Sat, May 24, 2003 - Page 10 News List

HP worried about SARS' effect on sales within Asia

BLOOMBERG , SINGAPORE

Hewlett-Packard Co, the world's second-biggest computer maker, said yesterday that sales in Asia may be hurt by the outbreak of SARS which has curbed travel and crimped demand for its products.

Hewlett-Packard's sales force has had a hard time meeting potential customers and existing customers across Asia because of travel restrictions related to the virus, senior vice president Paul Chan said.

Consumers in countries such as China and Hong Kong, the two areas worst hit by the virus, have also put off purchases of products such as computer printers, the company said.

"The situation with SARS cannot be ignored," said Chan, who is the company's managing director for Asia Pacific, at a press conference in Singapore. "Travel has been restricted and I haven't been able to get out there as much as I like to."

Chan didn't quantify the potential impact on sales. Hewlett-Packard said SARS had little impact on its results for the quarter ended last month.

For the quarter just ended, countries in Asia Pacific excluding Japan accounted for about US$1.8 billion in sales, or 10 percent of the company's overall total.

Market researcher IDC today lowered its forecast for spending on computer-related products in Asia excluding Japan for this year to US$76.1 billion from US$77.1 billion because of SARS. Spending for the second quarter is likely to be 4.7 percent lower than previously expected, the company said in an e-mailed statement.

IDC also said that demand will likely stabilize by the fourth quarter, for which it hasn't changed its forecasts.

SARS has claimed at least 647 lives in China, Hong Kong, Taiwan and Singapore, where Hewlett-Packard's regional headquarters are located.

"I remain cautious," said senior vice president Michael Hoffman, who oversees the company's computer printer products, in an interview. "We might be affected. I don't think it will be too much, but it might be."

Demand in Hong Kong, which slumped earlier, is coming back, though it may take the entire quarter to return to previous levels, Hoffman said.

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