The market might be past its hey-day of a decade ago - when IBM could claim profit margins on its large systems in excess of 80 per cent. Heavy competition among IBM-compatible vendors may, indeed, have slowed the gravy train.

But it remains an immensely profitable sector of the industry.

''Anyone who says the mainframe market is dead is way off mark,'' said analyst ResearchAsia managing director Mr Glen Rasmussen.

The mainframe computer is still the preferred platform among large companies that need to move massive volumes of data in a secure and reliable environment.

Banks and airlines are typically large users of mainframes. They provide the kind of 24-hour workhorse processor role needed for controlling networks of automatic teller machines, or airlines' computer reservation systems.

Hongkong can provide some good examples. Hongkong Bank, Standard Chartered Bank and Cathay Pacific are among the biggest users in the territory. Each either bought new mainframe processors last year, or bought major upgrades to existing systems.

ResearchAsia's Mr Rasmussen said although the mainframe sector in Hongkong was flat, at best, the machines still had their place in corporate computing environments, and would not be displaced anytime soon.

Mr Graham Mead, of researchers' Graham Mead Associates, agreed: ''It might have slowed, but there is still a momentum in the mainframe market.'' This momentum lies largely in the millions of dollars companies have invested into their software. Any change of platform for a company such as Hongkong Bank or Cathay Pacific is not going to happen overnight.

Companies may exploit fresh technology and computing architecture in new applications, but changes to core systems tend to take place slowly.

ResearchAsia estimated the mainframe market in Hongkong last year was about US$102 million, and projects it will be worth slightly less, at US$100 million, in 1993.

Vendors and researchers agree the mainframe will continue to re-invent itself within increasingly complex and heterogeneous networks.

The role of the mainframe system has definitely changed and the result has been a wildfire spread of cheap and powerful personal computer and workstation technology.

But large central processors - mainframes - have yet to be displaced.

The mainframe's next incarnation will most likely be as a large data server in mission critical, high-volume transaction environments where data integrity and security are major issues.

But even mainframe sectors' dominant player, IBM, has not been able to resist general industry moves toward the so-called ''open systems''. Other mainframe vendors, such as Hitachi Data Systems and Amdahl, are also constantly reappraising the mainframes'role.

In launching 18 new models in its Enterprise System/9000 range last week, IBM directly addressed these new and fundamental issues facing mainframe business.

The company's strategy ''includes the further incorporation of open standards, enlarging the mainframe's role in the client/server environment . . .'' The company's four System/390 mainframe operating systems are incorporating TCP/IP, OSI and POSIX interface compliance. (You can also run IBM's UNIX implementation called AIX on its mainframe processors.) Amdahl International, a manufacturer of IBM-compatible mainframe systems, is similarly redefining where its products sit within new computing environments.

''Of course, people are going into LANs (local area networks), and workstations and all those other boxes,'' said Amdahl International's Hongkong/China general manager, Mr John Wholley.

''But there are other applications that are best suited to the mainframe computer. It's a matter of putting the right application in the right box.'' Mr Wholley said the mainframe could not yet be replaced in the back office for two reasons: first, the mainframe could not be matched for processing ''great dollops of data''; and secondly, because of data security and data integrity issues.

''Five years down the road, I think we are still going to be seeing bigger and more powerful mainframes,'' he said.

''There are still a lot of people scrambling for that top end.'' Another IBM-compatible mainframe manufacturer, Hitachi Data Systems (HDS), is not exactly moaning about some lack of opportunity.

HDS Hongkong general manager Mr Geoff Kennedy maintained there were too many applications where mainframes were irreplaceable - despite the hype about ''downsizing'' to small, powerful, UNIX machines.

''If you have 2,000 terminals out there and you replace them with PCs, how do you then give them all access to the same data if you don't use a mainframe?'' Mr Kennedy asked.

''When you are talking about large numbers of terminals, large numbers of users, and large amounts of data, I just don't think that downsizing is the direction in which you look.'' Other mainframe manufacturers have similarly had to rethink mainframe strategy.

The NCR Corporation changed direction dramatically - dumping work on large-scale systems based on proprietary chip technologies in favour of parallel processing systems which use standard Intel microprocessors running in tandem.

NCR's 3600 series, which runs the UNIX operating system, can tie together hundreds of processors to provide mainframe class power.

Unisys is gearing its mainframe platform to the specific needs of a few vertical markets such as airlines and telecommunications.

Is the mainframe processor dead? No one in the industry seems to think so.

The market for mainframes may be shrinking but it will take a long time to kill off the largest system in the business.