Sun Micro sees slight revival in India server sales

CHENNAI: US network computer maker Sun Microsystems Inc.’s Indian unit saw

a slight revival in server sales in recent weeks, which should help it end the

year to June with marginal revenue growth, a top official said.

Bhaskar Pramanik, managing director of Sun Micro's fully-owned Indian

subsidiary, told reporters on Wednesday orders had picked up after dwindling

earlier in the year when Indian technology firms sharply lowered capital

spending.

"Last year we grew at over 80 per cent but this year there is no way we

can grow anywhere close to that, with the domestic market expected to be

negative," he said.

"But with our financial year beginning July, when most of the effects of

the US technology slowdown had already impacted, we have been lucky, and I still

think we will have some positive growth in the July-June period."

While Indian sales figures for server computers -- which power corporate and

government networks and the Internet -- are currently unavailable, data compiled

by market researcher IDC in September showed a severe slump in personal computer

(PC) sales growth.

IDC forecast Indian PC sales would grow about 16 per cent in the year to

March 2002, down from 56 per cent a year ago.

Company sales



Pramanik said the company's sales to the information technology sector, which
comprised large global and Indian code-writing firms, had been hit badly as

these companies cut back on big purchases. The segment had contributed about 20

per cent revenue last year.

"This year, at the market level, manufacturing segment is down, software

development is down, government spending is down but banking and financial

services and telecoms is up in India and there is tremendous activity happening

in telecom now."

India's telecommunications market is expected to see a sharp upsurge in the

current year, with an end to state-owned monopoly in long-distance telephony.

The mobile telephony market is also forecast to see a good growth in demand.

Pramanik, who did not provide any revenue figures for the Indian operations,

said Sun was still aiming to achieve sales of $1.0 billion in India within the

next eight years.

"The challenge is to retain our leadership in the Indian server market

and we don't see the current slowdown affecting our long-term growth in this

market. We are also looking to grow our services business to 15 per cent of

sales, from eight last year."

Sun, which is set to invest $50 million in its Indian research and

development operations in 2001/2002 (July-June), recently added over 70 people

at its center based in the southern city of Bangalore. The facility now employs

over 450 engineers.

(C) Reuters Limited.