Market Research - survey commissioned by CyberSource - Internet/Web/Online Service Information

EDP Weekly's IT Monitor, Nov 29, 1999

Internet Fraud A Growing Concern For Most Online Merchants

Seventy-five percent of online merchants consider credit card fraud to be a concern, yet 41 percent do not know they are held financially liable when online fraud takes place, finds a recent independent fraud survey commissioned by CyberSource Corp., a developer and provider of real-time eCommerce transaction services. The survey also found that lack of confidence by consumers is the number one concern for online merchants, followed by stolen credit cards, unauthorized access to customer information, hacking and chargeback fees.

Respondents also expressed frustration at the lack of adequate controls from credit card companies and the government. Fear of the negative impact fraud can have on online brand image was also mentioned as a strong concern for merchants. Seventy-two percent of online merchants surveyed believe sales would increase somewhat if online shoppers were not worried about fraud. With the lucrative holiday season approaching, online fraud has a special significance, with 74 percent of merchants believing that fraud will increase this holiday season. The fraud survey was conducted by Mindwave Research Inc. on behalf of CyberSource.

Asian PC Market Continues To Surge Despite Y2K Concerns; Q3 Shipments Reach Record High

Asia/Pacific (excluding Japan) PC shipments continued to exceed expectations in the third quarter of 1999, according to figures from International Data Corp. (IDC) Asia/Pacific. The outstanding PC growth was consistent throughout the region, despite earlier concerns that end-user apprehension regarding the Y2K issue would impede the market.

Total regional PC shipments reached a record high in the third quarter as over 3.6 million units were shipped for more than 41 percent annual growth and a five percent increase compared to Q2 1999. The market's annual growth rate in Q3 1999 was the highest generated in almost four years.

Asia's economic recovery remains the primary factor behind the regional market's momentum as PC demand picked up in all countries. Perennial market drivers such as price erosion, Internet proliferation, low PC penetration rates, and the consumer market have also contributed to strong PC growth in Asia. Some vendors were concerned that PC acquisitions would stall in the second half of 1999 due to a spending lock-down caused by the Y2K issue, but a major commercial spending freeze failed to materialize. While there could be a greater impact in the fourth quarter, particularly in the large business and government sectors of developed markets, strong buying in other market sectors is forecast to offset the impact.

"The Asian PC market continues to easily overcome whatever obstacles are set in its path," says Kitty Fok, research manager at IDC Asia/Pacific. "Despite concerns that growth may slow in the second half of the year, the region's economic rebound continues to fuel momentum that is expected to continue into the next century."

Competitively, Legend is expected to lead the regional market for the first time with an 8.5 percent market share. Legend's regional market coverage remained limited to the PRC, the largest market in Asia/Pacific (excluding Japan). Holding the crown ranking in the PRC enabled Legend to claim the region's top spot. Aggressive pricing and its influence in China's burgeoning consumer PC market also contributed to the vendor's growth.

As a result of Legend's gains, IBM dropped to the second place position with roughly 7.8 percent market share. Compaq trailed Legend and IBM with a moderate annual shipment growth rate, but its sequential increase of five percent was the greatest among the market's top five vendors with the exception of Legend. Hewlett-Packard and Samsung ranked in the fourth and fifth place positions in Q3 1999, respectively. Both vendors managed to increase volumes almost 50 percent compared to the same period in 1998; however, their volumes were weaker compared to Q2 1999.

Every country market in the region generated positive annual shipment growth in the third quarter with increases ranging from roughly 10 percent in New Zealand to an over three-fold increase in Indonesia.

Revenue From Bandwidth Services To Cross $90 Billion By 2003

The US is experiencing the highest growth of data transmission in the world, according to a new Business Communications Co. study entitled Bandwidth Supply and Demand in Access Networks. With an AAGR (average annual growth rate) of 30 percent, the bandwidth demand for data services in the US will grow from 2.01 million tetra bits per second in 1999 to 5.70 million tetra bits per second in 2003.

This demand will be met in the access segment by incumbent service providers including IXCs and ILECs, as well as CLECs, wireless service providers, cable TV companies and satellite phone service operators. It will be met using twisted copper, optical fiber, co-ax cable, wireless and satellite connections supported by X-DSL, ATM, Sonet- SDH/ADM, VPN, DWDM, wireless broadband, Internet and other technologies. Most demand for broadband services will fall within the bandwidth ranges of 2-10 Mbp/s, 10-55 Mbp/s, 55 Mbp/s and above and originate from medium to small businesses, large businesses, SOHO and home customers.