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May 29, 2014

Chinese server makers outshine US companies in first quarter

Huawei and Inspur Electronics on the rise as top three US companies fall.

By CBR Staff Writer

Chinese server manufacturers outshone their US peers in server shipment during first quarter though worldwide shipment dropped 4.1%, according to Gartner.

Chinese companies Huawei and Inspur Electronics have recorded huge growth in shipment, with respective growth of 61% and 288.7%during the quarter.

Inspur Electronics’ server shipments grew from 20,823 during first quarter of 2013 to 80,929 units in this quarter, which helped the company to make it to the top five server vendors list.

Huawei’s shipments grew year-on-year from 53,380 units to 85,919 making it as fourth largest vendor with a market share of 3.6%.

US server makers HP, Dell and IBM recorded declines of 7.9%, 10.1% and 27.8% respectively during the quarter.

Despite the decline, HP led the worldwide server market in terms of revenue and shipments. HP’s worldwide server shipment share was 22.6% during the quarter, followed by Dell with a 19.7% market share.

HP recorded revenue of $2.9bn with a market share of 25.5%, despite 2.3% decline compared to corresponding quarter last year.

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The company also recorded a 7.9% decline during the quarter from 580,563 in Q1 2013 to 534,652.

Cisco was the lone vendor among the top five companies which increased its revenue by 37% from $450m to $616m.

Gartner research vice president Jeffrey Hewitt said the first quarter of 2014 produced relatively weak growth on a global level with a variation in results by region.

"All regions showed a decline in either shipments or revenue except for Asia/Pacific. Asia/Pacific posted a 3.3 percent increase in revenue and an 18 percent increase in shipments," Hewitt said.

"In Japan shipments increased by 13.5 percent, but revenue declined by 9.2 percent while in Western Europe shipments declined by 4.8 percent and revenues rose 6.7 percent."

"x86 servers managed to produce an increase with growth of 1.7 percent in units for the year and 2.8 percent in revenue," Mr. Hewitt said.

"RISC/Itanium Unix servers fell globally, down 19.9 percent in shipments and a 16.9 percent decline in vendor revenue compared with the same quarter last year. The ‘other’ CPU category, which is primarily mainframes, showed a decline of 37.6 percent year over year in terms of revenue."

IBM is facing further trouble this year, as Chinese banks are being advised to stop using IBM servers and replace them with Chinese-made hardware.

The Chinese government has made the move as spying tensions with the US continue to rise, and agencies including the People’s Bank of China and the Ministry of Finance are said to be reviewing whether or not the country’s commercial banks’ dependence on IBM servers is a security compromise.

Grabbing this opportunity, Chinese server maker Inspur has started a campaign dubbed "IBM to Inspur" to lure in the IBM server users as face the off between two countries continues over spying allegations.

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