Asian server market shows recovery signs

HONG KONG: The drop in sales of computer servers in the Asia-Pacific region

outside Japan narrowed to seven per cent in the first quarter of this year from

a year earlier -- a sign that the worst for the sector might be over, research

firm IDC said on Monday.

Singapore was the only market out of twelve where spending on servers grew in

the period. Hong Kong and Malaysia led the decline, with spending falls of close

to 30 per cent, IDC said. Massachusetts-based International Data Corp (IDC) said

a "bleak economic environment" continued to undermine spending on

servers -- multi-user network computers -- in the three months ended March 31.

The decrease in sales, however, was an improvement from year-on-year drops of

19 per cent in the third quarter and 14 per cent in the fourth quarter in 2001,

indicating a market recovery is afoot, IDC said. IDC said it expects to see an

improvement for the regional server market in the second half of this year.

"While we are seeing early signs of recovery across the various

Asia-Pacific markets, the sustenance of this trend depends on the revival of the

US and global economies," said IDC analyst Avneesh Saxena in a research

note. China, which accounted for 31 per cent of all the money spent on servers

in the region, saw a decline for the first time after eight consecutive quarters

of growth as slowing exports took a toll on demand, IDC said.

With 125,621 units sold, the region's server market spun revenue of US$1.3

billion in the quarter compared with US$1.4 billion from 131,547 units sold in

the year ago quarter, IDC said.