- With the spread of severe acute respiratory syndrome throughout southern and northern China since early 2003, SARS fears have reverberated through the Chinese PC market, altering demand, buying behavior, and the competitive landscape.
PC shopping areas have seen a sharp drop in consumers, and as SARS infections in Beijing peaked between late April and early March, overall Chinese consumer desktop PC demand in PC shopping areas dropped between 40% and 50% from original forecasts; demand for consumer desktop PCs in Beijing witnessed a drop between 75% and 85%. Chinese corporate desktop PCs slid 10% to 15% below forecasts.
Between May and September of 2003 the drop in consumer and corporate desktop PC demand is expected to shrink to 30% and 5% respectively from original forecasts, yielding a downward adjustment between 15% and 20% for desktop PC sales in the second and third quarters of 2003. Yet in the long term, SARS is likely to have a positive impact on the Chinese desktop PC market due to a rise in demand for distance education and home offices.
With the considerable drop in sales, northern, southern, and northwest China will feel a much stronger impact than eastern, central, southwestern, and northeastern areas during the second quarter of 2003. Additionally, large urban centers will experience much stronger repercussions than small and mid-sized cities, and the effects of SARS will echo out with a much more detrimental effect in consumer segment than the corporate market.
SARS fears will also have a strong influence on buying behavior, increasing the sway of advertising and raising the importance of Internet and telephone commerce. National-scale brands will hence be the greatest beneficiaries; after passing through the low valley of sales seen in April, demand for national brands has begun to witness a swift recovery in May. Clone makers, however, will be the hardest hit.
As SARS continues to affect Chinese PC buying behavior, system makers that possess the ability to flexibly adjust among target customers, regional markets, sales channels, and promotional tools, will bring about shifts in the competitive landscape. Additionally, PC makers will need to watch whether procurement demand from education and government sectors will be dampened by capital losses resulting from the epidemic, as well as upturns in demand from post-exam summer sales, distance education, and a growing number of home offices.