China, India PC sales defying slowdown

Jennifer Tan

SINGAPORE: Intel Corp., the world's largest microchip maker, said it expected demand for computers in India and China to continue to soar despite a possible slowdown in Asian economic growth this year.

"The growth prospects in India and China remain very strong," John Antone, Intel's Asia Pacific general manager, told Reuters in an interview.

"We've seen 30 to 35 percent year-on-year unit shipment growth in India over the last few years and we expect the very high rates to continue."

China, the world's second-largest PC market, would continue to enjoy 15-20 percent annual growth in PC unit shipments, he added.

"We expect in another five years, China could become the world's largest consumer of PCs."

Chinese PC sales rose 19 percent to 16 million units last year, according to preliminary International Data Corp (IDC) figures, while U.S. demand grew 11 percent to 58 million. Indian growth last year was 31 percent.

Though regional economic engines may cool down in 2005 as the U.S. economy slows, Asian PC demand was likely to stay resilient.

"In China and India, there are three billion people, of which 80 to 90 percent do not own or have access to computing and while not completely isolated from worldwide economic growth, it appears that demand for PCs is going to remain strong," he added.

Asia Pacific ex-Japan contributed about 46 percent of Intel's total revenue in the fourth quarter, with Japan accounting for about nine percent. Intel's microprocessors, the "brains" of a personal computer, are used in 80 percent of the world's PCs.

The Asia Pacific ex-Japan saw total PC shipments of 34 million units last year, 16 percent higher than in 2003. Growth is expected to ease to 11 percent this year, IDC said.

Worldwide PC demand is expected to grow 10 percent in 2005, down from a 12 percent growth in 2004.

Notebook computers would remain a major growth driver in the more mature markets of South Korea, Hong Kong, Singapore and Australia, Antone said.

"In the last year, and we expect for the coming year, in mature markets, desktop unit sales would be flat and all the incremental growth would come from notebooks."

Over the next few years, notebooks as a percentage of total PCs consumed would rise to a third from a quarter currently, he said.

This month, Intel reported its highest-ever quarterly revenue of $9.6 billion in the fourth quarter ended December 25, on a net profit of $2.12 billion, topping analysts' expectations.