The Laptop Price War: Report From the Front

Posted on March 26, 2008
Filed Under China Business, China Distribution |

LAPTOP sales in China have grown rapidly, boosted by cheaper prices and the multitude of functions available, which has squeezed the market share of desktop computers, a Beijing-based research firm said yesterday.

The laptop revenue surged 33 percent year on year to hit 50.01 billion yuan (US$7.04 billion) in 2007, triple the growth rate of the domestic computer market. Revenue of the desktop computer sector grew by only 3.4 percent to 86.07 billion yuan last year, according to CCID Consulting, a research firm under the Ministry of Information Industry.

This is the market that PC vendors have been gearing up to chase in 2008. Founder, Lenovo, and Dell have all said they intend to expand their laptop production to meet demand. Chinese PC consumers are much like everyone else around the world: once they’ve used a laptop they realize it’s a lot more pleasant to use rather than a conventional desktop. As long as they are comfortable with the price premium, they much prefer laptops.

And that price premium is what attracts vendors. That extra dollop of cash is shrinking, however. The article notes that average laptop prices fell by RMB1000 last year and prices are expected to fall this year. Part of that is due to the introduction of simpler, cheaper laptops. It’s also due to the price war.