With Hong Kong's technology trade in the doldrums and little sign of economic recovery, computer giant IBM continues to drum up business and pull ahead of its rivals. IBM Hong Kong's general manager Cordelia Chung said while she expected conditions this year to remain choppy, she remained optimistic. 'While it is not very clear when the market will recover, we will continue to lead in those areas where we are already No 1 and capture those few bright spots which are in software and services and are also some of IBM's biggest strengths,' Ms Chung said. IBM has managed to do better than most other leading technology vendors during the recession. IBM's fourth-quarter net income dropped 13 per cent year on year to US$2.3 billion, while revenue dipped 11 per cent to US$22.8 billion. The company's hardware and services businesses were both down in the quarter, but chairman Lou Gerstner blamed the fall in total revenue on soft PC sales and the components that IBM sells to other vendors. While IBM's PC sales faltered in the United States, it maintained its lead in market share in Hong Kong last year with a 23 per cent revenue share, according to IDC. IDC analyst Kitty Fok said: 'IBM PCs are still strong, still selling well in Hong Kong even though the overall PC market has stagnated. Next year, IDC expects the IT market in Hong Kong to shrink by 4.5 per cent so it'll be even more challenging.' In the past few years, IBM has become more of a competitive force in key markets where it previously lagged, such as Unix servers, storage and non-mainframe databases. Market researcher National Data Corp's latest enterprise server and PC market report showed IBM in Hong Kong grew 12 per cent last year in the overall server market to grab the market leader position with a 44 per cent revenue share. The company also beat Sun to become No 1 in Risc-based Unix servers with 18 per cent growth and 42 per cent revenue market share. In Intel-based server shipments, which is traditionally not a strong area for IBM, it grew 9 per cent to take the leading position with a 29 per cent market share, beating Compaq Computer. Ms Chung said: 'I think we gained somewhat with the uncertainties surrounding Hewlett-Packard and Compaq and the resulting confusion behind the hung merger.' IBM has also significantly built up its services and software businesses, and it is one of the leading advocates of Linux technology for corporate uses. 'We were successful in securing some large outsourcing and services contracts last year,' Ms Chung said, citing a US$28 million e-business hosting contract with Stockmartnet, a US$50 million five-year outsourcing contract for PCs and workstations with Cathay Pacific and a US$6.5 million, six-year contract for office automation operation and mission-critical server systems with the Hong Kong Monetary Authority. This year Ms Chung said that the company saw opportunities in providing software application services to small and medium-size enterprises (SMEs) in Hong Kong. 'Typically SMEs here are most sensitive about the total cost of ownership, especially in these tough economic conditions, so we plan to introduce a new e-sourcing service soon,' she said. The e-sourcing service follows the application service provider concept where customers pay a monthly subscription to use some of IBM's e-services.