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China risks mountain of unsold PCs

Analyst warns of sales drop-off

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China’s domestic PC market is set to go from strength to strength in 2012 with shipments forecast to rise at three times the rate of the global market, although analysts warn there could be trouble ahead.

The China Electronics Research report from market watcher IHS iSuppli claimed that PC shipments in the People’s Republic would reach 83.6 million units in 2012, up 13.1 per cent from the 73.9 million units last year, compared to a rise of just 4.4 per cent globally.

To put this in further perspective, iSuppli claims China will account for just under a quarter of the world’s total shipments of 368 million units and a whopping 63 per cent of all PCs shipped in Asia Pacific this year.

Portable computer shipments will just edge those of desktop PCs, with strong economic growth and unprecedented demand from private enterprises fuelling the impressive stats, the analyst said.

As predicted by Gartner recently, home-grown PC giant Lenovo is in the lead, forecast to ship 29.9 million units domestically this year – one third of China’s domestic PC market.

Following Lenovo are Acer with an 11 per cent market share; Dell (8 per cent); HP (6 per cent); and Asus (6 per cent).

There are no full stats available yet for the growth of China’s export market in 2012 but Taiwanese ODMs including Compal, Foxconn and Pegatron are set to dominate again.

However, shipments do not equal sales and iSuppli’s China analyst Elaine Zhi warned that if customer demand does not keep up, there could be inventory problems ahead.

“I think the sales of domestic PCs will drop off because of reduced consumer demand and changes of market strategy, as well as the economy,” she told The Reg.

“People are more attracted to smartphones and tablets at the moment. Unsold inventory is unavoidable and will be even worse at the end of the year if there is no new policy to boost the market.”

A similar warning shot came from Gartner last week, with research director Ranjit Atwal claiming that in terms of sales into the channel, Lenovo had “massively outgrown the market”.

Acer made just such a misjudgement in 2011 and is only now beginning to recover.

It still remains to be seen whether all the doom-laden prophesies of a Chinese economic crash turn out to be true, although its economy is certainly set to slow down a little.

The only note of real pessimism in the past few months has come from Samsung, whose China CEO, Kim Young-ha, went on record in May complaining the government's austerity measures were hurting consumer demand. ®

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Re: The Elephant in the room

wouldn't it be interesting if the Chinese sold off this overstock at discounted prices with Linux Mint or another popular consumer friendly Linux on it.

Here's hoping.

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The Elephant in the room

The stock overhang is an even bigger problem if it is not Windows 8 compatible. Without a qualified UEFI BIOS in place, then this is strictly Win7 or Linux stock.

With the success of Win8 not guaranteed by any means then there will need to be stock capable of addressing both markets and this can only be achieved with an installed UEFI with a disable option. Microsoft does not allow disable on it's ARM machines but does on it's X86 machines. If X86 PC's are installed with a disable option then the panic currently felt in the Linux community will be unfounded.

It seems unfair to the Chinese manufacturers on which Microsoft depends as platforms for it's product sales, are now being held to ransom by it's product requirements and delivery schedules.

We live in interesting times for sure.

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Overstock

Will we be seeing computers in dollar stores soon?

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