Negative forecasts only add to IT glums, says IDC

Negative thinking and forecasting is reinforcing the reality that the IT market in New Zealand is in the doldrums, says IDC manager Graham Penn. Penn puts some of the problems down to economic uncertainty associated with Asia. Every time an economic guru gets up and makes a statement the interpretation is negative, he says.

Negative thinking and forecasting is reinforcing the reality that the IT market in New Zealand is in the doldrums, says IDC manager Graham Penn.

Penn puts some of the problems down to economic uncertainty associated with Asia. Every time an economic guru gets up and makes a statement the interpretation is negative, he says.

“But there doesn’t seem to be anything fundamentally wrong.

“The US stockmarket is going gang-busters and the Australian market is moving ahead. The tendency in New Zealand, however, is to do nothing. It’s a mental, not an economic depression and it’s flowed through to the IT market.”

“The most notable thing is that nothing is happening,” says Penn. “At this time of the year the market should be bubbling along.

“But no one wants to talk about it — they don’t want to admit the market is flat and going nowhere.

“We don’t see a real robust market for this year.”

It’s not just the PC market that is suffering, he says. “Most systems vendors are finding it tough. To get cash moving, they’re tending to shave margins, which plays havoc with the channels.”

Computerworld inquiries around the vendors reinforce Penn’s view. It’s widely acknowledged that there are far fewer requests for information about than is usual at this time of the year.

“There’ve been very few multimillion-dollar deals since around July last year,” says Hewlett-Packard managing director Bob Cattell.

Recent figures for 1997 published by the Ministry of Commerce show the overall market slipped 3.4% to $3.047 billion compared to 1996. PC sales were the worst affected, falling by 15%.

During past year, IBM withdrew from the PC retail market. PC General, a large local assembler, went into liquidation, and resellers to shut their doors included Best Buy, PC Power and Lowes. Just a week ago, AST reseller Cormorant went into receivership over supply problems.

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