By the end of the decade, the number of PCs in use worldwide will reach almost 1.3 billion, up from the 575 million today, Forrester Research claims. Growth will be due to sizeable PC adoption rates in emerging markets such as China, Russia and India.
China is expected to lead the growth, with 178 million new PC users by 2010. Some 566 million new PCs are expected to be in use in emerging markets by 2010, based on a study of adoption rates across 16 emerging markets. The 575 million PCs currently in use globally include about 75 million in emerging markets.
Mature markets in the US, Europe and Asia-Pacific will add 150 million new PCs to the world market by 2010.
Competition for market share will pit industry leaders such as Dell and Hewlett-Packard (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 such as 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.”
The 16 emerging markets analysed include, in order of population size: China, India, Indonesia, Brazil, Pakistan, Russia, Nigeria, Bangladesh, Mexico, Philippines, Vietnam, Egypt, Ethiopia, Turkey, Iran and Thailand.
Adoption rates in these emerging markets will occur in three key waves: the first wave will be lead by wealthy urbanites; the second will follow in the shape of literate middle-class first-time PC buyers; and the third wave — the toughest to crack — will be lead by a rural mass market.
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, localised, useful, durable and serviceable.
In terms of how established brands such as Dell and HP will shape up against new manufacturers, Forrester reckons the advantage goes to the locals, as evidenced in the recently 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.
Looking at operating systems and software, including the enduring battle between Windows and Linux, Forrester believes 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 local manufacturers can drive down prices by installing Linux instead.
And in terms of broadband access, more specifically wired versus wireless providers, Forrester has decided that the advantage goes to wireless. Investments in landline networks outside major city centres won’t pay off, so rural populations must wait for new wireless technologies such as 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.
By John Kennedy