PC Shipments in China Grow Sluggish in the Fourth Quarter of 2010; Less Developed Areas Expected to Gain Growth Momentum with Policy Support, IDC Report Says 

BEIJING, CHINA – April 5, 2011 – The International Data Corporation (IDC) China Quarterly Provincial PC Tracker shows that China's personal computer market grew sluggish in the fourth quarter of 2010 (4Q10). The country's total PC shipments rose to 15.7 million units in the October-December period, a decline of 8.7% from the third quarter of 2010. Total PC shipments increased 4.2% over the same period in 2009.

Desktop computer shipments rose to 5.8 million units in 4Q10, an increase of 3.9% from 3Q10 and 11.5% over the same period in 2009. Laptop shipments hit 3.2 million units, decreasing 0.3% from the third quarter, and rising 8.7% year over year.

China's GDP grew 9.8% year over year in the fourth quarter of 2010. GDP growth slowed in the second half of 2010 after a robust increase in the first six months. However, the Consumer Price Index, a major gauge of inflation, soared from 1.5% in January 2010 to 5.1% in November, its highest point in the previous 28 months, before dropping to 4.6% in December. IDC's research shows that inflation pressure has curbed the growth of China’s PC market as laptop shipments for home use in 4Q10 dropped 36% compared to the previous quarter. High inventory levels and a lack of new products also helped to curb the growth. However, the fourth quarter witnessed sales gains for 3C products and other new rising retail terminals. These products helped to drive up sales volumes of computer manufacturers such as Apple and Haier who sell products via 3C retail shops. Their market shares in 4Q10 jumped 277.1% and 52.0% respectively.

Comparatively, the commercial PC market performed better than home use market. Sales of desktop computers for commercial use rose 11.5% compared to the same period in 2009, while sales of laptops for commercial use rose 8.7% year over year. However, the commercial PC market growth rate is still below forecast.

IDC also found that demand from the education industry and large enterprises helped to drive the commercial use computer market. Shipments to the education industry in 4Q10 reached 1.4 million units, an increase of 12.4% year over year. Since the Ministry of Education release of "Medium and Long Term National Guidelines for Educational Reform and Development (2010-2020)" in July 2010, computer purchases from educational institutions have increased significantly, especially in provinces such as Liaoning, Shandong, Hubei, and Zhejiang. Shipments to large enterprises in 4Q10 rose to 937,000, an increase of 31.1% year over year. Within this segment, shipments to financial industries witnessed the most significant growth. Shipment to medium and small enterprises reached 5.7 million units, an increase of 6.7%.

IDC forecasts that China's PC shipments will grow 10.8% year over year in 2011. Although overall growth could slow down, opportunities in tier-4, tier-5, and tier-6 cities are expected to sustain their projected robust growth of 14.3% annually.

Fiona Wu, research manager, Computing Systems Research group for IDC China said, "China's 12th Five-Year Plan outlines the government's policies to continue to support less developed areas and gradually reduce the gap between areas. These policies include re-energizing the old industrial zones in Northeast China, and further improving the development of Western regions. These preferential policies are expected to further drive growth of PC shipments into these areas." Wu predicts that PC shipments in these two areas will increase 12.1% and 11.6% respectively in 2011, growing faster than the national average.

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About IDC

International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community to make fact-based decisions on technology purchases and business strategy. More than 1,000 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. For more than 47 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. You can learn more about IDC by visiting www.idc.com.

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