Asia-Pacific server market down 9 percent in Q2

Sales of servers for the second quarter of 2002 in the Asia-Pacific (excluding Japan) region fell by 9 percent in revenue terms from the same quarter last year, according to research figures from IDC.

Second-quarter 2002 revenue reached US$1.35 billion compared to last year's $1.49 billion. Unit sales were 3 percent lower at 133,577 compared to last year's 137,101. The figures reflect a fall in average server price over the period from $1,086 in the second quarter last year to $1,010 for this year's second quarter.

Australia, New Zealand and Thailand were the only three countries to show revenue growth for the server market over the past year. Australia's server revenue grew 25 percent during the year, driven mainly by investments from the government and finance sectors, IDC said.

The overall market was dragged down by weak sales in the region's IT powerhouse of China. Although unit sales rose 4 percent, revenue dropped by 22 percent, as the increasing presence of local hardware vendors caused prices to fall by an average of 25 percent there. China also saw a slackening in telecommunication industry and government investments, IDC said.

Several other countries saw revenue falls of more than 10 percent over the year, including Singapore, Hong Kong, Malaysia, the Philippines, Indonesia and Taiwan, according to IDC. In Singapore, the sluggish economy, allied to consolidation in the banking sector, affected sales, IDC said.

Most organizations are waiting to confirm that the global economy is on its way to recovery before they undertake any major investments. This will mean that vendors will see increasing pressure on server prices and demand for higher value in terms of additional services, IDC said.

A recovery is expected in the second half of the year provided that the U.S. economy stays on the course of economic recovery and that there is no worsening of the recent corporate debacles which have had an impact on equity markets and corporate investments, IDC said.

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