China and Other Emerging Markets Are Key to Asia Pacific's Continuing Growth The Asia Pacific personal computer (PC) market is forecast to grow 20.3 percent in 2010, reaching 114.6 million unit shipments, according to Gartner’s latest forecast. Spending on PCs in Asia Pacific is forecast to grow 12.4 percent in 2010, compared to only 2.9 percent in 2009, due to a sharper decline in average selling prices for PCs in 2009.
“While overall growth in Asia Pacific was strong in 2009, at a country level India and the more mature markets with high PC penetration exhibited weak PC shipments,” said Lillian Tay, principal research analyst at Gartner. “However, the improving worldwide economy should lead to better confidence to invest in 2010, especially in Taiwan, South Korea and Singapore. Similarly in India, PC buyers are now more confident to spend, with employment on the upswing.”
In 2009, PC unit growth was spearheaded by China and the South Asian markets. China took 59 percent of all PCs shipped in the region, up from 54 percent in 2008. In 2010, government stimulus programs, including stimulation of domestic consumption, helped to mitigate the adverse effect of the US and European recessions on these export-oriented economies. Gartner expects China to represent 60 percent of all PCs shipped in Asia Pacific and 19 percent of PC shipments worldwide in 2010.
Between 2009 and 2014, the Asia Pacific PC market will register a compound average growth rate (CAGR) of 15.7 percent. Emerging PC markets will lead the growth, particularly China and India. South Asian markets such as Indonesia, the Philippines and Vietnam are also expected to perform strongly.
“In the mature PC markets, we expect stronger growth for 2010 and 2011 as PC replacements gain momentum. This reflects an expectation of increased IT budgets and adoption of Windows 7 by organisations replacing PCs that are beyond their useful life,” said Ms Tay.
Mobile-for-desk-based PC substitution continues unabated and first-time PC buyers are increasingly turning to mobile PCs. Mobile PC units will grow 35.2 percent in 2010 reaching 53.2 million. In 2011, a milestone will be reached where mobile PC shipments will take 51 percent share of all PCs shipped in Asia Pacific.
Overall Asia Pacific desk-based PC unit shipments will increase 9.9 percent to 61.4 million units in 2010, largely driven by the success of a rural PC program in China, where 70 percent to 80 percent of PCs shipped are desk-based PCs. In other markets it will be driven by the replacement of aged desk-based PCs.
China leading PC growth in Asia Pacific
In China, PC shipment growth is expected to reach 22.1 percent. Government and education segments will have the most stable demand for PCs in the professional market. The government announced early this year that it will try to increase education spending to four percent of 2010 GDP and is focused on creating opportunities in schools and kindergartens using PCs.
The Chinese government is also looking inward in stimulating domestic consumption to drive China's growth and rely less on export-oriented growth. Therefore, the government can be expected to promote more entrepreneurship and initiatives to help small and midsize businesses become agile and productive, with the PC an integral tool in office productivity.
Also driving growth in China will be the urbanisation of an estimated 65 million people as they move from the country to small and midsize cities and towns within five years. Urbanisation requires better infrastructure, and therefore the need for more electrical appliances to improve the standard of living, with PCs one of these items.
Healthy growth expected in India
India’s recovering economy, which is expected to grow 8.5 percent in 2010, will be the main driver behind PC shipment growth of 19.4 percent, compared to a decline of 3.8 percent in 2009. Growth will be restored to industries most affected by the recession, spurring major hiring that will require increased PC budgets to support new employees. There is more "bullishness" witnessed among small and midsize businesses, while government and education are the other two verticals that have increased their spending. At the same time, increasing job opportunities creates a sense of optimism and security among consumers, leading to an increase in discretionary spending.
The rural economy is doing better, which should lead to incremental PC sales This opportunity is immense, but it will need more improvements in basic infrastructure, such as electricity and telecommunications, which will take another two to three years.
Mature markets will see strongest growth in business sector
In more mature markets (Taiwan, South Korea, Australia, New Zealand, Hong Kong and Singapore), business will be the biggest growth area in 2010 due to PC replacements that were held off in the past 18 months.
Mobile PC growth will continue to be strong as more desk-based PCs are replaced by mobile PCs due to the need for mobility and flexibility in working anywhere. Desk-based PC growth will mainly be sustained by government and education, as well as areas of business. The professional market for desk-based PCs will grow slightly in 2010 and 2011 and decrease from then onward.
For the home market, the desk-based PC remains popular with gamers and buyers who look for flexibility in configuration and performance. Demand for mini-notebooks is expected to taper off in these markets from 2010, but will remain attractive to students where the low price fits the budget. Mini-notebooks will contribute increasingly less growth over the period as they face increasing competition from other value-priced better performance mobile PCs and new devices like Apple's iPad.
Additional information is available in the Gartner report "Forecast Analysis: PCs, Asia/Pacific, June 2010 Update” http://www.gartner.com/resId=1388423
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