TIBURON, Calif. — August 1, 2002   According to Jon Peddie Research (JPR), graphics out ship CPUs while prices within the PC market continue to be pressured downward. Findings from JPR's Market Watch report indicate 30% of the computers that ship have two graphics devices for every x86-based processor. This, the report points out, has helped to keep the smaller suppliers in the market.

"The maturation of the PC industry and the saturation of the desktop market has lead to increased consolidation amongst PC graphics suppliers," confirmed Lisa Epstein, senior analyst of JPR's Market Watch report. "Today there are just eight suppliers and only two with significant market share. The rest survive on the over-buy of the industry, spot availability, aggressive pricing, and niche positioning."

On the notebook side, mobile display controllers accounted for 19% of total graphics shipments in Q1'02, up from 17% in Q4'01 and from 14% in Q1'01. Most major suppliers now participate in the mobile segment, recognizing its potential for growth. Likewise, chipsets with integrated graphics are penetrating the mobile segment as suppliers increasingly target the consumer market and strive to bring down notebook ASPs.

Jon Peddie Research estimates that 40.79 million graphics devices shipped for all segments of the personal computer industry in the first quarter of 2002. This represents a 5.2% increase from 38.78 million units shipped in Q4'01 and a 2.3% increase from 39.89 million units shipped in the same period the previous year.

Of the graphics devices shipped in Q1'02, 33.06 million or 81% were desktop controllers and 7.73 million or 19% were mobile display controllers. Eight suppliers accounted for 99% of all graphics shipments during the quarter.

Overall, the industry saw good growth in shipments for Q1'02 as compared to the declines of the prior year. The outlook for Q2'02 is mixed, however, as the industry enters a traditional seasonal slowdown, and suppliers such as AMD, Apple, Intel, HP and IBM have all issued revised guidance in the face of unexpected shortfalls going forward.

Jon Peddie Research is the leading graphics and multimedia research and consulting firm and has just released its Market Watch Q1'02. The detailed report takes an in-depth look at activity in the PC-based graphics market for the first calendar quarter of 2002 and contains shipment data, analysis and forecasts for all industry segments through 2003.

Jon Peddie's Market Watch provides graphics unit shipments by quarter, shipment forecasts by quarter, supplier market share, performance and price segmentation for graphics devices, as well as product news, design wins, financial results and share price performance for leading suppliers.

In addition to market data, Market Watch features JPR's Graphics Market Index (GMI), which tracks leading graphics suppliers' share price performance over time as a composite index against the major U.S. equity markets. The current edition of Market Watch references GMI data from July 2, 2001 through May 28, 2002.