China now world's largest PC market - in its own way

IHS iSuppli statistics note unusual qualities in the Chinese market as it takes the top spot

China has overtaken the US as the global leader in PC sales – but desktops are just as popular as notebooks in the Asian giant.

Peter Lin, senior analyst at US research firm IHS, has confirmed that China in 2012 bought 69 million PCs, as compared to 66 million in the US. A year earlier, the US had been the leader across all PC categories.

"China's PC market also displays distinct characteristics that set it apart from the PC trade elsewhere, possessing a vast untapped rural market and unique consumer-purchasing patterns," said Lin. "While desktop PCs lagged notebooks in the world, both PC segments were on par in China with roughly an even 50-50 split."

There are other "distinct characteristics" that set China apart, he added. For example, consumer and commercial PCs enjoy an equal share of the market, compared to a 65:35 ratio across the rest of the world.

"A third pattern unique to the China PC market is the preferred notebook size of 14in, which accounts for more than 70 per cent of notebook PC shipments in the country. For the rest of the world, the 14in makes up less than 30 per cent [of sales]," Lin wrote.

Also, while mature PC markets in other parts of the world claim that 90 per cent come with a pre-installed OS, in China the comparable proportion is less than 50 per cent – and even lower in the desktop PC market.

The difference in the proportion of PC desktops and notebooks in China is unusual, partly because consumers globally tend to prefer more agile, small and mobile gadgets such as laptops to relatively bulky, stationary desktops, Lin said.

The large percentage of desktop PC shipments in China comes from huge demand in the country's rural areas, covering Tier 4 to Tier 6 cities and a substantial segment of the 1.34bn population, he said.

Most first-time buyers live in these rural areas, and the Chinese government is also moving to invest 40 trillian yuan ($6.4 trillion) to develop rural infrastructure over the next 10 years – opening up yet more opportunity for OEMs.

"The market will change gradually as desktop PCs fend off strong competition from the high-value proposition presented by notebooks, which will surpass desktops in the country by 2014, tracking the worldwide desktop-to-notebook PC ratio of 36 to 64 per cent more closely," Lin concluded.

Also, there is one area where China shares a trait with the rest of the world's PC market: in China, as well as elsewhere, overall PC demand is only expected to grow three to four per cent this year, partly because consumers increasingly favour smartphones and similar.

Lin's comments relate to new IHS market intelligence available in its PC Dynamics market brief series.