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Malaysia's PC market to contract for first time in 10 years, says IDC

AvantiKumar | April 15, 2009
According to latest IDC Asia Pacific tracker results

KUALA LUMPUR, 15 APRIL 2009 Malaysian client PC market is expected to contract during 2009 for the first time in 10 years, according to analyst firm IDC.

IDC Malaysia market analyst for personal systems research, Jaygan Fu Ponnudurai, said: With the continuing uncertainties of the global economic crisis, we expect the market's 2009 year-on-year growth to contract for the first time since the Asian financial crisis hit in quarter three, 1998, by 1.0 per cent.

Ponnudurai said results from IDC's Asia Pacific Quarterly PC Tracker showed that the Malaysian client PC market dropped 19.7 per cent sequentially, but grew 4.9 per cent year-on-year to reach 493,000 units in quarter four of 2008.

The significant quarter-on-quarter decline in quarter four of 2008 was due to the overall bleak market sentiments, he said. News on job retrenchments, pay cuts and businesses shutting down dramatically affected PC sales in the retail space. Malaysian consumers have opted to prolong the usage and refresh cycles of PCs in efforts to cut excessive spending.

Cutbacks to stay afloat

The commercial segment also suffered when organisations in the trading and manufacturing sector cut back on unnecessary spending to stay afloat in these torrid times, said Ponnudurai.

He said with the reduction in demand from both the commercial and consumer segments, channel partners started to actively clear surplus inventory from quarter three of 2008, through price rebates and year-end promotions, before placing new shipment orders. This change in inventory orders from channel partners led to a large contraction of PC shipments in quarter four of 2008.

In the final quarter of 2008, we saw channel partners shifting their focus from chasing PC vendors' lucrative commissions on targets, to keeping their own businesses afloat, he said. Placements of new inventory were modest and constant monitoring of account receivables to ensure timely payments from retailers and corporate resellers became crucial to the business bottom lines for most PC channel partners.

During 2009, IDC expects PC vendors and channel players to aggressively target the remaining few green fields in the market, mainly the mid to higher-income earners, who may continue to spend despite the economic slowdown. The uncertain economy will change the spending patterns of both consumers and enterprises, said Ponnudurai. Throughout 2009, IDC expects both segments to prolong existing PC usage with memory and hard disk upgrades until replacement units are absolutely necessary, causing the market to contract by 1 per cent for the year.


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