Fri, Jan 07, 2005 - Page 11 News List

PC industry expecting growth to slow this year

By Amber Chung  /  STAFF REPORTER

The outlook for the nation's PC market this year may not be as rosy as last year, given slower than expected demand , an official at Hewlett-Packard (HP) Taiwan Ltd said yesterday.

"New demand and replacement demand are slacker than estimated," Dennis Chen (陳敬宏), general manager of HP Taiwan, said on the sideline of a press conference yesterday.

Lackluster business during "IT Month" last month, which is always taken as a leading indicator of market demand, tended to strengthen pessimistic forecasts, he added.

The industry expects a growth rate of around 16 percent this year, down from more than 20 percent on average in the past, Chen said, projecting a 15-percent increase in sales volume for HP this year.

Taiwan saw sales of between 580,000 and 600,000 laptops last year, according to figures compiled by the semi-official research house Market Intelligence Center (MIC, 市場情報中心).

HP, the fourth largest player having a 14 percent share of Taiwan's notebook market, has vowed to surpass another foreign vendor IBM Taiwan Corp, the third largest player with around 15 percent market share, this year, after IBM sold its PC business to China's largest PC maker, Lenovo Group (聯想), last month.

"We are a `real American brand'? and will become the No. 1 foreign PC company since our competitor is surrendering their marketplace," said Rosemary Ho (何薇玲), managing director of HP Taiwan.

"We really don't see the synergy of the merger [between IBM and Lenovo]," Ho said.

It is doubtful whether the newly merged company can keep offering full product lines and global after-sale services to fulfill demand from both cooperative distributors and consumers, she said.

HP has been trying to poach IBM's local distributors to which end it convened a meeting earlier this week with over 200 distributors, Chen said. The company plans to hold two more meetings to talk to other distributors across the nation.

A market watcher said they had seen worries among IBM's local distributors about the lack of clarity for the future, following the merger deal, despite the company's assurance of no changes in business transaction and market strategy.

"We don't expect to see a large shift among distributors in the next year and a half, though there remains a possibility for HP to knock down IBM this year, given that IBM's personnel changes after the deal could in turn affect some ongoing and future projects," Helen Chiang (江芳韻) an analyst at MIC, said yesterday.

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