First-quarter PC sales in Asia-Pacific were down 29%compared to last year, as a result of a 4% drop in number of units sold combined with a shift to buying low-end systems, according to IDC figures.
The poor sales and lower profit margins will put some regional vendors under severe pressure as the economic crisis continues, IDC says.
"Price erosion is changing the dynamics of the regional PC market substantially," said Brian Kornegay, senior PC market analyst at IDC Asia-Pacific. "IDC expects market consolidation in the region to accelerate as a result of lower profit margins in an industry already coping with razor-thin margins."
Worst hit was Indonesia, where PC unit sales have collapsed from 107,000 in the first quarter of 1997 to 21,000 in the same period this year, a fall of 80%. Also badly hit were Thailand (down 50%, South Korea (down 39%), Malaysia (down 34%) and the Philippines (down 30%).
The only markets to show strong growth were India (up 31% and China (up 27%). China, already Asia-Pacific's (excluding Japan) largest PC market, now accounts for 35%of regional PC sales, up from 26.4%in the first quarter of 1997.
The two leading vendors in the region, IBM and Compaq, saw declines in shipments of 1%, and declines of 2% from the first quarter of 1997. The fastest growth was posted by China's Legend brand, which has increased shipments by 126% from 45,000 in the first quarter of 1997 to 102,000 in the most recent quarter, and now ranks fifth in the region. Hewlett-Packard Co. increased shipments by 49% in the same period to move up to third place.
IDC is expecting better conditions to prevail later in 1998, estimating that overall shipments for the year will be 5 percent higher than in 1997. But it said this forecast could be upset by slowing expansion in China, economic sanctions taken against India, or lingering social unrest in Indonesia prolonging the turnaround in other Asian markets.
COUNTRY UNIT SHIPMENTS UNIT SHIPMENTS CHANGE
Q1 1998 (in thousands) Q1 1997 (in thousands) % (98/97)
China 806 634 27
Australia 390 339 15
South Korea 281 464 -39
India 200 153 31
Taiwan 152 146 4
Hong Kong 99 90 11
Singapore 82 85 -3
Malaysia 64 97 -34
New Zealand 54 45 18
Thailand 42 83 -50
Philippines 39 55 -30
Indonesia 21 107 -80
Rest of A-P 74 102 -28
TOTAL 2,305 2,400 -4