U.S. White Box Market Seizes Opportunity In Troubled Times

FRAMINGHAM, MA – MARCH 18, 2002 – As IT spending cuts continue to batter a hobbled PC industry, the U.S. white box market is holding its own. According to findings from IDC's recently completed study, The White Box Opportunity — IDC's U.S. White Box PC Market Study, unit shipments in the nonbranded PC and PC server market equaled 13.7 million in 2001 and that number will climb to 16.7 million in 2005.

"Recent economic and world events have taken a toll on the white box market," said Roger Kay, IDC's director of client computing. "However, white box suppliers have done generally better than the second- and even first-tier branded suppliers." Since the bottom fell out of the branded PC market at the end of 2000 and PC surplus mounted, Microsoft and Intel reported healthier- than-average sales to "system builders" and "distribution" segments, respectively. "In periods of oversupply, spot buying is effective, and white box vendors can easily beat the big brands on component costs," Kay said. "A large part of the white box value proposition is price competitiveness and these vendors are taking advantage."

Key Findings:

SIAS (standard Intel architecture servers) will account for a slowly increasing portion of all U.S. white box sales;

Complex assembly issues have kept notebooks from becoming a competitive factor in the white box market. However, some vendors are showing increased interest;

All white box vendors assemble complete systems that are end-user ready;

The highest revenue stream for white box vendors comes from hardware sales.

IDC's study, The White Box Opportunity — IDC's U.S. White Box PC Market Study, presents the results of executive interviews with white box players and gives a definitive picture of the market, including an updated forecast to 2005.

To purchase this study, contact Jim Nagle at 508-935-4549 or email jnagle@idc.com.

About IDC

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 www.idc.com. IDC is a division of IDG, the world's leading IT media, research and exposition company.

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