The third quarter saw the Australian PC market fall by 15.3 per cent compared to the previous quarter, although local annual shipment growth increased during the period by 16 per cent, according to analyst International Data Group (IDC).
Yet the Australian market was not indicative of the Asia-Pacific as a whole, which recorded 41 per cent annual growth in the third quarter, 5 per cent up from the second quarter and the highest figure generated in four years.
In fact, Australia and New Zealand were second last and last respectively when measured on annual shipment growth in the third quarter, with New Zealand experiencing a paltry 10 per cent growth.
`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 Logan Ringland, IDC's PC analyst.
Comparatively, Australia's Asian neighbours are undergoing phenomenal expansion with Indonesia, for example, establishing a 330 per cent annual growth rate in the third quarter and China maintaining its position as the largest market, accounting for 37 per cent of all PCs shipped in the region.
According to IDC reports, this growth has been facilitated by Asia's economic recovery, PC price erosion, Internet proliferation and low PC penetration rates.
And PC manufacturer Legend has taken advantage of these forces to snatch the lead in the regional market with an 8.5 per cent share, knocking IBM off its pedestal to 7.8 per cent.
With Legend focused mainly on China, IDC research manager Kitty Fok attributed its success to aggressive pricing and brand awareness.
Compaq ranked third in market share, and its sequential growth of 5 per cent was bettered only by Legend among the top five vendors.
Hewlett-Packard and Samsung were fourth and fifth respectively, with both vendors increasing volumes shipped by 50 per cent over the same quarter last year, though volumes were down over the second quarter this year.
Ringland is predicting that the PC market will pick up again in the fourth quarter, shipping about 486,000 units in Australia.
This will partly be fuelled by the failure of a Y2K lockdown to materialise and because of a general uptake of technology by small and medium businesses as well as home users, said Ringland.
He believes the PC market will continue to grow strongly in 2000 after a slow start, with issues such as the GST and the Olympics impacting the market.