Hardware Manufacturing

According to figures from the Australian Bureau of Statistics (ABS), production

of information technology and telecommunications (IT&T) equipment has fallen by

27 per cent during the past three years, from $4.8 billion worth of products in

1995-96 to $3.5 billion in 1998-99. Australia is now importing more than three

times as much computer equipment as it makes. Over the same period imports

of IT&T equipment have spiralled 21 per cent, from $8.9 billion in 1995-96 to $10.7

billion in 1998-99. For the year 1999, the Australian hardware market showed limited

growth. Spending blowouts related to fixing the Millennium Bug had taken the fizz out

of the corporate market. In addition, changes to the Australian taxation system,

centered around the implementation of the Goods and Services Tax (GST) led

that many buyers at both the corporate and retail level to delay making major

purchases until the GST came into effect on July 1, 2000.

There are very few major players in the Australian market that are local and home

grown. Major vendors in the field of manufacturing are largely multinational companies.

The five major vendors are Compaq (15.5 percent of total local desktop, notebook and

server markets), IBM (11 percent), HP (10.6 percent), Dell and Toshiba. In the local

market, about 2 million PCs are exported annually, of these 500,000 are destined for

the consumer desktop sector.

One of well known domestic high-tech design and manufacturing company,

KRONE is based on the central coast of New South Wales. It has led the way

internationally with the manufacture of innovative technology for high speed data

connectivity for LANs (local area networks). What makes KRONE remarkable is

that it in spite of the national trend of declined exports; it has reported significant

growth in export sales for the first half of 2000. This is attributed to KRONE balancing

its local sales with international market. The success is related to the fact that it

has tried to concentrate not only on the local market but also to international

customers by providing value added services. Many local manufacturing companies

are adopting KRONE’s business model to achieve success in the IT&T manufacturing

arena.

Other areas where Australia is seeing fast development includes the Storage

Area Networks (SAN) in the local market, especially in the corporate space,

with corporate storage requirements growing at between 60 and 80 % .The

networking market has been growing in excess of 20 percent per annum and

shows no signs of slowing down in the near future. At the retail level, the market

for Personal Hand Held Devices (PDAs) is growing strongly, especially those

devices that connect to the Internet. The market for PDAs is growing at 24.1

percent per annum in Australia, with IDC reporting that 75,000 devices shipped.

Australia has abundant local and regional manufactures of wireless hardware and

equipments to meet this demand.⁶

DATA TABLE (Millions of U.S.$)

(2000)