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PC patterns vary throughout China

Researcher IDC divides China into five subregions for a newly released report and discovers that each area has its own PC-buying characteristics.

SINGAPORE--China's infatuation with getting wired has made it the third-largest PC market in the world, but companies hoping to make a killing there shouldn't assume the country is homogeneous when it comes to PC buying, according to a new research report.

Researcher IDC divided China into five subregions for a newly released report and discovered that each area has its own PC-buying characteristics shaped by government policy, infrastructure and population wealth distribution.

"Vendors need to understand the vast diversity that exists in China's PC market," Kitty Fok, IDC Asia/Pacific associate director for personal systems research, said in a statement.

In the first half of this year, the country absorbed 7 percent of worldwide PC shipments, a total of 4.14 million PCs.

The most enthusiastic PC market is North China, accounting for 1.53 million units. This is mainly due to its status as the government's designated IT capital and also because it is the headquarters for most organizations throughout China.

Government, education, financial and large enterprise propel the demand in this region, which buys up the lion's share of the country's PCs.

Close on the heels of the North is East China, where first-half PC sales hit 1.23 million units. This is mainly due to Shanghai, which is a key financial center as well as the focal point for a government IT initiative.

"In addition, densely populated finance and telecommunication industries in this region help to push the demand for both IT solutions and PC hardware," noted the IDC report.

South China boasts a high PC penetration rate, but instead of plateauing, growth has continued, probably due to the region's relative affluence. Small businesses and manufacturing industries account for much of the PC demand, which stood at 641,000 units. Most IT companies also have their manufacturing in this region, and the local government has, therefore, been very supportive of the IT development within the region.

West China, which covers the largest geographical area, bought only 505,000 PCs in the first half. Growth is unlikely to take off, as the region continues to be inhibited by lack of infrastructure, low disposable incomes and a paucity of IT professionals, according to IDC.

Central China, covering two provinces, bought just 238,000 units, but has potential to grow because of its many universities.

By 2005, however, the composition and the concentration of PC shipments by region is likely to have shifted, as each region is predicted to have a different growth rate.

While the North is likely to lead in PC demand until 2005, the East should catch up quickly, and total PC shipments within North and East China will be even larger than Korea by 2004.

By the next phase of market growth, said Fok, "PC vendors will need more sophisticated subregional strategies to succeed in China's burgeoning market."

Staff writers Susan Tsang and Nawaz Marican reported from Singapore.