2005 Marked the Strongest Growth in the Past Five Years for the Asia/Pacific (excluding Japan) PC Market

IDC: The Asia/Pacific (excluding Japan) PC market totaled 11.3 million units in the fourth quarter of 2005, thus bringing full year 2005 shipments to 41.1 million units, or 18% growth for the year. With sequential growth of 2% and a year-on-year growth of 19%, 4Q05 PC shipments came in 1% above IDC’s initial forecasts, with China, Hong Kong, Korea and Singapore exceeding expectations, while India and Taiwan in particular, performed worse than expected.

In no small part due to more affordable prices and a hot notebook market, 2005 was a particularly good year for Asia's PC market, achieving growth rates not seen in the last five years. While the market may not necessarily continue at such record rates due to completed Y2K replacement purchases and the maturation of certain markets, vendors can still look forward to at least 13% growth in 2006, which is still quite admirable and thus represents a welcome opportunity for the IT industry in the region.

In 4Q05, market leader Lenovo continued to widen its lead on its closest competitor HP, as its total PC shipments grew 10% over the previous quarter compared to the latter's 9% contraction. Out of the top 5 PC vendors, Dell recorded the strongest sequential growth of 19% as it recovered from an abnormal lull in 3Q05. Meanwhile, Founder recorded a modest 5% growth and Acer contracted by 3% sequentially.

4Q05 Highlights

The PC market in China was given a boost in 4Q05 from the launch of two IT projects for schools nationwide. After garnering interest in 3Q05, 64-bit desktop PCs moved further into mainstream Chinese consumers as more vendors upgraded their offerings. In Korea, PC replacement demand from consumers led the market's strong year-on-year growth of 26%. Australia came close to market expectations and grew 2% sequentially thanks to better consumer demand prior to the Christmas sales period.

India's PC market slowed in 4Q05 as several holidays during the quarter hampered commercial spending while a government contract failed to generate enough momentum. The situation was exacerbated by currency fluctuations that resulted in product price hikes. Meanwhile in Taiwan, the cold weather resulted in softer demand while high inventory levels left over from 3Q05 hampered the intake of new PC shipments.

“PC vendors in Singapore attempted to maintain notebook shipments through schemes like ISP bundles, while desktop demand was bolstered by increased spending in the public sector, said Reuben Tan, Research Manager of Asia/Pacific Personal Systems Research at IDC. The SITEX show, however, was not as robust as the trade shows earlier in the year, and increasing price competition and new entrants to the market drove notebook profitability downwards.

Full Year 2005 Highlights

Total PC shipments in the region in 2005 reached 41.1 million units, representing an 18% growth from 2004. Notebooks were particularly solid as all the countries in the region recorded double-digit year-on-year growth rates in shipments in 2005. In the case of desktops, all the countries grew year-on-year except for New Zealand and Taiwan, which shrunk by 10% and 3%, respectively.

Australia, China, India and Korea contributed to most of the region's growth in 2005. In China, PC price wars, greater vendor penetration in the upper-tier cities, and stronger IT demand from SMBs contributed to the market's growth in 2005. In India, lower PC prices boosted the market after it emerged from the WTO tariff drops. Meanwhile, low-end PCs and entry-level notebooks helped maintain the momentum in the Korean market. Finally, Australia's notebook market skyrocketed after the first sub-A$1,000 (US$750) notebooks made their appearance in the second quarter.

: Source: IDC, January 2006

Asia/Pacific (excluding Japan) PC market Publ 20060120