The combined desktop and notebook market in Australia is showing signs of slowing down despite year on year growth of 15 percent in 1Q 2005, according to analyst IDC.
"A general swelling in demand from the SME and education markets, combined with a handful of significant tenders caused very strong growth," said Michael Sager, market analyst for PC hardware at IDC.
Comparing the result to figures from previous years, however, reveals a slow down in market growth, Sager added.
Between 2003 and 2004 year on year growth was 22.7 percent. The same figure for 2002-2003 was 20.1 percent.
Sager said the slow down could be attributed to the declining economic conditions and the completion of the Y2K and GST related refresh cycles.
"The market in 1Q 2004 performed very much in line with expectations, aside from the stand-out performance from the commercial notebook PC market," Sager said.
The commercial notebook market increased 19.8 percent in the first quarter, partially caused by tenders in the education market, such as the Tasmanian notebook for teachers program which was awarded to Acer, he added.
Lower production costs also contributed to notebook growth, Sager said. Since LCD panels make up 65 to 70 percent of the cost of a notebook, decreases in LCD prices have also resulted in lower notebook prices.
The PC market was fairly evenly split between whitebox and branded desktop PCs, which is in contrast to other countries in the region where branded desktops hold the majority.
Sager said this was partly to do with the distribution of the Australian population, with the cost of servicing regional areas presenting a big barrier for multinationals.
"Australia is not a catalogue based economy...direct selling hasn't taken off," he said.
Ingram Micro's acquisition of Tech Pacific had a key impact on the quarter, with nine major vendors vying for position within the channel partner, IDC said in a statement.
Sager said that Australia's reputation as a stable marketplace had attracted new vendors but this had also increased competition and pushed down prices.
The top five vendors in terms of marketshare were HP with 16.3 percent, Dell with 13.3 percent, Acer with 10.4 percent, IBM with 8.1 percent and Toshiba with 5.2 percent.
"It will be tough for vendors this year," he said.
Sager expects the PC market to achieve 5 percent growth by the end of 2005. However, this a decline from the 21.8 percent growth experienced in 2004. IDC forecasts predict negative growth in the market in 2006 with no signs of improvement until 2008.