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Analyst: SARS may lift China PC sales

The severe acute respiratory syndrome outbreak in China may carry a silver lining for PC sellers, according to Taiwan-based analysts.

The severe acute respiratory syndrome (SARS) outbreak in China has dealt a hard blow to PC shipments in the People's Republic, according to a market analysis firm.

But in the months ahead, demand will go up, as SARS has made stuck-at-home users familiar with the online lifestyle and with using home offices, said Taiwan-based Market Intelligence Center (MIC).

"SARS fears have reverberated through the Chinese PC market, altering demand, buying behavior and the competitive landscape," according to a statement from MIC.

The pneumonialike disease has claimed over 280 lives in China, and over 5,000 have been diagnosed with the virus.

Normally bustling electronics malls in Beijing were ghost towns in March and April, causing consumer desktop demand in these shopping areas to drop as much as 50 percent.

Overall, sales of consumer desktop PCs in the Chinese capital fell between 75 and 85 percent.

Corporate desktop PCs were not spared either: Sales slid 10 to 15 percent below forecasts in March and April, according to MIC.

Looking ahead from May to September, consumer and corporate desktop PC demand is expected to shrink 30 percent and 5 percent respectively.

There will be a "downward adjustment" of between 15 and 20 percent for desktop PC sales in the second and third quarters of 2003 for China, said MIC.

Other points raised by the firm include:

• The drop in sales will be felt more in the SARS-hit northern, southern and northwest provinces than in the eastern, central, southwestern and northeastern areas during the second quarter of 2003.

• Vendors in large urban centers will feel the pain more than those in small and midsized cities.

• SARS fears will increase the power of advertising and raise the importance of Internet and telephone sales. Therefore, the big national brands will benefit. In fact, demand for national brands has begun to recover this month. Unbranded, or 'white box,' makers will be hardest hit.

• Demand from education and government sectors may be hurt by capital losses resulting from SARS, but a boost will come from post-exam summer sales, distance education and a growing number of home offices.

CNETAsia's John Lui reported from Singapore.