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IBM widens lead in Asia server race

Big Blue sees particularly strong Unix server sales in China, outpacing competitors to take the No. 1 spot in the overall server market in the Asia-Pacific region.

Despite poor economic conditions, IBM significantly outpaced competitors to take the No. 1 spot in the overall server market in the Asia-Pacific region, excluding Japan, last year.

In 2001, IBM chalked up a 34.4 percent share, or $1.96 billion of the region's server market, which includes Unix and Intel-based systems. This was an increase of almost 5 percent from 2000 in terms of both market share and revenue, although the tech malaise had taken a toll on Big Blue's rivals.

In last year's second position was Hewlett-Packard with a market share of 18.6 percent, overtaking second runner-up Compaq Computer marginally by 0.5 percent.

However, HP registered lowered sales of $1.06 billion, compared with $1.09 billion in 2000. HP merger target Compaq also saw revenue dip year over year to $1.03 billion from $1.21 billion.

"Success in the pSeries (Unix/AIX servers), which contributed 32 percent of IBM's total server revenues, was key to its good performance in 2001," said Avneesh Saxena, IDC Asia-Pacific director of Computing Systems.

IBM displaced Sun Microsystems to claim the No. 1 position in the regional Unix server segment last year, with a 30 percent share, or revenue of $810 million. This was compared with a share of 24.6 percent, or $738 million in revenue a year ago.

IBM's Unix server sales were particularly strong in China, which accounted for more than 40 percent of its total Unix server business in the region. This was due to an increased number of channel partners in the mainland to drive the sales of its sub-$50,000 and sub-$100,000 products to small- and medium-sized companies.

"Such progress in China--the only healthy market last year--was not seen by HP and Compaq," Saxena said. He noted that both HP and Compaq were also relatively weaker in the entry-level Unix and Intel-based server segments compared with IBM.

However, HP took the lead in the midrange and high-end Unix server segments in Asia-Pacific (including Japan) last year, with revenue shares of 32 percent and 35.3 percent, respectively.

"HP's midrange and high-end Unix server segments grew faster than the total market (for systems priced over $100,000) in 2001," Saxena said. "While the Superdome and rp7400 contributed largely to the company's success, rp8400 will help strengthen its position moving forward."

As for Compaq, Unix server sales were hit by the company's decision last June to sell the intellectual property of its Alpha processors to Intel. "Customers were insecure about Compaq's products as the company is phasing out its Alpha line," Saxena said.

Compaq's server shipments could also be affected by its proposed merger with HP, which created uncertainties in the market, Saxena added. "There is also a general impression that Compaq will be acquired by HP."

Compaq shareholders approved the deal on Wednesday. Compaq CEO Michael Capellas said that its shareholders appeared to have voted 9-to-1 in favor of the merger with HP. And HP on Tuesday declared victory in the merger, although the official count of votes has not been completed.

Irene Tham reported from Singapore.