Gartner: External disk storage revenue drops in AP

External disk storage revenue in the Asia-Pacific region excluding Japan (APEJ) went from being the fastest growing globally in the second quarter of 2005 to the slowest in the third quarter, says Gartner.

According to the research firm, external disk storage revenue totalled US$343 million in the third quarter of 2005, a decrease of nearly 10 percent over the second quarter.

"There are many reasons for this decrease, the primary one being the drop in market share in China, Australia and Taiwan," said Aman Munglani, principal analyst with the global storage team, in a statement. "China, which accounts for nearly 27 percent of APEJ shipments, witnessed a drop of 23 percent in revenues compared to the second quarter of 2005 while Australia and Taiwan dropped 10 percent and 9 percent, respectively."

Despite the decline, rankings by country remained the same: China and Australia continue to hold the first and second positions respectively. External disk storage revenue in China totalled US$91.7 million in the third quarter with 8,415 terabytes of capacity.

"The third quarter is always the weakest quarter of the year, and this year is no exception," said Jimmie Chang, principal analyst with the global storage team, in a statement. "A large number of the users are state-owned enterprises or the government itself, and many of their investments are normally made in the first two quarters of the year. We will see an increase in spend during the last quarter of the year as many enterprises will look to exhaust their budgets for the year."

According to Gartner it was a quarter of significant gains for Hewlett-Packard as the vendor not only increased market share but also witnessed a more than 4 percent gain over 2005 second-quarter figures. HP also increased the gap on its nearest regional competitor and was the only vendor to witness positive sequential growth among the top three players.

HP's revenues totalled US$85.86 million, representing 25 percent of overall external controller-based disk revenues reported in the APEJ region. "The highlight of HP's performance this quarter was the fact that they overtook IBM to take the lead in China, which is a crucial market," said Munglani. "Moreover, it was a quarter of all around improvement as the vendor not only maintained its lead in markets such as Australia, India and Taiwan but also considerably closed the gap on EMC in Korea, which is a growing market."

Maintaining its market position from the last quarter, EMC's revenue in APEJ totalled US$67.79 million, and the vendor claimed 19.7 percent market share. The vendor beat HP to maintain its lead in the Korean market and also increased market share in geographies that include China, Hong Kong and Taiwan. However, EMC lost market share to IBM in India, Gartner noted.

According to Gartner's latest report, IBM had a challenging time in APEJ during the third quarter. In addition to a marginal drop in revenue share, Big Blue saw a more than 9 percent drop in market share in the third quarter compared with the previous quarter.

HDS gained two places and superseded both Sun Microsystems and Dell to occupy the fourth position in revenue across APEJ. HDS also earned the distinction of being the fastest growing vendor among the top players and grew more than 19 percent in the third quarter compared to the previous quarter. The growth in revenues seen in both Australia and Korea were critical to the vendor's performance across the region, Gartner noted.

Contrary to trends seen in the previous quarters, Dell could not sustain its high growth rates and suffered a near 17 percent drop in revenues. While the vendor managed to maintain a fairly stable performance across the region, Gartner added, the real dampener was China where Dell's revenues suffered a 50 percent decline over the second quarter of 2005. Dell's numbers continue to be fuelled by Dell/EMC co-branded products, mainly the CX300 and AX100 series.