Fri, Mar 26, 2004 - Page 10 News List

PC makers urged to diversify

LOWERING RISK Industry watchers said the nation's computer makers should not only look at expanding in China but also diversify the markets that they compete in

By Amber Chung  /  STAFF REPORTER

The nation's personal computer makers should diversify their overseas markets and expand in the massive but competitive China market, industry watchers said yesterday.

"Taiwanese computer manufacturers cannot forget the China market but, meanwhile, they should expand their business to other countries," Kitty Fok (霍錦潔), vice president of the central research group at IDC Asia Pacific, told reporters at a briefing on the PC market.

The Chinese market is highly competitive, with globally renowned brands like IBM and Dell battling with leading local brands such as Legend, Fok said, adding that the margin was relatively low compared to other markets.

Acer Inc, Taiwan's third-largest computer company by sales, provides a good model for diversifying markets, she said.

Of Acer's PC shipments last year, 63 percent went to Europe, according to the company. Acer declined to reveal its total PC shipments for the year.

It was ranked fourth in Western Europe's PC market last year -- behind HP, Dell and Fujitsu -- with sales of 2.52 million units, 50.7 percent more than the previous year.

Acer's laptops were the No. 1 seller in some European countries, including Italy, Germany and the Netherlands. It was also No. 1 in Taiwan last year with 20 percent market share, followed by HP and IBM. It was the leading brand in some Asian countries, such as India and Indonesia, Fok said.

PC sales in Western Europe are expected to grow 12 percent this year, mainly through replacement demand. Demand in the Asia-Pacific region will rise 14 percent, driven by demand from countries with a low penetration for PCs, according to IDC.

Desktop PCs will still dominate the Asia-Pacific market, making up about 80 percent of the market for the next five years, because they are around half the price of a notebook, Fok said.

Sales in Taiwan are expected to be around 1.5 million units this year, a 7 percent increase on last year, as the market already saw a strong pick-up in the second half of last year fuelled by a stable economy and replacement demand after the SARS epidemic.

"Replacement demand and consumer needs remain the driving force in the market," Fok said, adding that mobility is the key to success.

Laptops are estimated to grow as a percentage of total computer sales in Taiwan to 37 percent, up 1 percentage point from last year, rising to 42 percent by 2008.

"Notebooks are expected to grow 4 percentage points to 17 percent of 26 million PC shipments this year and price erosion will continue to support its growth," Fok said, predicting notebooks would make up 20 percent of all PCs sold in China in 2008.

PC prices will remain stable, with makers absorbing the rise in raw material prices to remain competitive, Fok said.

The average price of a PC this year may drop 5 percent from last year, according to the IDC.

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