IDC Reports – Australian PC Market Struggles in Quarter 2
NORTH SYDNEY – JULY 25, 2001 – IDC Australia today announced that the Australian PC market has had another less than impressive quarter with PC sales really struggling. Year on year the market has fallen by 10.1 percent over Q2 1999, unlike last year, it was not the larger organisations holding off purchasing. IDC has discovered that it was consumers this time around that have not purchased PCs.
Logan Ringland, IDC Senior Analyst, Computing Hardware, said "Corporate spending was still reasonably solid, however it also failed to reach its potential. Sequentially, the market was up, however given the fact that Q2 is typically the strongest period of the year, it is a concern to see the market swelling by only 10.5 percent."
"At the current rate of sales, it is hard to see the market growing at all over last year. This would be the first time in IDC Australia's recorded history that the market has failed to achieve growth if it were to occur. If we compare 1H00 to 1H01, the market is about 3 percent down this year round, and we have to remember that the second half of 2000 was quite strong with nearly 1.2 million units coming from it."
"Compaq remained as the number one vendor in the Australian market and managed to grow its market share growing at a faster rate than its competitors. The vendor will be breathing a sigh of relief that it has now regained market exposure through Harvey Norman. But it is not going to do them much good at the moment as the consumer market continues to hold off purchasing."
"For the second quarter in a row, Dell has completed the quinella behind Compaq, managing to maintain their market share. IBM continues to struggle with sales managing to increase by only 5 percent sequentially, helping it to retain third position. At least its sales are moving in the right direction now which is more than can be said for HP."
"The vendor has managed to avoid to this point, the major recession in the market, however all good things come to an end with HP's sales sliding to a level not seen since the start of 1999. Toshiba has managed to limit its decline in sales well in the post education-purchasing season for another half-year, helping to consolidate its fifth position in the market", added Logan Ringland, IDC Senior Analyst, Computing Hardware.
Total Market 525,000 units
"The question must therefore be asked why is the market in such poor shape? Especially given the noise being made by the government about all the economic indicators being on the rise. Although there are only just over 10 million PCs installed into the local market. It appears as if this is acting as somewhat of a hindrance for the overall growth of the market."
"It means that there is a certain degree of maturity and dare I say it, saturation starting to appear. This is not a good sign for continued growth of the local market. It means that the majority of those organisations or consumers that want a PC have one. In order to entice the remaining folk to purchase, vendors are going to have to do a lot of research to find out exactly what they want, whether it be bundle, technology, form factor or price wise. Toshiba is an example of this by providing a wireless LAN card into one of its notebook, " commented, Logan Ringland, IDC Senior Analyst, Computing Hardware.
IDC found that consumer and commercial buyers alike have seen little in the current market that is enticing them to upgrade their systems. The majority of commercial users, use the PC for word processing, spreadsheet manipulation, email and accessing the Internet. Therefore, a complete system upgrade appears to be a bit of overkill. IDC believes that until there is a true value proposition for upgrading to a new system, the market may be restrained.
"I have found that end-users are waiting for the next technological wave before they upgrade, and a processor is no longer being considered an upgrade. This illustrates an increased understanding of the IT from the public in general," said, Logan Ringland, IDC Senior Analyst, Computing Hardware.
According to IDC, another factor that could have slowed down purchasing during the second quarter of the year could be GST. As the tax year finishes, so do the payments (for the last financial year) and therefore its time for a tax return to be completed. If the company has over estimated their GST repayments, then they are going to receive a refund from the government. This means that we could see smaller organisations particularly, looking to change their seasonality so that they purchase any IT requirements once these refunds are realised. This could mean that the seasonality changes, will see Q3 as a more significant period of the year than it has historically been.
In these difficult financial times, IDC is seeing a tightening of belts across all levels of expenditure and IT has not escaped. If consumers and commerical users don't absolutely need it, then they are't buying it.
IDC is the foremost global market intelligence and advisory firm helping clients gain insight into technology and ebusiness trends to develop sound business strategies. Using a combination of rigorous primary research, in-depth analysis, and client interaction, IDC forecasts worldwide markets and trends to deliver dependable service and client advice. More than 700 analysts in 43 countries provide global research with local content. IDC's customers comprise the world's leading IT suppliers, IT organizations, ebusiness companies, and the financial community. Additional information can be found at http://www.idc.com.au