SAN FRANCISCO - Global computer server sales in the second quarter continued to plunge to levels not seen in years, research firm IDC said on Tuesday, but signs of stability are appearing in a segment that analysts call a bellwether for the IT industry.
Factory revenue in the worldwide server market tumbled 30.1 percent to $9.8 billion in the April-June period, the lowest revenue since IDC began tracking the market on a quarterly basis in 1996.
Server unit shipments fell 30.4 percent, the largest ever year-over-year quarterly decline, IDC said.
We're kind of calling this the bottom, that Q1-Q2 is the bottom. We thought it would be like a V-shape but I think it's more like a U-shape bottom, said IDC analyst Jed Scaramella.
We're seeing signs of life in Q3. We still think this is going to be a slow recovery but we think Q2 was the worst.
All the top server vendors posted steep year-over-year declines in the second quarter.
IBM held the top spot in the server market with a 34.5 percent share. Its revenue slid 26.3 percent -- the smallest decline of the top 5 vendors -- but the company picked up 1.8 points of market share from a year ago.
Hewlett-Packard was in the No. 2 position with a 28.5 percent share. Sales fell 30.4 percent and the company lost a sliver of market share, IDC said.
No. 3 Dell saw revenue fall 26.8 percent while No. 4 Sun Microsystems, which is being acquired by Oracle, posted a 37.2 percent fall. Sun lost more than a full percentage point of market share.
Server sales in Western Europe fell more steeply than in the U.S., Scaramella said.
The x86 market -- low- to mid-range servers based on standard industry components -- declined 28.1 percent in the quarter to $5.2 billion worldwide.
Overall, I think the x86 is doing okay, it's the first to get hit but it's also the fastest to get ramped up, Scaramella said.