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IDC clocks further slowdown in industry growth rate

Growth declined from 20.9 per cent in 1996-97 to 18.1 per cent during 1997-98.

T O D A Y

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IDC attributes this drop primarily to political uncertainty in a year that saw three prime ministers in office. The report also says that in view of economic sanctions and an "uncharacteristic budget'', the IT market will continue to be under pressure during 1998-99 and grow at a slower 17 per cent.

The IDC report notes a significant growth in the Intel NT market. Personal workstations based on Intel/NT grew by 298 per cent by unit during the last year.

In its predictions for the forthcoming year, the PC market is expected to be buoyant, with home and small business expected to drive growth. There is expected to be an accelerated shift toward Intel/NT across systems.

The Internet subscriber base is also expected to double from 90,000 subscribers in 1997- 98.

IDC also reported that the slump in the Asia-Pacific PC market continued into the first quarter of 1998. PC shipments decreased by 4 per cent over the corresponding period last year.

The quarter saw continued price erosion and increased pressure on margins. Unit shipments fell by 4 per cent over Q1 1997 and revenues decreased by 29 per cent.

According to IDC, the reason for the decline in revenue was the popularity of sub-$1,000 PCs, heightened price sensitivity in markets plagued by economic crisis and the expanding regional role of China and India where the average system prices tend to be lower than in more developed countries.

"Price erosion is changing the dynamics of the regional PC market substantially,'' according to IDC. "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. Increasingly, vendor success will depend on market coverage with regard to product offerings, geographical scope and end-user segment distribution.''

- Compiled from the Indian media

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