Sri Lankan PC/Server Market Outperformed 2006 Growth Projections

Singapore - March 28, 2007

Springboard Research, a leading innovator in the IT Market Research industry, today announced that according to its Asia Emerging Countries (AEC) Quarterly Tracker, the Sri Lankan PC market grew 22.4% in 2006 to 215,290 units shipped as compared to Springboard’s earlier forecast of 19.1%. This better than expected performance was mainly driven by government initiatives to increase IT literacy in the country, as well as the increasing demand for computer automation from the banking and finance, defense and telecom industries.

Overall, the Sri Lankan economy recorded a GDP growth rate of more than 7.0% and foreign direct investment (FDI) of US$ 600 million in 2006. However, the renewed and deepening violence of the past six months between the government and rebel forces, Liberation Tigers of Tamil Eelam (LTTE), may prove to be a huge deterrent for future investments and growth, including for IT.

“The Sri Lankan PC/Server market offers substantial untapped growth opportunities for both domestic as well as foreign IT vendors,” said Manish Bahl, Springboard’s AEC Research Manager. “The biggest impediment to this growth is the ongoing civil strife of the past few months which has further deteriorated the country’s security condition. While Sri Lanka’s PC/Server market has become quite competitive in recent years, any escalation in political conflict will hold back the ambitious IT plans of both the government and large corporations, which in turn will dampen PC/Server market growth,” Bahl noted.

Despite the cautious outlook for 2007, last year’s PC/Server growth outpaced market expectations. The industry’s growth was led by the desktop market, which boasted 24.2% expansion over the previous year, followed by the X86 server and portable segments. Although the portable segment grew least in 2006, it is expected to lead the market in 2007 and beyond, while the desktop market is expected to continue to perform well as several government projects are underway. In addition, new product launches and expansion strategies were recorded by nearly every IT vendor in 2006, and Springboard expects this trend to gain further momentum in 2007.

“To continue growth in the PC/Server market, Sri Lanka needs to build an environment where foreign investors feel confident about the country’s economy,” Bahl explained. “This won’t happen completely until the security situation stabilizes. Nevertheless, although companies are being careful with their IT investments, Springboard still expects the market to grow at a healthy rate in 2007.”

Springboard’s research analysts forecasts PC/Server market growth of 23.1% for 2007. However, the projected growth may be downgraded depending on the country’s political situation as any sharp increase in violence will affect the market considerably.

About the Asia Emerging Countries Tracker

The 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’s core values are value, integrity and insight. Led 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. As a result, 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. Provided as an alternative to traditional IT market research, Springboard’s reports deliver data and knowledge in a more usable and interactive format for our clients. Springboard Research works with the largest IT companies in the world in the software, services, hardware, and telecommunications sectors.

Founded in 2004, Springboard Research serves the needs of its clients globally through offices in the United States, Singapore and Japan as well as global research centers in India and Pakistan.

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Media Contacts

Bhoorender Panwar, Manager- Sales & Marketing
Springboard Research
91-11-4160-4886
bpanwar@springboardresearch.com

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

Dane Anderson, CEO & EVP of Research
Springboard Research
65-6236-7682
danderson@springboardresearch.com