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Tuesday, 29 October, 2002, 11:58 GMT
China to overtake Japan in PC sales
Laptop PCs on display
More people can afford to own their own PC
China looks set to become the world's biggest computer market outside the US, overtaking its neighbour Japan.

The stuttering economy there has forced Japanese PC makers to cut back their expectations for sales this year to little more than 10 million units.

Companies and individuals remain unwilling to splash out on new PCs before they have to, which is a new development in a culture that is traditionally hyper-sensitive to having the next technological "big thing".

That leaves the way clear for China's burgeoning tech economy to move up into second spot, on estimates that 13 million units will have been sold in 2002.

"China's PC market is certain to top that of Japan this year, becoming the world's second biggest market after the United States," said Masatsugu Shinozaki, spokesman for the Japan Electronics and Information Technology Industries Association (JEITA).

Although China's population outnumbers Japan's tenfold, its markets are much less mature - and the penetration of hi-tech products is tiny compared to its smaller neighbour.

Commoditised

Japan's problem is that although its technology industry remains one of the biggest innovators, much of the creative energy is expended on the cellphone and small device market.

In Japan, as elsewhere, desktop and laptop computers have become largely about shifting boxes rather than selling on novelty - even if laptops in Tokyo stores continue to shrink inexorably.

Just like US and European computer users, Japanese buyers are opting out of the rapid upgrade cycle seen in the 1990s.

Last fiscal year - April 2001-March 2002 - saw the first decline in PC sales since 1997-8, a dismal showing after double-digit percentage gains in previous years.

World Cup troubles

There may still be a pickup as Japan heads into the Christmas shopping season, JEITA believes.

But so far this year has not been encouraging - a trend JEITA blamed in part for this summer's 2002 Japan-Korea World Cup and the consequent rise in TV sales.

Between April and September Japanese computer makers sold just 4.56 million PCs, down 10% from the previous year.

"First half sales were worse than we had expected," said JEITA spokesman Masatsugu Shinozaki, "making it hard to predict when businesses will regain confidence and launch investment."

See also:

24 Sep 02 | Business
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