Untapped PC market opportunities in South Asia: IDC

IDC's quarterly PC tracker on emerging Asian markets shows
that the client PC market in Pakistan, Bangladesh and Sri Lanka totaled 393,184
units in the second half of 2005, thus bringing full year 2005 shipments to
851,735 units, representing a

16 percent growth for the year.

With full year growth of 19 percent, Pakistan boasted the
highest growth rate among the three markets, while Bangladesh and Sri Lanka
achieved respectable 13 percent and 12 percent growth rates respectively.

"Despite some dampeners in 2005, such as risky peace
talks and the after-effects of the tsunami, the PC market in Sri Lanka exhibited
resiliency largely due to public sector and non-government organization
purchases," said Andrew Wong, Research Manager of Emerging Asia Countries
Personal Systems Research, IDC.

"In Pakistan, encouraging government-led policies and
structural liberalization in the financial and telecommunications sectors helped
to lift the PC market. Bangladesh, on the other hand, was relatively unaffected
by the influx of second-hand PCs, thus allowing the market to move ahead,"
he added.

The challenges in these countries are numerous, yet they
present many opportunities for current vendors and potential new entrants. Over
the long term, IDC predicts that the compounded annual growth rate from
2006-2010 for Pakistan, Bangladesh and Sri Lanka will reach 19 percent, 22
percent and 11 percent respectively, largely driven by public sector purchases,
as well as the telecommunications and financial services sectors.

"The compounded annual growth rates expected in these
three countries make the rest of the APEJ market look dull in comparison,"
said Bryan Ma, Associate Director of Asia-Pacific Personal Systems Research IDC.
"In fact, Pakistan's total market size could exceed the much more
developed Singapore PC market in absolute terms as early as 2007."

Still, vendors will face wild cards from the political,
social and economic angles. Faced with a delicate balancing act in ensuring
sustainable business models, vendors should strengthen partnerships with the
local vendors or channels, especially when pursuing the government, education
and financial sectors.

For instance, multinational vendors in Sri Lanka can partner
with a local system integrator or value added-reseller to reduce costs and to
get access to government contracts. This approach can be especially useful for
vendors who wish to venture into this market in the midst of a rapidly changing
environment.

In Pakistan, local branded PC vendors such as In-Box and
Raffles achieved commendable market share in the past year by banking on
government and education projects. But multinational PC vendor HP grew 38.5
percent year-on-year to take the top spot in Sri Lanka in 2005 thanks to
projects in the government, corporate, and education sectors.

Similarly, HP overtook local incumbent Daffodil for the top spot in
Bangladesh in 2005, where the government, education, finance, and agriculture
sectors generated multiple small-scale projects throughout the year, IDC said.

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