China has for the first time passed the U.S. to become the world’s biggest PC market, according to the latest quarterly shipments estimates by IDC, a U.S. IT market-research firm. Some 18.5 million units, worth $11.9 billion, shipped in China during the second quarter, compared to 17.7 million units, worth $11.7 billion, in the U.S., the firm says. That makes China account for 22% of the global PC market compared to the U.S.’s 21%. (IDC excludes tablets and other handhelds from its count.)
On a full year basis, IDC says, it still expects the U.S. to remain the largest market in 2011, with 73.5 million units forecast to be shipped versus 72.4 million in China. Next year, though, that order could be reversed, IDC predicts.
While this Bystander sees this tipping point as no more than symbolic of a trend that has been forming for some time (and China is already the world’s largest market for a range of products from steel to cars), it does confirm our thought that a Chinese buyer of HP’s PC business that is now up for sale would make sense, a successor to Lenovo’s purchase of IBM’s PC business in 1995.
A straw in the wind from the electronics industry about how strong recovery will remain in the second half of this year: we are hearing reports that PC orders are weakening, not just in China but from across the region, which will have a knock-on effect on chip makers. Our man with the robot soldering iron tells us that OEM makers are also seeing demand from Europe drop for all sorts of components and, for chip makers, slowing demand from Chinese car makers (which is a more concerning coalmine canary). This follows lackluster Labor Day retail sales in China for phones and TVs. So it seems that inventories are starting to back up.
Lenovo is one of the few Chinese manufacturers to have global brand. That brand has become strong enough that China’s largest PC maker, which is duking it out with Acer to be the world’s no 3, now says it will drop the IBM name on its ThinkPad machines two years ahead of the original 2010 deadline set when it bought the American firm’s PC arm in 2005 for $1.25 billion. Lenovo will use its own name on the roll-out of a new round of machines due next year.
Business has been brisk recently. The company has just reported a net profit of $105.3 million for the three months to end- September, compared with $37.9 million a year earlier, on revenue of $4.4 billion compared to $3.7 billion a year ago.
Filed under Economy, Markets