PC sales tipped to ease

By PETER GRIFFIN

Paltry growth forecasts for the local PC market this year by research company IDC show that New Zealand has been caught by the general malaise hitting the industry.

IDC is predicting sales growth of just 3.1 per cent this year, a far cry from the 10.4 per cent achieved last year and well below a global growth rate of 10.7 per cent predicted by analyst group Dataquest.

Growth of 3.1 per cent in PC sales value is also predicted, adding little to last year's total of more than $1.2 billion.

A total of 83,897 PCs were sold in the first quarter of this year, up nearly 10 per cent on the same period last year and revealing steady growth in the home-user and small-business market.

But IDC market analyst Darian Bird said that jump in sales was distorted by a surge in post-Y2K computer buying across the board.

"The first quarter [2001] didn't have to be a big quarter to achieve good growth and that's to do with the Y2K distortion.

"Corporate buyers tended to buy just before Y2K or hold off until a couple of quarters after it.

"In the home market, people waited until just after Y2K. That's why Hewlett Packard did so well early in the year," he said.

Despite the sluggish outlook, IDC does not expect slower sales in large PC markets such as the United States to have a significant impact on local sales in the second quarter.

The top four spots in the PC market for quarter one 2001 remained unchanged from the previous quarter. Compaq was market leader, followed by Hewlett Packard, Dell and IBM.

But local PC assemblers continued to grab market share.

The most recent IDC figures included The PC Company for the first time.

The Hamilton firm ranked behind Compaq and Hewlett Packard for desktop PCs.

Mr Bird said local assemblers accounted for 36.5 per cent of all new PCs sold in the first quarter, up from 34 per cent in quarter four last year.

"The home market was reasonably strong in the first quarter, which would have accounted for some of that increase," he said.

Dell general manager Ross Allan said its ranking behind The PC Company in the desktop market was not surprising, as Dell's strength lay in corporate and Government contracts.

"If you look at the home and small business market and non-tertiary education, they account for over 50 per cent of the total space.

"If you're not playing in that market significantly and there's an upsurge in demand, that will show up in the figures. And the clone market in desktops is very strong."

But Mr Allan pointed to Dell's recent elevation to number one in the global PC market as a sign that the vendor has a sound business model.

"Quarter one was pretty tough but we managed to take business off competitors," he said.

According to Dataquest, Dell's series of promotions, including boosted memory and giveaways, helped the company to jump 34 per cent in sales, taking its first-quarter global market share to 12.8 per cent, up from 9.9 per cent last year.

Traditionally dominant Compaq boosted sales just 0.3 per cent, and its market share dropped to 12.1 per cent from 12.5 per cent.

Locally, Dell held its second place in the sluggish Intel server market behind Compaq, which had 34.9 per cent of the market.

And Toshiba maintained its dominant position in laptops with 36.3 per cent market share.

IDC says 13,178 portable computers were sold in the first quarter, down from 13,366 in the previous quarter.

Meanwhile, Gartner Research is predicting the New Zealand IT market will double to $US7.5 billion ($18.2 billion) by 2005.

Gartner estimates that the local IT market was worth $US4.1 billion last year, which compares reasonably well with the Statistics New Zealand figure of $8.68 billion for the year to March last year.

Gartner said the local PC market slumped to $US384 million last year, from $US444 million in 1999.

The company is predicting a slow-growing PC market for the coming years, rising to $US738 million in 2005.

IDC predicts the PC market will be worth about $1.3 billion in the same period.

Links


IDC

Statistics NZ

Gartner