US Computer Companies Learning How to Win in China
A flurry of news this week suggested the world’s biggest PC manufacturers are figuring out how to win emerging markets, especially China – a key market that saw PC sales grow 21% in 2006 compared to 2.6% in the US and 10% worldwide (IDC).
Dell’s simplified, low-cost EC280 PC was launched in China, and the company is setting up demonstration kiosks where consumers can handle a machine before ordering it. Dell also quietly announced they are planning to expand the number of PC and notebook models that can be ordered with Linux – another potential cost saver for emerging-market consumers.
HP has wisely opened 2000 retail centers in large cities, though Chinese market leader Lenovo (with 36% market share) has 10,000 more stores in smaller cities. HP’s strategy, along with a growing preference for branded computers among the booming middle class, has increased HP’s market share from 4 to 9% since 2003.
To expand their presence in outlying cities, HP and Dell will either have to convince thousands of retailers to give them shelf space, create a parallel distribution network, or explore alternative financing and distribution models (e.g., with utilities, ISPs, rural banks and agricultural cooperatives) similar to Lenovo/Microsoft’s FlexGo.
Also in the news this week
- Will Microsoft’s