Sars hits Asia's IT market

Te outbreak of Severe Acute Respiratory Syndrome (Sars) will knock $1bn (£609m) off the overall IT market in Asia-Pacific...

The outbreak of Severe Acute Respiratory Syndrome (Sars) will knock $1bn (£609m) off the overall IT market in Asia-Pacific (excluding Japan) for 2003, according to IDC.

Growth in the IT market fell to $76.1bn (£46bn) compared with earlier estimates of $77.1bn, representing a reduction in growth to 6.1%, IDC said.

The greatest relative impact will be felt in Hong Kong, where the market will fall 2.9% short of earlier forecasts because of concerns about Sars. Other countries affected will be China, Singapore, Malaysia, Taiwan and Korea.

China will feel the greatest impact, losing around $550m (£335m) of business from its annual IT market of more than $25bn (£15m). The estimate assumes that the Sars outbreak has peaked in the south of China and will not spread to other important centres such as Shanghai.

The impact will be concentrated in the second quarter of the year, where the IT market is expected to fall 4.7% short of earlier forecasts. In the third quarter, the impact will be 0.9% and no impact is expected by the fourth quarter.

The consumer market has been the hardest-hit sector of the market in Sars-affected countries, causing problems in the PC market, especially for "white-box" suppliers whose products are aimed at the consumer market.

In China, where local PC suppliers dominate the consumer sector, this could lead to some consolidation among suppliers.

David Legard writes for IDG News Service

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