2007 to be Positive for Asia's PC Market, Driven by Key Markets Such as China and India, IDC Reports

January 19, 2007

Singapore and Hong Kong, January 19, 2007 –

IDC's preliminary results show that the Asia/Pacific (excluding Japan) PC market totaled 13.1 million units in the fourth quarter of 2006, representing a 2% sequential growth and a 14% year-on-year growth. Total 4Q06 shipments for the region came in just 2% below than IDC’s initial forecasts, and, save for Taiwan, all the countries managed to grow year-on-year during the quarter.

"Despite the political upheaval in some parts of Asia in 2006, the PC market proved highly resilient with 17% annual growth. Spurred by increasingly affordable models and healthy competition among the vendors, interest in notebooks also reached record levels,” said Bryan Ma, Director of Asia/Pacific Personal Systems Research at IDC. "2007 should grow by at least 15%, which is slightly lower than 2006 due to the increasing sizes of the markets, but is still very healthy with the weight of key markets such as China and India behind it."

There were no changes to the Top 5 PC vendor rankings in 4Q06. In first place, Lenovo grew its market share slightly as it continued to expand in China and India. HP managed to post the strongest year-on-year growth rate among the Top 5 vendors, fueled by a very successful run in notebooks during the quarter. Dell came off its 3Q06 peak slightly but still managed to hold onto its third position. Founder came in fourth place in 4Q06, and this was followed by Acer.

4Q06 Highlights

India had one of the strongest year-on-year growth rates in the region in 4Q06, fueled by a continued economic momentum that allowed the market to meet its forecasts this quarter. China’s PC market grew in 4Q06 as demand from the government, SMBs, and large business sectors progressed. Korea’s PC market came in softer than expected as poor consumer sentiment there impacted spending. Taiwan’s PC market declined quarter-on-quarter due to the late start of the CToC (Central Trust of China) tender.

“Singapore's 4Q06 PC sales declined sequentially as various ministries delayed their IT spending in anticipation of the upcoming SOE deployment in mid-2007. The fourth quarter’s PC Show, SITEX, also proved less successful than the previous quarter's show," said Reuben Tan, Research Manager of Asia/Pacific Personal Systems Research at IDC. "Still, the market generally met forecasts and managed to post a solid 15% growth over the same period one year ago."

Kathy Sin, Research Manager of Asia/Pacific Personal Systems Research at IDC, said, “As expected, Hong Kong's PC market contracted as it came off the third quarter's peak period for education sales. However, year-on-year growth was healthy at 12%, thanks to various retail promotions and discounts on selected models during the quarter. ”

Full Year 2006 Highlights

Total PC shipments in the region in 2006 reached 48.3 million units, representing a 17% growth over 2005. Notebook shipments grew rapidly at 43% year-on-year. Overall desktop growth remained healthy at 9% year-on-year, even as shipments to some countries declined . Notebooks also took up a larger piece of the pie in 2006, forming 27% of all PC shipments, up from 22% the year before.

Much of the region's growth in 2006 came from the PC markets in China, India, and Korea. National IT projects for schools and stronger demand from SMBs supported China's growth last year. Meanwhile in India, aggressive marketing coupled with a good economic sentiment boosted the domestic PC market in 2006. Despite economic and political uncertainties (and even distractions from events such as the World Cup soccer tournament), Korea's overall PC market still registered growth thanks to spending from areas such as the government and even Internet cafés.

*Note: Data for Lenovo includes shipments for IBM PCD (including Desktop and Portable PCs and excluding x86 Servers and Personal Workstations) starting in 2Q05, and only Lenovo data for prior quarters. This reflects the legal status of the companies, which merged during the second quarter of 2005. For historical growth analysis however, IDC has provided a merged IBM PCD + Lenovo line item at the end of this table.

Source: IDC, January 2007

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