SINGAPORE, February 4: Compaq Computer Corp expects its Asian business to keep growing in 1998 despite financial uncertainty and industry consolidation, a senior company official said on Wednesday."I have an objective to grow at least twice as fast as the market," Paul Chan, Compaq's Asia Pacific vice-president and managing director, told reporters.
Chan declined to be specific, saying he needed to look at industry forecasts for 1998 expected in the next few weeks. Last year, Compaq saw unit shipments grow 18 per cent in Asia, Chan said.
"I think revenue should be able to grow," he said. While Compaq wanted to increase its market share in the region, it would not do so at the expense of profitability, he added.
Last week, Chan told Reuters that Compaq's unit shipment growth in Asia was flat in the last quarter of 1997 while revenue, including sales from Tandem, fell 10 to 12 per cent due to Asia's financial crisis. He said revenue for the full year grew more modestly than the 18 per cent rise inshipments.
Last week, Compaq announced it was acquiring Digital Equipment Corp for $9.6 billion, a move analysts said would help it make bigger inroads into the corporate market.
Compaq would also gain from Digital's strength in the services segment.Chan said on Wednesday he expected the personal computermarket to consolidate in the region during 1998."When companies find that they cannot compete profitably in any specific space, they will be forced to take radical action. It may result in companies exiting a market space," he said.
Some smaller players had already done so in the Asia Pacific region, he added. "I think there will be accelerated consolidation," he said.Chan said the top three or four vendors were likely to grab a larger share of the region's market, as they were in much of the rest of the world.
Research firm International Data Corp said that the PC industry would continue to be dominated by the "big four" vendors -- Compaq, International Business Machines Corp, Hewlett Packard Co andDell Computer Corp.
"In the coming year in Asia Pacific, we are going to see an onslaught from companies such as Compaq, in areas where second-tier companies had strong plays before," Chan said.
Second-tier companies usually refer to Asian PC vendors who traditionally compete with lower-priced products.Chan said Compaq intended to make an aggressive move in the region with its sub-$1,000 multimedia computers.He said these products would do well in markets like Indiaand especially in south-east Asia, given the economic crunch.
Compaq could also tailor-make products for Asia. "Like modems, not all countries need 56K modems. Some software may not be necessary," he said.Tan Choon Seng, Compaq's Asia Pacific director of finance and strategic investments, said the company had not been faced with a single bad debt in south-east Asia so far.
He said new schemes like equipment leasing and financing would also help its customers in the Asia Pacific region.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
