Compaq shaky, Dell moving up in local market

Compaq shaky, Dell moving up in local market

The local PC market is accelerating at 16.5 per cent year on year, IDC research revealed last week.

However, results for quarter three 1999 were distorted by the free PC and corporate sector Y2K lockdown, said IDC analyst Logan Ringland, who estimated that both issues played a significant part in the 15.2 per cent drop in shipments for the third quarter over the previous record quarter.

`We have been forecasting this result for some time. The market always experiences a slowdown during the third quarter and this year the market has been distorted further by Y2K issues along with some extraordinary but short-lived marketing strategies such as the free PC phenomenon,' said Ringland, who expects the slowdown in the corporate sector to continue in Q4.

However small and medium businesses, as well as the consumer space, will continue to be growing markets.

`In the future we'll see more activity in the consumer space with bundling of PCs and products like printers, digital cameras and scanners. Basically, vendors and resellers will do anything to get consumers to buy PCs, especially with the GST next year, which is a real hindrance.'

Highlights from IDC research show the total PC market size at 458,000 units for Q3 with Compaq remaining in top position at 14.9 per cent despite recent difficulties. Direct vendor Dell was the only company in the top six to experience positive growth after the second quarter, taking over the number three spot from Hewlett-Packard.

Yet despite Dell's rapid growth, Ringland expects Compaq to maintain its `substantial' lead in the market. He even questions whether Dell's third spot is stable because `the Christmas period is traditionally prime time for those vendors with strong retail channels'.

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