IDC: China’s PC market forges ahead

Sales of PCs in China grew 22 per cent in 2001 to reach 8.79 million units, and will maintain a compound annual growth rate (CAGR) of 20 per cent over the next four years, according to market-research company IDC.

China is easily the largest PC market in the Asia-Pacific region (excluding Japan), with 42 per cent of regional PC sales, and grew much faster in 2001 than the 6.5 per cent rate posted by the region as a whole.

Worldwide, China is the third-largest PC market behind the U.S. and Japan, and its continued rapid growth will see it become the second-largest PC market next year. By 2006, annual PC sales in China will reach 21.65 million, IDC said.

Growth in 2002 will be moderate by China’s standards but will strengthen again in 2003 because of the PC replacement cycle in larger cities and stronger demand from less-developed provinces.

The education market was a key driver in 2001 as the government pursues a goal of providing Internet access to 90 per cent of all primary and secondary students.

But consumer sales were sluggish, because of a technology shift from Pentium III to Pentium 4 processors; the global economic slowdown; and the high PC penetration rate in cities, which has reached 30 per cent in Beijing, Shanghai and Guangzhou, IDC said.

The northern China market, centered on Beijing, is the largest sector of the market, its 3.3 million unit sales being more than the whole of the South Korean market, the next-biggest national market after China. The eastern China market, centered on Shanghai and Nanjing, saw sales of 2.53 million units. The eastern China market will grow at a CAGR of 23 per cent compared to a CAGR of 18 per cent for the northern region, IDC said.

The western China market was the fastest growing in 2001, largely because of a focused government plan to develop the region. Xian, the capital of Shaanxi province, is already the key distribution center for the West China region, while Sichuan province, with a population of 83 million, represents a major opportunity for the consumer market, IDC said.

Local PC manufacturers such as Legend Group Ltd. and Founder Holdings Ltd. dominate the market in all regions of China, with IBM Corp. and Dell Computer Corp. the only non-Chinese manufacturers appearing in the top five.