AMI-Partners Study Shows That Price-Sensitive SMBs in China Will Drive Demand for Low-Priced PC Models; Lenovo Likely to Capture This Group of Customers with Their Strength in Delivering Value at Competitive Prices.SINGAPORE -- Poised to become one of the world's economic powers, China's enormous market is a prime target for global businesses. There are a total of 8.34 million small and medium businesses (SMBs) in China, of which 99% are small businesses (SBs) with 1 to 99 employees. The remaining businesses are medium businesses (MBs) with a headcount of 100 to 999 employees. The PC market offers substantial opportunities for PC vendors as over 60% of SBs are still not using PCs in their daily business operations Business operations are those activities involved in the running of a business for the purpose of producing value for the stakeholders. Compare business processes. The outcome of business operations is the harvesting of value from assets . 72% of these SBs have indicated plans to purchase an average of 1.3 units of PCs in the next 12 months. Planned shipments over the next year are anticipated to approach five million units. The above findings were released today by New York-based Access Markets International (AMI) Partners, Inc, a leading consulting firm Noun 1. consulting firm - a firm of experts providing professional advice to an organization for a fee consulting company business firm, firm, house - the members of a business organization that owns or operates one or more establishments; "he worked for a that specializes in IT, Internet, telecommunications and business services market intelligence -- with a strong focus on global small and medium business (SMB (1) (Small to Medium-sized Business) Also called "SME" (small to medium-sized enterprise), it refers to companies that are larger than the small office/home office (SOHO), but not huge. ) enterprises. AMI-Partners conducts the industry's most comprehensive annual tracking surveys of SMBs in more than 20 countries, including North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. (the U.S. and Canada); Europe (the U.K., France, Germany, Czech Republic Czech Republic, Czech Česká Republika (2005 est. pop. 10,241,000), republic, 29,677 sq mi (78,864 sq km), central Europe. It is bordered by Slovakia on the east, Austria on the south, Germany on the west, and Poland on the north. , Poland and Russia); Asia-Pacific (Australia, China, Hong Kong Hong Kong (hŏng kŏng), Mandarin Xianggang, special administrative region of China, formerly a British crown colony (2005 est. pop. 6,899,000), land area 422 sq mi (1,092 sq km), adjacent to Guangdong prov. , India, Indonesia, Japan, Korea, Malaysia, New Zealand New Zealand (zē`lənd), island country (2005 est. pop. 4,035,000), 104,454 sq mi (270,534 sq km), in the S Pacific Ocean, over 1,000 mi (1,600 km) SE of Australia. The capital is Wellington; the largest city and leading port is Auckland. , Philippines, Singapore, Taiwan, Thailand and Vietnam); and Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. (Mexico and Brazil). Price Consciousness of China SMBs Ms. Diana Ng, Research Analyst from AMI-Partners' Singapore office cautioned that despite the enormous PC appetite of China SMBs, PC vendors need to understand that pricing plays a key role. "Before PC vendors can smile their way to the banks, they need to know that this target group are careful with IT spending. These SMBs tend to shop around for the most competitive price before making any IT purchase decisions." Among the small and medium businesses, AMI finds home-grown brands like Lenovo dominating both the desktop and portable PC space in China as they are able to provide products with world-class technology at competitive price points. In AMI-Partners' survey, China's non-PC SBs have also indicated Lenovo as their preferred brand when it comes to their PC purchase plans. "Lenovo is likely to remain as the market leader in the next 12 months. Coupled with the acquisition of IBM's PC business, the strengths from each company will result in strong and innovative product offerings at affordable price levels," said Ms. Ng. PC players like Founder, Tongfang, TCL See Tcl/Tk. Tcl - Tool Command Language and Acer managed to capture only small pieces of the market. Among foreign brands, Dell has the second highest market penetration Noun 1. market penetration - the extent to which a product is recognized and bought by customers in a particular market penetration - the act of entering into or through something; "the penetration of upper management by women" in both desktops (9%) and portable PCs (22%) among SMBs. "Given that Dell has manufacturing centers in China, they have now started to enjoy some level of cost advantages as compared to other foreign PC players," noted Ms. Ng. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. AMI-Partners' latest findings, only 4% and 5% of China's SMBs uses HP desktop and portable PCs, respectively. Loyalty Towards Current IT Brand Another reason that Lenovo may continue to lead the market is the brand loyalty of China SMBs. More than a third (35%) of SMBs highlighted that they will continue to purchase IT brands that they currently use. "This trait proves to be another obstacle for PC players who not only have to contend with pricing with other brands but also to formulate strategies and programs to convince and convert loyal customers to do a brand switch," added Ms. Ng. These PC players may have to make a decision on which is a more viable business option: pursue the non-PC SBs or to capture a bigger share of the PC market from amongst the PC-owning SMBs. Other Areas For Potential Growth With globalization globalization Process by which the experience of everyday life, marked by the diffusion of commodities and ideas, is becoming standardized around the world. Factors that have contributed to globalization include increasingly sophisticated communications and transportation , work takes place at any time and at any location for anyone. Thus, mobility needs of SMBs are heightened. Nearly every 1 out of 10 SMBs have indicated plans to purchase a portable PC within the next 12 months with the highest interest expressed for IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) ThinkPad. Again, this bodes well for Lenovo who will continue to market these portable PCs under the IBM ThinkPad brand name. About AMI-Partners AMI-Partners specializes in IT, Internet, telecommunications and business services strategy, venture capital and actionable market intelligence -- focusing on global small and medium business (SMB) enterprises. The AMI-Partners mission is to empower its clients for success with the highest quality data, business planning and "go-to-market" solutions. AMI was founded in 1996 under the name of Access Media International (USA), Inc. by Andy Bose, a former group vice president at IDC. Since its inception, the firm has built a world-class management team, each with ten to fifteen years' experience in IT, telecom, online communications and multimedia. AMI-Partners has helped shape the go-to-market SMB strategies of more than 150 leading IT, Internet, telecommunications and business services companies over the last nine years. The firm is well known for its IT and Internet adoption-based segmentation of the SMB markets See SMB. ; its annual retainership services based on global SMB tracking surveys; and its proprietary database of several thousand SMBs in the U.S., Europe, Asia-Pacific and Latin America. The firm invests significantly in collecting survey-based information from several thousand SMBs annually, and is considered the premier source for global SMB trends and analysis. For more information on AMI-Partners or our global SMB studies, please email ask_ami@ami-partners.com, visit www.ami-partners.com or call 212-944-5100. |
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