AGGRESSIVE marketing and price competition from multinationals has seen the domestic share of the whitebox market slump to a record low of 22%.
However, OEMs tell Reseller News that while the market is tough in the PC space, they are generally making up for it with notebooks and servers.
Market analyst IDC has released preliminary figures showing second-quarter sales of desktops, notebooks and x86-based servers were up 4.6% on Q1, at 134,535 units, and 9% up on the same period in 2003.
The local whitebox OEM share was just 22%, compared with around 24% for the previous two quarters, and around 28% last year.
IDC hardware ana-
lyst Liam Gunson says he expects the downward trend to continue, as the major multinationals continue to expand their sales, particularly to consumers, helped by a strong dollar.
The market leaders during the April-June quarter, he says, were HP, Dell, IBM, Acer and Toshiba. HP and Dell fuelled much growth, while Toshiba and Acer (which swapped places with IBM over Q1) declined and IBM stayed flat.
Local manufacturers, he says, suffered a slight decline in units made but were increasingly moving into the mobile space, concentrating more on their specialist sectors, like education, rather than competing on price.
While expecting their market share to continue downwards, Gunson says those businesses will ensure their survival by concentrating more on serving SMBs, emphasising their faster service and customisation, and moving further into the more profitable notebook and server markets.
Local producers contacted by Reseller News confirm they are already making such moves.
Christchurch-based assembler Cyclone Computers says business is “reasonable”, with production up 53% to 7000 units a year, though average retail values were slumping. General manager Richard Morgan says his firm’s market is the tertiary sector and SMBs, with Cyclone avoiding the highly competitive consumer market.
He says his company is making more servers — based on Intel’s Itanium, and in the blade server form factor.
Mark Forbes, general manager of Auckland-based Ultra Computers, says business is “better than last year”, claiming rising unit sales at declining average sale prices.
His company’s 13 staff make 300 PCs a month and claimed success from taking part in an Intel build-to-order programme to make customisable models using the latest Intel Prescott chips.
“We have also tried to broaden our offering with build-to-order notebooks from entry-level thin and light models, to long-life battery models for road warriors and heavy density desktop replacements,” he says.
Garry Marriott, managing director of Auckland-based JDI, credits the post-Y2K PC replacement cycle for an upsurge in business, with a stronger dollar meaning cheaper raw materials, even if finished goods prices are also lower.
His company, which has 15 staff in Auckland, was also increasing its server and notebook production.
Jan Paterson, general manager of Insite Technology in Christchurch, also reports satisfactory business, with unit production up 5% a year to around 5000.
Her business, which employs 20, has started making notebooks a few months ago; it was developing new servers and was also bundling its offerings.
Peter Shirley, executive director of Arche Technologies and chairman of the Computer Manufacturers Association of New Zealand (CMANZ), confirms business is tough in the consumer sector, thanks to $999 boxes from the likes of Dell and HP, but elsewhere, particularly in education, the market is better.
“We are now moving seriously into notebooks. Before that, we had been dabbling,” Shirley says.