Sun Microsystems Inc. expects a double-digit rate of revenue growth in its greater China region in the next fiscal year as the computer networking firm rolls out new products, a senior executive said on Friday.
Sun also expects to raise overall headcount in greater China -- which includes mainland China, Taiwan and Hong Kong -- by 5 to 10 percent in the fiscal year starting in July, said George Ng, Director of System Practice of Sun Greater China. For most of the (established Asia markets) we do expect a potential growth of double digits, Ng told Reuters in an interview, adding that China would figure among them.
We'll be putting more feet on the streets, to keep up with the expected growth, said Ng, adding that Sun had close to 1,000 employees in greater China.
California-based Sun, a few years ago a networking sector stalwart, is struggling to regain its former shine amid fierce competition from rivals such as IBM, Dell and Hewlett-Packard Co. as well as newer, open-source rivals.
Sun, which also provides computer services and faces the likes of Tata Consultancy Services, Infosys Technologies and U.S. outsourcing specialist BearingPoint, is hoping to capitalize not only on the China market as a future offshore centre but also as a domestic consumer.
In the last few years the seller of computer servers, workstations, software, storage and services has been scrambling to cut costs and has made job cuts, while also dealing with a softening in U.S. and U.K. demand, particularly in servers.
AFTER THE BUBBLE
Since the implosion of the dot-com and telecommunications investment bubbles in 2000-2001, Sun has suffered more than its main competitors IBM, Dell and HP.
Still, Sun has now posted two quarterly profits in a row, following five quarters of losses, and is banking on new processors and servers to drive growth.
Companies have gone through difficult times in the past ... you can't just throw money away buying jackets for every event you want to go to, Ng said, declining to comment on financial targets for the current fiscal year.
Analysts polled by Reuters Estimates expect Sun to post net profit of $178.6 million for the three months to the end of this month, versus a loss a year ago.
Total net revenues for 2006/2007 are expected to come in at $13.9 billion, a near 7 percent rise, analysts said.
Sun had a 9.3 percent share of China's 4.4 billion yuan IT server market in the last quarter of calendar 2006, putting it in fourth place after IBM, HP and Dell, according to research firm Analysys. Dominant player IBM had a near-40 percent share.
Asia-Pacific made up 16.6 percent of Sun's total net revenue of $13 billion in the year ended on June 30, 2006.
Australia and New Zealand made up 15 percent of revenue in its Asia-Pacific region, which also includes Japan, South Korea, greater China, India, South Asia.