CAMBRIDGE, Mass.--(BUSINESS WIRE)--Dec. 14, 2004--By the end of
the decade, the number of personal computers in use worldwide will
reach almost 1.3 billion, up from 575 million today, according to a
new report by Forrester Research, Inc. (Nasdaq: FORR) that sized PC
adoption rates across 16 emerging markets such as China, Russia, and
India.
Mature markets in the US, Europe, and Asia-Pacific will add 150
million new PCs to the world market by 2010. More significant growth
will come from emerging markets, for which Forrester forecasts that
566 million new PCs will be in use by 2010, up from 75 million in
2003, a 31% CAGR.
Competition for market share will pit industry leaders like Dell
and HP against local emerging market manufacturers and fundamentally
change the rules of the game. Price will be the key driver of the pace
of adoption. "Today's products from Western PC vendors won't dominate
in those markets in the long term," says Forrester Senior Analyst
Simon Yates. "Instead, local PC makers like Lenovo Group in China and
Aquarius in Russia that can better tailor the PC form factor, price
point, and applications to their local markets will ultimately win the
market share battle."
EMERGING NATIONS: PROJECTIONS FOR 2010
-- China. China will see 178 million new PC users.
-- India. India will get 80 million new PC users. Despite gaining
prominence as a center for outsourcing, India today has one of
the lowest adoption rates in the world. However, PC adoption
will grow at a 37% annual rate through the end of the decade.
-- Indonesia. There will be 40 million new PC users in Indonesia
(40% growth per year -- from 2.6 million in 2003 to 40
million).
-- Mexico. Forty-six percent of Mexicans will own a PC -- the
deepest penetration of PCs as a percentage of population of
all 16 emerging markets analyzed.
PC ADOPTION TO OCCUR IN THREE WAVES IN EMERGING MARKETS
Western PC manufacturers will win the first round, but local
manufacturers will dominate in the long term.
-- Wave 1: wealthy urbanites. Wealthy urbanites, educated,
brand-conscious, sophisticated PC users, started with
entry-level PCs but now demand more power from their PCs and
are motivated to purchase technology from Western firms like
Dell, HP, and IBM.
-- Wave 2: middle-class literates. This group represents the
sweet spot for PC unit volume sales. They are educated
consumers, first-time PC buyers, and are targets for local PC
makers that tailor the PC form, price points, and application
to local market conditions. They are also price-conscious and
brand-irrelevant.
-- Wave 3: rural mass market. It'll be a long-term challenge for
the PC industry to attract this segment to the PC platform;
they are likely to choose PC alternatives, such as
smartphones. This group is rural, low-income, and very
price-sensitive. They lack community infrastructure, funding,
communications, and reliable power sources to support PC
platforms.
WHAT IT MEANS
Forrester believes the PC industry must innovate to thrive. To
grow emerging markets beyond the early adopters, firms must develop a
new generation of PC products that are affordable, simple, localized,
useful, durable, and serviceable.
-- Western versus local PC builders. The advantage goes to the
locals, as evidenced in the announced sale of IBM's PC unit to
China's Lenovo Group, demonstrating IBM's understanding that a
majority of the growth in the PC sector will come from
emerging markets and be led by local manufacturers.
-- Windows versus Linux. The advantage goes to Linux.
Establishing the Windows platform in these new markets will be
an uphill battle. No Windows legacy in these markets means
that local manufacturers can drive down prices by installing
Linux instead.
-- Wired versus wireless providers. The advantage goes to
wireless. Investments in landline networks outside major city
centers won't pay off, so rural populations must wait for new
wireless technologies like WiMAX and 3G GSM networks for
connectivity. In China, for example, Nokia and Siemens have
invested heavily in new GSM network coverage for China Mobile
and China Unicom, the largest mobile service providers in the
country.
The 16 emerging markets analyzed in this report include, in order
of population size: China, India, Indonesia, Brazil, Pakistan, Russia,
Nigeria, Bangladesh, Mexico, Philippines, Vietnam, Egypt, Ethiopia,
Turkey, Iran, and Thailand.
The research report mentioned in this release, "Sizing The
Emerging-Nation PC Market," is available to Forrester WholeView 2(TM)
clients and can be found at www.forrester.com.
Forrester is an independent technology research company that
provides pragmatic and forward-thinking advice about technology's
impact on business. Business, marketing, and IT professionals
worldwide collaborate with Forrester to align their technology
investments with their business goals. Forrester offers products and
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Community. Established in 1983, Forrester is headquartered in
Cambridge, Mass. For additional information, visit www.forrester.com.
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SOURCE: Forrester Research, Inc.
