Asian hardware prices to keep falling: Gartner

Unit prices of major hardware items -- PCs, servers, workstations and printers -- will decline in the Asia-Pacific region (excluding Japan) by around 6 percent per year, according to research released Tuesday by Gartner Inc.

While total unit shipments of these items will rise 10.7 percent this year in the region, vendor revenue will rise just 3 percent to US$32.19 billion because of falling prices, Gartner said.

PC sales made up 74 percent of hardware sales in Asia-Pacific during 2001, with 19.42 million PCs sold at an average price of $1,161, generating $22.54 billion in revenue. The average selling price of PCs will fall 5.4 percent per year to $881 by 2006, according to Gartner. Unit PC sales will reach 33.78 million, generating $29.77 billion in 2006.

The printer market will see the fastest price falls, with the average price declining by 8 percent per year from $243 today to $161 by 2006, according to Gartner. That fall will balance out the growth in unit sales of printers, meaning that printer revenue for vendors will remain flat over the next five years at around $3 billion per year, Gartner said.

The average price of servers will decline 6.7 percent per year, and the price of workstations will decline by 6.2 percent per year, leading to almost flat revenues for vendors in these two hardware sectors over the next five years.

China will continue to be the largest computer hardware market in Asia-Pacific and will increase its share of the market from 42 percent today to 47 percent in 2006. In 2001, South Korea was the second-largest market in the region with 14 percent of end-user spending, followed by Australia with 12 percent of the market. The top three ranking is expected to stay the same through 2006, Gartner said.

The very strong PC growth seen in Asia-Pacific over the past few years has not yet returned, due to uncertain economic conditions, lukewarm interest in Microsoft Corp.'s Windows XP operating system and a general lack of tangible reasons to upgrade. PC growth will be strongest in developing Asia-Pacific markets such as China, Thailand and Malaysia, Gartner said.

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