Tech Industry

Server market drops in Asia

Price erosion coupled with the region's financial crisis caused server revenues to fall in the second quarter.

The server market is the latest casualty of the Asian economic crisis, as revenues in the region have declined 20 percent, according to a market study.

Southeast Asia and Korea inflicted the most damage on the market in the first half of the year. But the sharpest declines were in Indonesia, Thailand, and Malaysia, the International Data Corporation study said, contributing to the $400 million loss in the region's market. The market study spanned the Asia and Pacific region.

Korea's economy had the single largest impact on server revenues with a 52 percent drop. Korea accounted over 25 percent of the server market in 1997, dropping to below 16 percent.

Server shipments actually increased for the overall region by 12 percent during the same period. But despite increases, price erosion coupled with the financial crisis ravaged market conditions and caused the drop in revenues.

While market growth slowed, it also consolidated, with leading vendor IBM taking 29 percent, up from 25 percent.

Hewlett-Packard took second with more than 20 percent, and Compaq followed with nearly 20 percent. Sun Microsystems and NCR finished last with 11 and 2 percent respectively. The study did not mention their changes in market share.

Printers markets were also stung by Asian economies. As previously reported, spending trends on printers also went south. Printer shipments dropped 8.7 percent for the second quarter of 1998, according to a Dataquest report.

While servers in the Asia and Pacific regions are in steep decline, worldwide markets are projected to double in revenues, according to a Dataquest study, with vendors Sun and HP leading the way.