Gartner Says Asia/Pacific Server Revenue Increased 7 Percent in the First Quarter of 2003
Australia, South Korea and India Show Positive Growth While Singapore and Hong Kong Server Revenue Declines
SINGAPORE, September 1, 2003 — Server revenue in Asia/Pacific outside of Japan totaled $1.21 billion in the second quarter of 2003, an 8 percent increase from the same period last year, according to Dataquest Inc., a unit of Gartner, Inc. (NYSE: IT and ITB).
"Despite, war, severe acute respiratory syndrome SARS and general uncertainty, it appears that some of the regional powerhouses have finally got back on with the job of enhancing infrastructure," said Matthew Boon, vice president for hardware and systems research at Gartner. "These growth rates are an encouraging sign that the Asia/Pacific server market is entering a growth phase."
China continued to be the No. 1 country for server revenue in Asia/Pacific with 31 percent market share, experiencing an 11 percent rise in revenue (see Table 1) compared with the second quarter of 2002. The impact of SARS was experienced mainly in the services sector. Other sectors have remained fairly resilient to this. Continuous investment by the government in building the IT environment has helped to contain the overall impact on server revenue for China.
However, Hong Kong seemed to be the worst affected by SARS, recording a revenue decline of 29 percent. South Korea registered a marginal rise of 2 percent, showing little or no signs of recovery.
Table 1
Asia/Pacific Server Vendor Revenue Estimates by Country in 2Q03 (U.S. Dollars)
Market
2Q03 Revenue
2Q02 Revenue
Growth (%)
China
382.35
345.12
10.8
South Korea
258.18
253.34
1.9
Australia
207.13
178.19
16.2
India
74.92
56.20
33.2
Taiwan
74.39
72.26
2.95
Singapore
53.46
51.35
4.1
Hong Kong
39.25
55.00
-28.6
Rest of Asia/Pacific
129.97
120.66
7.7
Asia/Pacific
1,219.65
1,132.12
7.7
Source: Gartner Dataquest (September 2003)
The Indian server market experienced revenue growth of 33 percent in the second quarter of 2003 compared with to the second quarter of 2002. "The Indian market has seen significant growth in revenue, especially from the Intel-based servers in the first half of 2003," said Vinod Nair, industry analyst for hardware and system research at Gartner. "Constrained budgets and the tough economic situation had squeezed the server market last year, and the transition of preference to midrange servers and thereby higher price bands, also contributed to better revenue for vendors."
The Singapore server market posted a slight growth of 4 percent in the second quarter. "Growth was driven by Intel-based servers that saw steep discounts to stimulate demand," said Suzie Low, industry analyst for Gartner. "As a result, the midrange servers had the highest growth rates among all categories."
Australia managed to grow 16 percent, compared with the same period last year, as many organizations hit the critical replacement cycle phases with growth coming from the government and small and midsize business (SMB) sectors.
From a vendor perspective, IBM and Hewlett-Packard managed to increase their market share results over last year. Both vendors registered yearly growth of approximately 11 percent. IBM grew in all major markets in the region except Australia, while HP's revenue declined marginally in South Korea and Singapore.
Sun Microsystems continued to lose market share, as it suffered a revenue decline of about 5 percent over last year. "In a fiercely price-competitive market, Sun managed to increase shipments significantly. However, this growth at the low end is not enough to hold up revenue at the high end," Boon said. "Sun really needs to get focused at the big end of the market and increase sales of its profit-rich high-end systems while also more clearly articulating just what its long-term strategies are."
Dell emerged as the clear winner, increasing its market share from 3.5 percent to 4.9 percent. Dell managed significant growth in most of the large markets with substantial growth in China (see Table 2).
Table 2
Asia/Pacific Server Market Share Estimates for 2Q03 based on Revenue (All Servers)
Region
2Q03 Market Share (%)
2Q02 Market Share (%)
IBM
35.8
34.6
Hewlett-Packard
31.2
30.2
Sun Microsystems
16.4
18.6
Dell Computer
4.9
3.5
Legend
1.5
1.3
LangChao Electronics
1.3
1.5
Fujitsu
1.2
0.8
Other Vendors
7.7
9.5
Total Market
100.0
100.0
Source: Gartner Dataquest (September 2003)
Detailed statistics are available to clients of Gartner's Servers Quarterly Statistics program. This program offers a comprehensive, global market information service that analyzes and documents the server and workstation industries. This report, when available, can be purchased on the Web at www.gartner.com.
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