Compaq Sees 20% Annual Asian Sales Growth in Services
(Update1)
By Natalia Olynec
Singapore, Dec. 4 (Bloomberg) -- Compaq Computer Corp., the
biggest maker of personal computers, said revenue from
technology services in Asia will grow by more than 20 percent
every year through 2003, as more Asians move their businesses
online.
``Many businesses are employing technology for the first time'' in
Asia, Peter Mercury, vice president and general manager for
customer services at Compaq, said in an interview. ``We're
looking to take advantage of the growth opportunity here.''
Internet penetration in Asia is increasing faster than in the U.S.
and Europe, driving demand for services such as e- commerce
and support for high-end servers or machines that power Web
sites and networks. to run Internet sites, Compaq said.
Compaq's Asia Pacific region, which excludes Japan and
Greater China, made up about 6 percent of its $11.2 billion sales
for the three months ended September.
To tap the opportunity, Houston-based Compaq will boost its
Asian IT services staff in three years to about 9,000, from 7,000
now. It also plans to spend about $40 million to acquire services
companies in the region and upgrade its own Web-based
services.
Internet penetration in Asia excluding Japan, will increase by a
compound annual growth rate of 27 percent through 2004,
according to a recent report by Morgan Stanley Dean Witter &
Co. The brokerage increased its estimates for the number of
Internet users by the end of 2004 by 12 percent in September to
176 million, as growth in penetration exceeded expectations.
As a result, the IT services market in Asia Pacific will expand to
$93.5 billion in 2004 from $30.8 billion in 1999, said Rolf Jester,
regional director for IT services research at Gartner Group
Advisory (S) Pte.
Shift to Services
``We've been witnessing a gradual shift, going from an industry
oriented around products and technology to an industry where a
much higher proportion of money is spent on services,'' said
Jester.
In comparison, Internet use in the U.S. will grow at a compound
annual growth rate of 14.5 percent, while the number of users in
Europe will increase by 4.5 percent every year, Morgan Stanley
Dean Witter said.
Compaq is expanding its services business even as PC sales
are slowing. Last month, the company said fourth-quarter profit
would miss forecasts because of the decline in the value of the
Euro currency.
The company plans to move away from less-profitable desktop
PCs and focus on faster-growing markets for notebooks and
servers.
Compaq shares, down 16 percent this year, rose 1.30 yesterday
in the U.S., or 6 percent, to $22.80 on Friday. |
