Fri, Mar 12, 2004 page10

• Notebook makers urged to explore China's hinterland

  • By Amber Chung / STAFF REPORTER
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  Although big corporate customers provided most of the demand for China's notebook computer market last year, Taiwanese notebook brands should target China's small- and medium-sized enterprises to enhance their business base there, an industry watcher said yesterday.

  Notebook sales in China skyrocketed to 1.26 million units last year from 885,000 the previous year, with small and medium enterprises (SME) consuming about 34 percent of the total, compared with large enterprises' 39 percent, the Chinese Information and Communication Technology Co (CICT, 中華資通) reported yesterday.

  SME customers are expected to buy around 959,000 notebooks next year, exceeding the 909,000 by large enterprises, CICT president Vincent Huang (黃富琮) said at a briefing on China's notebook market.

  CICT is a local agent for the China Center for Information Industry Development (CCID), a research and survey institute under China's Ministry of Information Industry.

  "Taiwan's notebook makers could make inroads into China's northeast and southwest regions, where competition is less fierce than other regions," Huang said.

  As local governments in these two areas are eager to boost economic development, they would welcome Taiwanese companies to establish factories there, which would also make it easy for the companies to attract customers in local governments and enterprises, he said.

  Some Taiwanese notebook vendors, however, are suspicious about the idea of setting up production bases in China's remote areas just to get access to the market there.

  "The ports in the northeast region are frozen half of the year while the southwest part lacks any harbors," said Sunny Han (韓德行), global brand marketing director at Asustek Computer Inc (華碩電腦), the ninth largest notebook brand in China with sales of 61,000 units last year.

  It does not seem economically efficient to set up plants in these areas just to enter the markets there in light of the geographic disadvantages, he said.

  BenQ Corp (明基電通) said notebook makers should ponder the purpose and economic effectiveness of investing in factories in remote areas of China.

  "Defining our brand as `urban fashion' targeting the mid-level to upscale market, we will still focus on regions with strong purchasing power such as north, east and south China," said Jerry Wang (王文璨), BenQ's chief marketing officer.

  BenQ, which has boosted its image by helping build hospitals in China, hopes to become the sixth or seventh largest vendor with sales of around 100,000 notebooks this year.

  CCID's report estimated that sales of notebooks would reach 1.8 million units in China this year, up 42.9 percent from last year.

  Legend Holdings Ltd (聯想) led the market with 193,000 units last year, followed by International Business Machines Corp's (IBM) 180,000 units and Dell Inc's 169,000 units. Taiwan's Acer Inc ranked sixth with 71,000 units.

  Sales will rise 44.4 percent next year, and then grow an average of 20 percent until 2008, CCID estimated.
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