Bangladesh PC/Server Market Breaks All the Barriers to Cross 50,000 Unit Shipments in a Quarter for the First Time, Springboard Research Finds

Springboard Research, a leading innovator in the IT Market Research industry, today announced that the Bangladesh PC/Server market registered a growth of 27.5% to 54,522 in Q2 2006 (April-June) as compared to Q2 2005. The strong growth in the quarter was mainly driven by the increased IT spending by the government, telecom companies and financial institutions. In addition, the good performance of Bangladesh economy in Q2 2006 helped accelerate the country’s overall IT market, with the economy registering a full year GDP growth of 6.7% in FY 2006 (July-June). Nevertheless, increasing political tensions coupled with a rising power crisis in Bangladesh are the main challenges for the economy which in turn could drain PC/Server market growth.

Among MNC PC vendors, HP led the market with 15.5% share of total PC shipments in Q2 2006, followed by Dell and Lenovo. Among local branded players, Daffodil and Flora are the major manufacturers of PCs in Bangladesh with a collective desktop market share of 5.6% in the same period. Although, the unbranded/white box market is the competitive leader in the desktop market, it experienced a decline in market share to 69.9% during the quarter. The aggressive pricing strategy followed by MNCs and local vendors’ affected the assembled market to an extent.

Among all product categories, the notebook market experienced the highest growth of 37.1% annually in Q2 2006 followed by desktop and X86 server segments. “With increasing competition and reducing prices, we expect the segment to continue leading the overall PC market in 2007 as well”, noted Manish Bahl, Senior Analyst of Springboard Research.

PC/Server consumption in the country continues to be dominated by the government and large corporate sectors such as telecom, banking and financial services in Q2 2006. The ongoing trend of automation of government departments generated substantial business opportunities for MNCs and local players in the second quarter of 2006. Under the new fiscal budget announced in June 2006, the Bangladesh government accorded the highest priority to the education and IT sector, with an allocation of US$1.6 billion, 20% higher than the previous fiscal year budget.

“Bangladesh is one of the fastest growing economies in South Asia. Recently, the government’s increased focus on the IT sector and investments from multinationals has led to the sector experiencing strong growth in the country. However, political transition before the next general election scheduled in January 2007 will be a major challenge to the country's macroeconomic stability. If the current political situation improves and stabilizes, the market can grow faster than expected,” added Mr. Bahl.

For 2006, Springboard Research has slightly increased its forecast for the Bangladesh PC/Server market due to the greater than expected performance of Q2 2006. Springboard expects the PC/Server market to grow 23.0% as compared to the earlier forecast of 22.1% in 2006 and then growth will slow in 2007 due to the unstable political condition. The year 2007 will play an important role in giving a new dimension to the country’s economic and business outlook.

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 clients 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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Bhoorender Panwar

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Dane Anderson

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Springboard Research

65 6236-7682

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Manish Bahl

Sr. Analyst – Custom Research

Springboard Research

91 981068-1717

mbahl@springboardresearch.com