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Tue, May 13, 2003 - Page 12 News List

New software sales orders are being deferred in Asia

HOME ALONE The head of Oracle's operations in the region has said that the biggest problem is a lack of staff at tech firms to discuss making deals

AFP AND DPA , BEIJING AND SINGAPORE

The SARS epidemic is having a damaging effect on software sales in Asia with many new orders "slowing down or being deferred," the Financial Times reported, citing the head of Oracle's regional operations Derek Williams.

Although Williams added that it is too early to conclude that Oracle's revenues will suffer significantly as a result, his comments send a chilling message about slumping orders for foreign technology firms with big Asia export orders, the newspaper said.

Many potential customers are operating with a skeleton staff and therefore are simply not available to talk about new orders, said Williams.

"It's very disruptive indeed," he added. "There's no-one to talk to."

The company's pipeline of potential deals was "solid" at the start of the quarter, the Oracle executive said, but added that the question is how many deals could be closed.

Other tech firms have suggested that SARS is beginning to affect business in the region but Oracle will be watched particularly closely due to its relatively high exposure in Asia.

Around 20 pct of its revenues from new licenses, the key measure of a software company's performance, come from the region.

Oracle's fourth fiscal quarter also ends this month, putting it on a different timetable to other tech companies, and a large portion of its sales are typically concluded in the final weeks of a quarter.

Together, these factors make it one of the first big tech firms to report earnings that bear the full brunt of the SARS outbreak, the newspaper said.

The setback from the spread of SARS "may mean that `international companies' reassess their strategies" in Asia, Williams said.

The Oracle executive added that there "could be an impact on foreign direct investment in China."

Meanwhile in related news, personal computer (PC) sales across 10 Asia-Pacific countries numbered 5.4 million worth 6 billion US dollars in the first quarter of this year, up 5.2 per cent in unit sales year-on-year, researchers said yesterday.

With 2.17 million PCs sold, China accounts for 40.2 per cent of the region's PC market, said a Gartner-Dataquest report.

South Korea saw a drastic 22.2 per cent fall in the first quarter, with over 716,000 units sold.

"North Korea's nuclear standoff, a major financial scandal and the war in Iraq have negatively affected the Korean economy," analyst Lillian Tay said.

Both Singapore and Hong Kong are expected to see strong growth in PC sales in the third quarter after a dip in the first and second following the SARS outbreak.

"But now that preventive measures have been put in place, people feel more confident moving about," Tay was quoted as saying.

"We thus see some demand coming from the business sector, especially for mobile PCs," she added.

Across the region, US giant Hewlett-Packard maintained a strong hold with 11 percent market share, keeping its second spot.

China's Legend emerged first with 11.6 percent share.

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