Tablet tax?
Chip-maker AMD has announced that it expects Q3 revenue to be down on the previous quarter's total of $1.65 billion by between one and four percent.
Q2 is generally the weakest quarter of the year - lacking boosts such as the January sales, back-to-school and Christmas - so Q3 revenues are usually expected to be higher than Q2's.
The reason given by AMD is: "weaker than expected demand, particularly in the consumer notebook market in Western Europe and North America."
This doesn't come as a great surprise. Market researchers have been predicting a weaker PC market in the second half of this year for some time, and Intel lowered its revenue forecast a month ago for the same reasons. But you have to wonder if this consumer PC weakness is entirely down to macroeconomic reasons.
Last week there were widespread reports about how the Apple iPad may be eating into the notebook market. It's hard to gauge how many iPad customers buy one instead of a notebook but, for the sake of argument, let's assume it's 100 percent.
A report in July estimated 13 million iPads would ship this year, while recently an analyst has revised his estimate for next year to 21 million units, predicting it would overtake the Mac in the process. The iPad has only been available for three quarters of this year, so if we assume the 13 million figure is accurate, that extrapolates to over 17 million if it had been selling for a full year.
The most recent IDC estimate for worldwide portable PC shipments - which includes netbooks but excludes tablets - is for over 208 million. That means iPad sales will have amounted to a twelfth of the notebook total.
While this is still a relatively small fraction, it's still quite a lot of disruption from a product category that effectively didn't exist before the launch of the iPad, and could certainly cause a decrease of a few percent in mobile PC sales.
So we think it's fair to assume that the iPad has been a significant contributing factor in a drop-off in consumer portable PC sales, and the pressure is definitely on AMD and Intel to empower a new generation of cheap, powerful notebooks with their latest hybrid CPU/GPU chips.
