Locals take bigger bite of PC market

By PETER GRIFFIN

If the figures can be believed, it has been a depressing year for the PC industry, but local assemblers claim to be holding their own against better-resourced multinationals with tumbling market shares.

Local assemblers made about 33 per cent of new PCs sold in the three months to September 30, says analyst group IDC, up 3 per cent on the previous quarter and equating to more than 26,000 PCs.

In the same quarter, market leader Compaq's market share dropped four percentage points to 20.2 per cent compared with the same quarter last year and amid forecasts that signal zero growth for the market as a whole this year.

Overall, IDC forecasts a flat market for local assemblers, saying the group would hold on to its share - roughly a third - of the market.

Peter Shirley, executive director of local assembler Arche Technologies and chairman of the Computer Manufacturers Association, said his company had experienced year-on-year growth of 4 per cent in the September quarter.

"We thought it wasn't a bad result considering that a lot of companies have actually gone backwards."

The lion's share of the locals went to the PC Company, which accounted for 9.3 per cent of new PCs sold in the third quarter.

Managing director Colin Brown said that put the PC Company in third place among local assemblers in Australasia.

"Microsoft has told us that they don't know of any other local assembler around the world with that kind of market share," he said.

An attack on the business market, which was already being supported with a product line of business PCs, notebooks and servers, was planned by the PC Company, along with a TV advertising campaign.

David Moynahan, sales manager at Auckland-based wholesaler TMC Computers, said the relative success of local assemblers had a lot to with a growing willingness to "buy New Zealand made" - if the price was right. "I think collectively we're holding our own and possibly gaining against the multinationals," he said.

"You hear so much about these big manufacturers laying off staff. Confidence in them has to drop."

Mr Moynahan said modest growth of 2 to 3 per cent had been achieved compared with last year's September quarter.

But sales growth of 5 per cent was forecast for next year, along with increased profitability.

Much of that growth would not come from selling standard "bundled" PCs, but from expanding business in areas where the squeeze on margins was not so great.

"We pretty much all buy at the same level and know each other's pricing and we largely sell at the same prices."

But, despite reasonable gains among the larger assemblers, the news has not been all good.

"You have to keep an eye on the smaller guys as well," said Darian Bird, analyst at IDC.

"It's the smaller ones that seem to be struggling more."

"Macrocom went belly up earlier this year. We expect to see a bit more of that consolidation."

Although some local assemblers were shifting their focus away from the consumer market in favour of higher margins and targeting small businesses, the education sector and corporates, the mix of consumer and business software being sold was not changing significantly.

Brett Roberts, manager of small business and OEM at Microsoft, said sales to local assemblers in the consumer market were relatively strong.

"I'm not sure that it's all that flat in the consumer space. Judging by the number of Windows XP Home licences we're selling, things aren't as bad as they seem."

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