PC Sales in Sri Lanka Up, Despite Threat of War

Full text of Springboard Research press release


Sri Lanka PC/Server Market Crosses 50,000 Units in a Quarter for the First Time, Springboard Research Finds Strengthened economic indicators help the market grow 19.3%

Singapore – 2006

Springboard Research, a leading innovator in the IT Market Research industry, today announced that despite fears of raised conflict and civil war in the country, the Sri Lankan PC/Server Market managed to grow considerably (19.3%) to 56,011 in Q1 2006 (Jan-Mar)as compared to Q1 2005. The growth was mainly attributed to strong market fundamentals and improved economic indicators in the country.

Key market accelerators such as low PC penetration, strong economic growth and growing IT awareness remain in place. Although Sri Lanka is still in the early stages of implementing e-governance initiatives, it is not very far behind compared with the other countries in the region. These initiatives will enable the government to play a more important role in developing the IT sector in 2006 and beyond. A major threat to continuing market growth is the state of conflict in the country, but signs suggest the economy and PC market continue to overcome these challenges.

HP leads the desktop market with an 11.4% share of total shipments, followed by Lenovo and Dell. Panora and Maya are the two major local brands, contributing around 7% of the total desktop shipments collectively in Q1 2006.

Among the different product segments, laptops led the growth in Q1 2006 with 20.1% expansion over the first quarter of the preceding year. This trend is expected to continue throughout the year. The desktop segment – which represents 90% of total PC shipments – expanded 19.1% during the same period, while X86 server shipments increased 14.1%.
After the slowdown in IT spending by the government in Q4 2005 due to the presidential election, public sector spending picked up in Q1 2006, registering the highest share of 22.2% (among all the segments). Since the government is the major buyer of IT-related products in the country, the sector remains sensitive to the progress in the peace process and the status of the ceasefire. Any deterioration could affect the IT spending by the government.

"In the past, Sri Lanka has overcome from political threats, enabling the overall IT market to grow quickly. The expansion in economic activities is expected to strengthen further in 2006 with better performance in all the key sectors and especially services," commented Manish Bahl, Senior Analyst of Springboard Research. "We remain quite optimistic for the market to generate a respectable growth in 2006 and 2007. However, a lot depends on how political situation takes place in 2006," Mr. Bahl added.

Springboard Research expects the market to grow 19.2% in 2006 and further accelerate in 2007 and 2008. For the next few years, we expect the overall PC/Server market to grow at rates exceeding 20%. However, if the political situation deteriorates further, it will affect the growth of the IT market.


About the Asia Emerging Countries Tracker
Asia Emerging Countries Tracker is a Springboard Research service that tracks PC/Server market developments in Bangladesh, Brunei, Cambodia, Sri Lanka and Pakistan on a quarterly basis. The methodology employed for this service leverages interviews with IT resellers, vendors, component suppliers and end-users at the local and regional level.
About Springboard Research

Springboard Research represents value, integrity and insight. Lead by a team of dynamic industry experts, Springboard Research provides its customers with high value IT market research that helps them identify new market opportunities, growth engines, and innovative ways to go to market, which means Springboard’s customers lead rather than follow market trends. Not bound by legacy, Springboard’s cutting-edge research model leverages its offshore research centers, the Internet, and an increased use of technology as engines of innovation to deliver unique research value. This means that customers have a real alternative for IT market research and where knowledge is delivered in more useable and interactive formats. Springboard Research works with the largest IT companies in the world across the hardware, software, networking, and services sectors.

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Contacts
Chris Perrine
Vice President – Business Development
Springboard Research
65-6236-7681
cperrine@springboardresearch.com

Dane Anderson
Vice President – Research
Springboard Research
65 6236-7682
danderson@springboardresearch.com

Manish Bahl
Sr. Analyst – Custom Research
Springboard Research
91 981068-1717
mbahl@springboardresearch.com