Worldwide revenue from sales of server hardware dropped 15.2 per cent in the first quarter of 2002 compared with the same quarter a year earlier, and fell 13 per cent compared to the fourth quarter of 2001, according to research figures released yesterday by Dataquest, a unit of research company Gartner Inc.

Apple recently released its first server hardware, Xserve, in six years, in the hope of scooping market-share in its creative and educational fields.

Figures Dataquest released last month showed that unit shipments of servers were flat in the first quarter compared to the same quarter of 2001, pointing to a price decline for server hardware.

Revenue moves IBM held on to its crown for server revenue market share, accounting for 27.8 per cent of worldwide sales in the first quarter of 2002. The company gained share from the first quarter of 2001, when it held 25.8 per cent of the market, according to Shahin Naftchi, senior analyst for servers at Dataquest.

Sun Microsystems trailed IBM in the first quarter of 2002 with 17.4 per cent of the market, while Hewlett-Packard and Compaq held 12.8 per cent and 12.9 per cent, respectively. HP's acquisition of Compaq was not completed until the second quarter.

Although each of these companies reported a decline in revenue year over year, IBM saw the smallest drop, with server revenue falling 8.7 per cent from the first quarter of 2001. The other three top vendors saw declines in the double digits, the research company said.

Number one Compaq maintained its number-one position in the market for servers based on Intel processors, with 25.2 per cent of the market, Dataquest reported.

HP had a stunning 202.8 per cent gain in revenue from the sale of Linux-based servers in the first quarter of 2002 compared to the same quarter last year. However, its 4.7 per cent market share in Linux servers by revenue was the smallest among the top four vendors, and HP actually lost 2.5 percentage points of share from the first quarter of 2001.

Meanwhile, IBM rose to become the number one seller of Linux servers based on revenue, with 31.5 per cent of the market. The company outpaced Dell, which held the number one seat in the first quarter of 2001. IBM's market grab was mainly due to the company's inclusion of Linux in its big-ticket products, Naftchi said.

"IBM is putting Linux on the mainframe, so in terms of revenue it is high," she said.

Based on the number of Linux server units shipped, Compaq had the lead in the first quarter of 2002 with 23.8 per cent of the market, Naftchi said.