IDC: SARS to deliver $1B hit to Asia’s IT market in 2003

Effects related to the outbreak of Severe Acute Respiratory Syndrome (SARS) will knock US$1 billion off the overall IT market in Asia-Pacific (excluding Japan) for 2003, according to research released Friday by IDC.

The fall to $76.1 billion from earlier estimates of $77.1 billion represents a reduction in growth from 7.6 per cent to 6.1 per cent, IDC said.

The greatest relative impact will be felt in Hong Kong, where the market will fall 2.9 per cent short of earlier forecasts because of concerns about SARS. Other countries affected will be China (revised down 2.1 per cent), Singapore (down 2 per cent), Malaysia (down 1.9 per cent), Taiwan (down 1.9 per cent) and Korea (down 1.3 per cent), IDC said.

In absolute terms, China will feel the greatest impact, losing around $550 million of business from its annual IT market of over $25 billion. 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, IDC said.

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

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” vendors whose products are aimed at the consumer market. In China, where local PC vendors dominate the consumer sector, this could lead to some consolidation among vendors, IDC said.