Microsoft doubts IDC's view of the PC market

By ADAM GIFFORD

IT industry research firm International Data Corporation's bullish estimate of the health of the New Zealand PC market has been challenged by the new head of Microsoft New Zealand, Ross Peat.

IDC reported its latest findings and predictions at a seminar in Auckland yesterday optimistically titled "Capitalising on the recovery".

Analyst Darian Bird said IDC expects about 343,000 PCs, not including servers, will be sold in New Zealand this year, compared with 322,000 last year.

It picks growth of 6.3 per cent overall, with notebook sales of 10.5 per cent.

Speaking on a panel at the seminar, Peat said Microsoft saw it differently.

"Our view, based on operating system licences, is the market [to the year ending June 30] is between 260,000 and 270,000 units," Peat said.

He said that is a 10 per cent drop on the year ending June 30, 2001, when Microsoft believes about 290,000 PCs were sold.

Microsoft measures the year to June 30, while IDC looks at the calendar year, but Peat said that does not explain the wide discrepancy.

"We have felt for some time the total size of the installed base was being overstated, and we get additional figures on international shipments into New Zealand from the multinationals," he said.

Peat agreed with IDC that sales should pick up in the second half of this year, as companies start replacing PCs bought in 1998 and 1999 to replace machines which were not Y2K compliant. He's picking five per cent growth.

Bird said he will need to talk through the differences with Microsoft, but he stood by his estimate.

"Each quarter we get the numbers from the vendors and then check them through the channels," he said.

Colin Brown from the PC Company said some companies may try to talk up their figures, skewing market perceptions. This worked to the disadvantage of local assemblers.

"I'd be inclined to accept the Microsoft figures. Microsoft does very careful data collection because it wants to make sure it gets paid," Brown said.

IDC country manager Dinesh Kumar said reductions in hardware prices mean the total amount spent on single user systems, that is PCs and printers, will drop 10.5 per cent this year to about $1.2 billion.

That is 26 per cent of the total New Zealand technology spend of $4.8 billion, up slightly on the $4.7 billion spent last year.

The biggest share, 45 per cent, will go on IT services, with packaged software accounting for 17 per cent, datacom equipment 5 per cent and servers 7 per cent.

Ominously for hardware vendors, companies are waiting longer before upgrading - 36 per cent of those surveyed said they intended to upgrade their PCs after four years, compared with just over 20 per cent in 1999, and almost 15 per cent said they would use them five years and longer.

Users are also resisting pressure to upgrade operating systems. Some 21 per cent are still using Windows 95 as their standard environment, 23 per cent are on Windows 98 and 29 per cent are on Windows NT, about the same as last year.

The percentage using Windows 2000 as a standard desktop jumped from 9 per cent last year to 22 per cent in its estimate for this year. But IDC says it was unable to find a statistically significant sample which had made the upgrade to Windows XP. Peat said most XP sales have been in the consumer market and would not have fed through into IDC data yet.