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IDC Predicts a Major Sifting of Hardware Vendors in 2006

  • 04 April, 2006 10:46

<p>NORTH SYDNEY, April 4th, 2006 - As part of IDC's top 10 predictions 2006, IDC reveals that 2006 will be a critical year for many hardware vendors. The maturity and strength of the local economy has attracted a plethora of competitors that will leave many markets overcrowded in 2006.</p>
<p>The growth expectations of vendors will prove very difficult to attain and will accelerate price aggressiveness in both retail and commercial business. The short term effects are now being felt with price wars affecting many hardware markets.</p>
<p>The post holiday season and aggressive back to school specials were much more extreme than in past years. Additionally, the growth in new IT retail channels such as BigW, Kmart, and Target along with the failure of upmarket retailer MegaMart (purchased by Harvey Norman) points to the increased focus on lower price points in hardware markets.</p>
<p>Michael Sager, IDC Research Manager for Hardware, noted that, "Strong competition in hardware markets from new vendors such as Acer, Asus, BenQ, Lenovo, LG and Samsung is one of many factors that is hampering the growth of the local system builder market. This restriction of the local system builder market in 2006 is part of the movement of vendors out of the hardware market. Thousands of system builders in Australia will be seeking further support amidst heavily discounted pricing from multi-national corporations, who are seeking to grow their own share this year."</p>
<p>Mercie Clement, IDC Market Analyst for PC Hardware, stated that, "The monitor market is an excellent example of hyper competition. The drastic changes in pricing and competition has been difficult for the market. Additionally, multi-national corporation vendors such as Acer, Dell and HP are closing the technology gap with branded vendors such as BenQ, LG and Samsung. In the last 18-24 months, Auriga, Hitachi and Sharp have all exited the market and others are fundamentally changing their strategy."</p>
<p>"The overriding message for vendors and their channel partners is that 2006 will be a critical year for their survival heading into the second half of the decade. Australia is an attractive market for overseas vendors with its solid economy, English speaking background, and mature IT spending. This formula has created many hardware markets that are crowded and commoditizing, but working with a market structure from years ago when there were less competitors and margins were fatter. Those most at risk will be vendors and channel partners whose models are based on competing solely on price and do not have revenue bases to compensate along with those who represent a small share of respective markets", added Mr. Sager.</p>
<p>Join Michael Sager at IDC's 2006 Directions event on April 27th.This year's event titled "Australia's Role in a Shrinking Globe: Seizing Opportunities in a Connected World" will bring together key players from the IT&amp;T industry in an exciting one day format. Throughout the day IDC analysts will apply IDC's rigorous methodologies and analysis to discern future trends, top growth opportunities, hot vertical segments and success strategies to help you understand how to maximize your opportunities in today's connected world.</p>
<p>IF YOU WORK IN IT&amp;T YOU CAN NOT AFFORD TO MISS DIRECTIONS 2006! Visit for further information and to register.</p>
<p>If you would like further information or to purchase IDC research, please contact Gary Clarke, IDC Associate VP of Sales via email or phone 02 9925 2226.</p>
<p>For press enquiries please contact:</p>
<p>Michael Sager,
Research Manager, Hardware,
Phone: 61 2 9925 2231</p>
<p>Mercie Clement,
Market Analyst, PC Hardware,
Phone: 61 2 9925 2258</p>
<p>Click here to view the press release online:</p>
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