CIOL:Bdesh PC/server market breaks all barriers

SINGAPORE: The Bangladesh PC/Server market registered a growth of 27.5 per cent to 54,522 units in Q2 2006 (April-June) as compared to Q2 2005, according to Springboard Research.

The strong growth in the quarter was mainly driven by the increased IT spending by the government, telecom companies and financial institutions.

Additionally, the good performance of Bangladesh economy in Q2 2006 helped accelerate the country’s overall IT market, with the economy registering a full year GDP growth of 6.7 per cent in FY 2006 (July-June).

Nevertheless, increasing political tensions coupled with a rising power crisis in Bangladesh are the main challenges for the economy, which in turn could drain PC/Server market growth.

Among MNC PC vendors, HP led the market with 15.5 per cent share of total PC shipments in Q2 2006, followed by Dell and Lenovo. Among local branded players, Daffodil and Flora are the major manufacturers of PCs in Bangladesh with a collective desktop market share of 5.6 per cent in the same period.

Although, the unbranded/white box market is the competitive leader in the desktop market, it experienced a decline in market share to 69.9 per cent during the quarter. The aggressive pricing strategy followed by MNCs and local vendors’ affected the assembled market to an extent.

Among all product categories, the notebook market experienced the highest growth of 37.1 per cent annually in Q2 2006 followed by desktop and X86 server segments.

“With increasing competition and reducing prices, we expect the segment to continue leading the overall PC market in 2007 as well”, noted Manish Bahl, senior analyst of Springboard Research.

PC/Server consumption in the country continues to be dominated by the government and large corporate sectors such as telecom, banking and financial services in Q2 2006. The ongoing trend of automation of government departments generated substantial business opportunities for MNCs and local players in the second quarter of 2006.

Under the new fiscal budget announced in June 2006, the Bangladesh government accorded the highest priority to the education and IT sector, with an allocation of $1.6 billion, 20 per cent higher than the previous fiscal year budget.

“Bangladesh is one of the fastest growing economies in South Asia. Recently, the government’s increased focus on the IT sector and investments from multinationals have led to the sector experiencing strong growth in the country. However, political transition before the next general election scheduled in January 2007 will be a major challenge to the country's macroeconomic stability. If the current political situation improves and stabilizes, the market can grow faster than expected,” added Bahl.

For 2006, Springboard Research has slightly increased its forecast for the Bangladesh PC/Server market due to the greater than expected performance of Q2 2006. Springboard expects the PC/Server market to grow 23.0 per cent as compared to the earlier forecast of 22.1 per cent in 2006 and then growth will slow in 2007 due to the unstable political condition.

The year 2007 will play an important role in giving a new dimension to the country’s economic and business outlook, Springboard Research said.

© CyberMedia News

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