Asian PC Market Surges to Over 14.1 Million Units in 1999, IDC Says

FRAMINGHAM, MASS., FEBRUARY 15, 2000 – According to preliminary results released by IDC Asia/Pacific, the AP (excluding Japan) PC market surpassed 14.1 million units in 1999 for an increase of 35.1% over 1998. The 1999 PC shipment total was the highest annual figure ever recorded and a complete rebound from the previous two years when the economic crisis held back PC expansion.

The greatest market accelerator in 1999 was undoubtedly Asia's economic recovery. With economic improvement came lower interest rates, greater consumer and business confidence, strengthening regional currencies, surging stock markets, and heightened commercial spending on PC equipment. Furthermore, Internet proliferation, price erosion, and low PC penetration contributed to the market's momentum throughout the year. Not even a Y2K spending lockdown in the fourth quarter could slow PC market growth. While there was a Y2K sales disruption in the large and medium business sectors of developed markets in the fourth quarter, strong buying from consumers and small businesses offset the impact. Consequently, shipments in the fourth quarter of the year were up 9.1% over Q3 1999 and 38.6% annually.

"After two very tumultuous years, the Asian PC market returned to the fast track in 1999," said Kitty Fok, research manager at IDC Asia/Pacific. "Looking forward, conditions such as low PC penetration, particularly in vast untapped markets like China and India, falling prices, growing awareness, and the Internet will enable Asia to regain its position as the hottest PC market in the world."

Competitively, IBM reclaimed the market's top spot in 1999 as its market share increased from 8.1% to 8.4%. IBM's strength in the region's largest markets bolstered its regional advances. Compaq was bumped to the second-place rank in the region with market share of 7.3% for the year; however, the world's largest PC vendor remains a leading competitor in most of Asia's country markets. Legend's volumes surged over 79% in 1999, which enabled the Chinese vendor to claim the third-place rank and 7.1% market share. Likewise, fourth-ranked Samsung's shipments rode the wave of Korea's economic recovery in 1999 as volumes increased more than 78%. Both Legend and Samsung depended almost exclusively on their domestic markets — the PRC and Korea, respectively — to attain their regional standings in 1999. Despite its ability to gain share, HP dropped from third place in 1998 to fifth place in 1999 with 5.4% market share. HP's regional position was damaged by the strong performances of Legend and Samsung in their captive markets. Among other vendors, Dell and Founder turned in the strongest performances in 1999 with growth of 87% and over 98%, respectively. Dell's success hinged on the continued momentum of its direct sales model in Asia while Founder's regional standing was supported by its gains in China.

Market Highlights

In contrast to 1998, every country market generated positive annual growth in 1999. The annual growth rates ranged from a low of 12.1% in Vietnam to a high of over 273.1% in Indonesia. Growth in markets such as Indonesia, Korea, and Thailand was artificially high because these markets experienced the worst conditions during the regional economic crisis. All regional markets are now back up to pre-crisis levels with the exception of Indonesia and Thailand. Among the region's largest markets — China, Korea, and Australia — Korea contributed the most to regional growth with an annual shipment increase of 79.2%. As a result, Korea regained its position as the region's second-largest market. An economic resurgence, consumer PC demand, and a government program in Q4 to bring low-priced computers to the masses supported growth in Korea. PC growth in the PRC was more moderate in 1999 with a 25.6% annual gain; however, with over 34.9% of regional demand, China's growth bolstered the regional rebound. Likewise, 14.2% growth in the mature Australian market contributed considerably to Asian PC demand. Finally, India replaced Taiwan as the region's fourth-largest market in 1999 as shipments surpassed 1 million units for the first time. Growth of over 42% in India was supported by consumers, small businesses, and falling price points in a particularly price-sensitive market.

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.

About IDC

IDC delivers dependable, relevant, and high-impact data and insight on information technology to help organizations make sound business and technology decisions. IDC forecasts worldwide IT markets and technology trends and analyzes IT products and vendors, using a combination of rigorous primary research and in-depth competitive analysis. IDC is committed to providing global research with local content through more than 500 analysts in 43 countries worldwide. IDC's customers comprise the world's leading IT suppliers, IT organizations, and the financial community. Additional information can be found at http://www.idc.com.

IDC is a division of International Data Group, the world's leading IT media, research, and exposition company.

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