US computer maker Hewlett-Packard said it would focus on low-cost computers, including netbooks and PCs for rural buyers, to boost its market share in China even as the country remained a bright spot for sales amid the global economic slowdown.
See Chin Teik, senior vice-president for HP Asia Pacific & Japan, told reporters at a new products launch on Wednesday that the company planned to grab more market share in China with affordable personal computers.
"We want to focus on this strategy to get more market share," See said.
The company would not, however, chase market share at any cost and was mindful that the low-cost strategy might hurt its profit margins, he said.
See said HP was now in talks with Chinese telecom operators to launch more netbooks, which sacrifices some of the features of a full-sized notebook but are much cheaper, portable and enable wireless access to the Internet as long as there is a cell phone signal.
He hoped the new products would stimulate sluggish consumer demand and attract new users who may not be able to afford a full-sized laptop.
"We see it as a secondary device, not a replacement device," said See, noting that he did not worry that the increasing demands for netbooks would hurt sales of full-sized laptops.
The global economic downturn had impacted consumers and companies across the world and reduced their IT purchase plan, dragging down global PC shipments by 7 percent during the first three months of 2009, according to figures from research firm IDC.
Isaiah Cheung, vice-president of the Personal Systems Group at HP's mainland and Hong Kong operations, said the company was seeing a more positive consumer demand in the country now than during the end of last year. This was chiefly due to the 4-trillion-yuan economic stimulus plan which, among other things, had also provided for subsidies to PC buyers in rural areas.
However, there were no signs yet of a market turnaround, he pointed out.
HP's market share in China increased to 13.7 percent in the first quarter of 2009 from 10.9 percent in the last quarter of 2008, according to IDC. That made HP the largest foreign computer maker in China, next only to market leader Lenovo.
Cheung said sales growth in China was expected to shift from big cities to second-tier ones, and sales in rural China, where most people still did not own computers, would see significant growth in the following years.
He said HP would pay more attention to the inland areas in future as PC growth in the country's coastal areas had slowed.
In October last year, HP launched a new manufacturing plant in Chongqing. Last month, the company kicked off a program that aimed to establish 100 computer centers in western rural areas.
(China Daily May 29, 2009)
