Server Shipments, Revenue Decline in 2002 Latin America Server Market

Server shipments in Latin America declined 15.6 percent in 2002, and server revenue dropped 19.2 percent compared to 2001, according to Dataquest's, a unit of Gartner, latest findings. Server shipments in Latin America declined 15.6 percent in 2002 compared to 2001, and server revenue dropped 19.2 percent. Dataquest attributes the drop to a combination of economic and political forces.

"While mostly large corporations are keeping up with their IT purchasing plans, medium and small-sized businesses are strongly affected by the contraction of the economies," said Lillian Alvarado, senior industry analyst covering servers for Gartner Dataquest's Computing Platforms Latin America group.

Hewlett-Packard maintained the No. 1 position in server shipments, despite a 23.6 percent decline in the number of units shipped. Dell remained in third place despite exhibiting the strongest growth rate in server shipments, strong growth in every country in the region, and an increased penetration in all segments of the market, including small business and government.

"In the highly competitive Latin America server market, our research shows that Dell is effectively conquering niches in small and midsize businesses. Dell's success is coming at the expense of other top-tier vendors, as well as local builders," said Luis Anavitarte, vice president and research director for Gartner Dataquest's Latin America group.

Latin America Server Vendor Unit Shipment Estimates for 2002 (Units)
Company	2002		2001		Growth (%)
	Shipments	Market Share (%)	Shipments	Market Share (%)
HP	43,069	29.0	56,362	32.0	-23.6
IBM	28,960	19.5	27,993	15.9	3.5
Dell	20,231	13.6	15,626	8.9	29.5
Alaska	5,484	3.7	5,717	3.2	-4.1
Itautec	4,971	3.3	5,986	3.4	-17.0
Others	45,816	30.8	64,322	36.5	-28.8
Total Market	148,531	100.0	176,006	100.0	-15.6

Source: Gartner Dataquest (February 2003)

Server revenue in Latin America suffered an even larger decrease than units. Dataquest attributes this to the greater contraction in the RISC segment of the market.

"This segment has been hit harder by unfavorable economic conditions in the region because of partial migration toward lower priced Intel servers. All major vendors in this segment experienced lower shipments and revenue," Alvarado noted.

Here, IBM was the top vendor for server revenue, garnering 45.3 percent of the market. Its sales were concentrated in the industry standard server segment. Dell again ranked third despite being the only top-tier vendor to show an increase in server revenue in 2002.

Latin America Server Vendor Revenue Estimates for 2002 (Actual Dollars)
Company	2002		2001		Growth (%)
	Revenue	Market Share (%)	Revenue	Market Share (%)
IBM	666,713,263	45.3	723,934,073	39.8	-7.9
Hewlett-Packard	371,316,988	25.3	519,908,107	28.6	-28.6
Sun	121,983,139	8.3	232,200,324	12.8	-47.5
Dell	97,426,860	6.6	73,263,500	4.0	33.0
Itautec	53,471,013	3.6	53,128,475	2.9	0.6
Others	159,386,675	10.8	218,171,089	12.0	-26.9
Total Market	1,470,297,938	100.0	1,820,605,568	100.0	-19.2

Source: Gartner Dataquest (February 2003)

From a country-by-country perspective, shipments in Argentina declined 76.8 percent. Revenue declined nearly as much -- by 66.8 percent. Dataquest attributes this to the financial crisis from which the country is still suffering.

Brazil also experienced negative growth in shipments and revenue. In this case elections were cited as the culprit, as they created wide speculation, which was reflected in the volatility of the exchange rate toward the end of the year, and thus made purchasing imported equipment more expensive.

Conditions in Venezuela also deteriorated during the fourth quarter of 2002. Social unrest affected shipments and revenue.

Information for this report was compiled by Dataquest's Computing Platforms Latin America group. The group provides research on key aspects of the dynamic PC, server, and printer hardware markets in Latin America. The focus is on regional and country issues in the top-eight Latin American markets and the Rest of Latin America (ROLA) category, into which Central American and Caribbean countries are grouped.