ARMONK, NY -- IBM's second-quarter hardware revenue rose 19% sequentially but was down 26% year-over-year, the company reported.

All segments saw declines, with the company's converged System p down 13% year-over-year, storage down -20%, System x off -22%, and System z (mainframes) dropping -39%.

The results suggest enterprise hardware spending remains "difficult," said analyst Sherri Scribner of Deutsche Bank Equity Research. "We are currently modeling EMS revenue from servers and storage to be down 31% year-over-year, largely in line with IBM's hardware revenue."

According to DB, IBM makes up about 8 to 10% of revenue for Celestica, Benchmark Electronics and Sanmina-SCI, and about 5 to 7% of revenue for Jabil and 2 to 5% of revenue for Flextronics. DB assessed IBM's announcement as neutral to EMS companies, although the relative strength in Big Blue's System p is "modestly positive" for Celestica and Sanmina-SCI.

 

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