. In an interview with IDG News Services earlier this month, Anand Chandrasekher, senior vice president and chief marketing officer at Qualcomm, dismissed Apple’s chip, adding that “they are doing a marketing gimmick. There’s zero benefit a consumer gets from that.”
It was a surprising comment, given the effort ARM and its various chip-making partners – including Samsung and Nvidia – are putting behind developing 64-bit capable chips not only for mobile devices but also for low-power servers. Qualcomm also is expected to bring out 64-bit ARM chips. In a statement sent to journalists 8 October, Qualcomm officials backed away from Chandrasekher’s assertion.
“The comments made by Anand Chandrasekher, Qualcomm CMO, about 64-bit computing were inaccurate,” the emailed statement read. “The mobile hardware and software ecosystem is already moving in the direction of 64-bit; and, the evolution to 64-bit brings desktop class capabilities and user experiences to mobile, as well as enabling mobile processors and software to run new classes of computing devices.”
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Originally published on eWeek.