SHANGHAI, Oct. 29 (UPI) -- Liu Yiming, a 23-year-old waitress, had to scrounge and save for more than a year before she could afford to buy her first computer. It was a luxury purchase, on a paltry salary of $125 a month, but she just had to have it.
"I was so happy to finally get a computer, even though my mother told me it wasn't worth spending the money," she said. "Now I can surf the Internet at home and keep in touch with people by e-mail. It's great."
While computers have been a common sight in Chinese households for more than a decade, the cost of owning one is still well beyond the means of most. Many are forced to rely on antiquated terminals at government-owned cyber cafés and libraries, which are constantly monitored for "illegal" surfing.
"Some of my friends still can't afford to buy one, even though their families help," she said. "The cost is just too much for laobairen (ordinary people)."
The average cost of a PC in China is around $750, which is roughly the equivalent to six months of pay for a service industry worker.
Still, analysts say that within several years the world's most-populous nation might also become the world's largest PC market. As the living standards in China rise after the country's entry into the World Trade Organization -- goes the running assumption -- so will the number of high-technology consumers.
According to International Data Corp., a global market research firm, in the past three years China has grown into the world's third largest PC market, accounting for nearly 7 percent, or 4.3 million, of all worldwide shipments in the first half of this year.
China accounts for 43 percent of the overall PC market in the Asia-Pacific region, IDC said.
"China is expected to remain the world's most dominant personal computer market for years to come," said Robert Deng, an American computer systems analyst based in Shanghai. "It's the world's last big high-technology market."
Deng said future PC market growth will be largely dependant on increases in wages and standards of living in China. He said the overall development of the market will come in stages of growth, with occasional sales slowdowns.
Recent figures indicate that the worldwide slowdown in PC sales has affected China, which has so far been resistant to the slowing global economy.
A study released last week by IDC found that shipments to China increased 12.9 percent in the third quarter of this year to 2.27 million units -- far below an earlier forecast of 19 percent year-on-year growth to 2.4 million units.
In the first quarter of 2001, by comparison, PC shipments in China grew by 49 percent compared with the same period a year earlier.
"China has thus far been the poster child for the personal computer market, and a moderation in growth such as this does not bode well for the industry," Ashok Kumar, a PC market analyst working for IDC, wrote in the report.
Kumar attributed the slowdown to China's lower-than-expected third-quarter figures, but said demand from the commercial sector still remained strong.
Kitty Fok, associate director for personal systems research at IDC Asia-Pacific, said market growth in China has been relatively confined to the eastern coast of mega-cites -- where dense populations and higher wages make it a hotspot for information technology products and services.
China's PC market is a myriad of dominant regions and sub-regions all with diverse consumer patterns and different circumstances, she said.
"Foreign PC vendors need to understand the vast diversity that exists in the PC market in China," she said. "They will need to develop more sophisticated strategies in order to succeed in the country's burgeoning market."
In the poor western regions of China, which covers 10 provinces and the largest land area, PC market penetration is the lowest in the country.
But the huge potential of China's market, which has grown at incredible rates in recent years, has been enough to attract major computer makers such as Dell Computer, which has experienced robust growth in China.
In the third quarter, Dell grew faster than China's Legend computer, even though Legend remained firmly in the top position with 660,000 units.
Compaq, Samsung and IBM all have grand designs on the Chinese market, despite a reported slowdown in sales in the third quarter of this year.
During a high-profile international business conference in Shanghai two week ago, Microsoft Chief Executive Officer Bill Gates told reporters that his U.S.-based software company is negotiating with several Chinese companies about developing pocket and tablet-sized computers for the domestic market.
Hewlett-Packard has announced plans to open a software development center in Shanghai in November, which will create 1,500 jobs.
"There is a goldmine of opportunity in China's PC market," Deng said. "But companies need to be flexible in their strategies, as the sub-regional market doesn't always fit into a generic sales plan."
