The PC industry will lose at least $1.5 billion in sales this quarter as a result of the Asian economic crisis.
A new report from research firm IDC offers little eastern promise to PC makers,estimating the crisis will cause Asia's PC market to shrink by 13 per cent to $9.7 billion. Forecasts are equally gloomy about demand in the first half of 1998.
Blame is laid on rising import prices, inflation, unemployment, bankruptcies and uncertainty over elections around the region next year. The crisis continues to worsen as the Korean won plummets against the dollar, taking computer-related stocks down with it.
Samsung, which recently overtook Compaq as the largest PC maker in the Asia-Pacific region, admits it faces a very tough year.
A spokesman at headquarters in Korea, Mika Sarkkinen, said: ?We expect next year to be very difficult in Korea and many parts of Asia. Demand for all electronics is projected to be weak as people are tightening up their belts.?
He could not specify yet how the turmoil would affect corporate plans for the year ahead. ?It is too early to speculate on our plans for the next six months as the situation here changes daily," he said, but added that Samsung will not be adjusting its forecasts until ?the situation here stabilises.?
Hewlett Packard is equally cautious. Spokesperson Larry Sennett said: ?Our perspective is that it is way too early to call. We have little exposure in Japan and limited exposure elsewhere. However, if the current Asian situation were to spread to China it would create concern as it is our fastest growing market.?
Fellow US vendor Dell has not been deterred by the crisis from wanting to expand in the region. ?We want to increase our international presence over time,? said Frank Milano, financial analysis programme manager for the company.
?30 per cent of our revenue is from the international markets. If you were to look at the big three - IBM, Compaq and Hewlett Packard - 55 per cent of their revenue is from overseas and we would like to move more towards an international mix.?
To achieve this Milano believes: ?You have to look at the Far East with enthusiasm. India and China have the biggest potential for penetration. In 2001 PC growth projections have predicted there will be two people per PC in the US and four for every PC in Europe. In the Asia-Pacific region it?s 33 people per PC. That?s a huge growth opportunity.?
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