Asian PC Market Bounces Into The Millennium With A Record High, IDC Says

FRAMINGHAM, MA – MAY 15, 2000 — For the sixth consecutive quarter, the Asia/Pacific (excluding Japan) PC market expanded to post another quarterly shipment record in Q1 2000, according to preliminary results released by IDC Asia/Pacific. Total regional PC shipments amounted to 4.24 million units in the first quarter, surpassing volumes from the previous year's first quarter by more than 43% and 5% over Q4 1999. Although countries such as Australia, Vietnam, and Malaysia experienced seasonal dips, the overall market was boosted by Korea's and India's sequential shipments in particular, as well as support from China and Singapore.

PC shipments were buoyed by the Internet PC program in Korea, an initiative led by the government to boost PC ownership among lower-income groups. This government-advocated drive was most pronounced in Korea but was also prevalent in other Asian economies as governments continue to look upon developing technology usage as a means of sustained economic recovery. Fears that Y2K would continue to dampen PC demand in the first quarter were unfounded as businesses quickly resumed spending. Low PC penetration rates continued to accelerate demand while the widely publicized processor shortage seemed to have minimal impact.

"Much political support has driven growth in key Asian markets, namely through Korea and China, and this has heavily contributed to Asia/Pacific's sustained growth," said Davina Yeo, senior analyst at IDC Asia/Pacific. "After these government-sponsored rallies, IDC expects the regional PC market's momentum to continue at the same aggressive pace."

Competitively, Samsung leapt over both IBM and Legend to lead the regional PC market in Q1. Despite not having a place in the Korean government-led Internet PC program, Samsung owed its success to its "Academy Campaign," a program targeting higher PC ownership among students. The vendor's shipments of approximately 384,000 units represented a hefty increase of 36% from the previous quarter and bolstered the Korean vendor's market share from 7% to 9.1%. However, compared to Samsung's stellar performance, the remaining top five regional vendors' results were relatively lackluster with zero to negative sequential growth rates.

China's Legend had two outstanding quarters of phenomenal growth that earned it regional leadership in Q4 1999, but the vendor's momentum could not be sustained in Q1 2000. Although year-on-year growth was 122%, compared with the previous quarter, unit shipments dipped by 2% to 360,600 units, equating to 8.5% market share. IBM held on to 7.2% market share, and although the vendor experienced slight negative growth overall, its slide was tapered by positive growth in Korea, China, and Indonesia. Compaq's shipments also declined, ceding 0.8% market share from Q4 1999 to 6.0%, although maintaining the fourth-place position in Q1 2000 with 254,400 unit shipments. For Hewlett-Packard, Q1 2000 was a zero-sum game. Despite an admirable performance across India, Singapore, Hong Kong, and New Zealand, a 33% slump in its largest market from the previous quarter, the PRC, resulted in shipments remaining stagnant with 227,300 units shipped and 5.4% regional market share.

Market Highlights

The top five country rankings in Q4 1999 remained the same in Q1 2000. Most noteworthy was Korea's 36% quarterly increase that enabled it to cross the 1 million-unit shipment mark for the quarter. In doing so, Korea consolidated its second-place ranking, and at the same time captured an additional 5% market share to 24.6%. In comparison, the country with the largest market share, the PRC, grew at a slower rate of just 2%, but nonetheless maintained 32.4% market share, down from 33.8%. In third place, Australia turned in a disappointing first quarter, dropping by 17% to 440,000 from 530,000 units as commercial spending slowed on news that the July 1st GST implementation could mean substantial business savings. This led to Australia shedding 3% market share to 10.4%. India made consistent progress to keep fourth place, finishing 13% up from 300,000 to 342,000 units, and Taiwan rounded up the top five countries in Asia/Pacific.

These findings stem from IDC's Asia/Pacific Quarterly PC Tracker. To purchase this service, please contact Kristin Williams at 949-442-4008 or by email at kawilliams@idc.com. For more information on IDC Asia/Pacific's research offerings, please contact Beth Freedman or Lisa Bloom at 508-872-8200. Table 1 AP (Ex. Japan) PC Shipments, First Quarter 2000 by Vendor(Thousands of Units)

Vendor Q1 Share Q4 Share Q1 Share Q100/ Q100/

1999 1999 2000 Q199 Q499

Samsung 173 5.9% 279 7.0% 384 9.1% 121.7% 37.6%

Legend 174 5.9% 369 9.2% 361 8.5% 107.2% -2.2%

IBM 256 8.7% 322 8.1% 306 7.2% 19.5% -5.0%

Compaq 221 7.5% 271 6.8% 254 6.0% 15.4% -6.2%

Hewlett- 150 5.1% 227 5.7% 227 5.4% 51.4% 0.3%

Packard

Others 1,984 67.1% 2,528 63.3% 2,709 63.9% 36.6% 7.2%

Total 2,958 100.0% 3,996 100.0% 4,243 100.0% 43.4% 6.2%

Source: IDC, 2000

Table 2

AP (Ex. Japan) PC Shipments, First Quarter 2000 by Country

(Thousands of Units)

Country Q1 Share Q4 Share Q1 Share Q100/ Q100/

1999 1999 2000 Q199 Q499

PRC 1,021 34.5% 1,350 33.8% 1,374 32.4% 34.6 1.7%

Korea 424 14.3% 769 19.3% 1,043 24.6% 146.0% 35.5%

Australia 483 16.3% 531 13.3% 442 10.4% -8.4% -16.7%

India 269 9.1% 302 7.6% 342 8.1% 27.4% 13.3%

Taiwan 195 6.6% 274 6.9% 269 6.3% 37.8% -1.7%

Hong Kong 107 3.6% 143 3.6% 148 3.5% 38.9% 3.6%

Malaysia 93 3.1% 167 4.2% 141 3.3% 52.5% -15.5%

Singapore 106 3.6% 106 2.6% 120 2.8% 13.4% 13.1%

Thailand 74 2.5% 102 2.6% 103 2.4% 39.7% 0.9%

Indonesia 44 1.5% 85 2.1% 94 2.2% 111.2% 9.9%

New Zealand 75 2.5% 70 1.8% 76 1.8% 0.9% 7.8%

Philippines 43 1.5% 59 1.5% 64 1.5% 48.9% 8.4%

Vietnam 26 0.9% 37 0.9% 27 0.6% 2.4% -27.5%

Total 2,958 100.0% 3,996 100.0% 4,243 100.0% 43.4% 6.2%

Source: IDC, 2000

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