China's PC Industry Expects Slow Growth

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Last updated at: (Beijing Time) Tuesday, July 23, 2002

China's PC Industry Expects Slow Growth

The oversupply of personal computers (PC) in China in the first half of this year signals that the industry will enter a period of slow growth.

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The oversupply of personal computers (PC) in China in the first half of this year signals that the industry will enter a period of slow growth.

"Despite the increased IT spending in the education, construction, and medical sectors, the big telecom and finance spenders further intensified the competition in the PC market," Huang Yong, vice-president of CCID Consulting Co. Ltd., said Monday at a China IT Trend Forum.

According to CCID Consulting, sales of hardware, software and IT services reached 131 billion yuan (15.8 billion US dollars) in the first six months of this year with a growth rate of 15.8 percent, 2 percent lower than the same period last year.

Desktop shipments rose 17 percent year-on-year to 4.1 million units, but the sales only grew by 11 percent, indicating shrinking profits of computer makers due to the fierce competition, Tuesday's China Daily reported.

Sales of computer monitors even suffered a negative 4.8 percent growth, though the shipments rose 15.4 percent to 5.08 million units.

Huang said the competition among desktop makers is being further worsened by increased demand for laptop computers.

More than 365,000 laptops were sold from January to June, 44 percent higher than the same period last year.

On a positive note, the software sector saw steady growth in the first six months of this year with the sales reaching 14.3 billion yuan (1.7 billion US dollars), said Zhao Shufeng, assistant president of CCID Consulting.

"With shrinking hardware sales, software will take a bigger share of the computer market," Zhao said.

Huang concluded that China's PC market will likely grow by 24 percent in the second half of this year, thanks to improvements in the world economy and increased domestic spending.

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