Sluggish Chinese demand for PCs dents global shipment figures

Global personal computer shipments slowed in February amid sluggish demand from the Chinese market, said International Data Corp, a United States-based industry consultancy.

Worldwide PC shipments may see a double-digit decline in the second quarter before rebounding in the second half of the year, said an IDC report released on Tuesday.

The lackluster demand from China, which accounted for more than one-fifth of global PC shipments in 2012, is having a significant effect on the industry.

In addition to the Chinese Lunar New Year period and other expected factors that weighed on the nation's PC demand, new budget cuts from the government, as well as anti-corruption measures were also hitting demand more than the industry had expected, according to the consultancy.

Chen Xudong, senior vice-president and general manager of Lenovo Group Ltd's China unit, said: "Shipments in the second quarter missed expectations because the government was going through a leadership shift. As the new government starts to operate and with new policies in place, the demand is expected to rebound in the second half of this year."

The biggest domestic PC maker shipped out a record-high figure of more than 14 million PCs in the fourth quarter of 2012, data from IDC showed.

Earlier this year, Wang Lida, director of the Central Government Procurement Center, said the government's procurement budget may stay around 20 billion yuan ($3.22 billion) this year, an amount similar to the 20.5 billion budget in 2012.

Wang added that tougher measures to curb spending are expected.

"Based on our latest quarterly figures, global PC shipments were expected to decline by 7.7 percent in the first quarter as vendors and the supply chain work through the Windows 8 transition," said Loren Loverde, an analyst at IDC.

However, the February data suggest the industry could see a drop of about 10 percent in the first quarter and a "mid-single-digit" decline in the second quarter due to slower demand growth in emerging markets.

"Even getting to positive growth in the second half of 2013 will take some attractive new PC designs and more competitive pricing relative to tablets and other products," said Loverde.

The company also estimated earlier this month that the growth potential in emerging markets is declining and becoming closer to that of developed regions.

Shipments in emerging markets dropped 1.4 percent last year, the first decline in history. Although a minor 0.6 percent increase is expected this year, the growth will remain in the single digits through 2017, said IDC.

"The PC market is still looking for updated models to gain traction and demonstrate sufficient appeal to drive growth in a very competitive market," Loverde added.

The PC market is also set to see continued constraints on demand as buyers favor other devices for their mobility and convenience, he said.

"We still don't see tablets as functional competitors to PCs, but they are winning consumer dollars with mobility and consumer appeal nevertheless," Loverde said.

We recommend:
China's financial might takes shape	Top 10 Chinese cities with highest urbanization quality	Chinese investment in Africa: Digging deeper
Top 10 innovative cities in Asia-Pacific	Nation may limit gold to 2% of foreign reserves	Lu Zhaoxi named Alibaba's new CEO