Mainland China shipped 11.4 million PCs in the second quarter, up 11% on a year earlier, according to Omdia. The growth came almost entirely from desktops, which jumped 42% to 4.3 million units. Notebooks slipped 2% to 7.1 million.
Don’t read it as a recovery. Omdia still expects China’s PC shipments to fall 6% for the full year to 39.7 million units, with consumer PCs down 10%.
The state is buying
The split tells the story. Commercial PC shipments grew 29% while consumer shipments fell 2%. The commercial surge is driven by Xinchuang, Beijing’s program to replace foreign IT in government and state-linked organizations with domestic hardware and software. Desktops for offices are exactly what that program buys.
The vendor table shows it:
- Lenovo led with 3.7 million units, 32% share, up 7%
- Huawei shipped 1.8 million, 16% share, up 82%
- iSoftStone shipped 1.4 million, 12% share, up 71%
- Apple shipped 1.2 million, 10% share, up 63%
- Asus shipped 0.8 million, 7% share, down 5%
Huawei and iSoftStone together took more than a quarter of the market, and both are riding government and enterprise demand for domestic machines. Apple’s 63% jump is the odd one out, a consumer bright spot in a weak consumer market.
Consumers are tapped out
Omdia senior analyst Emma Xu said consumer demand has weakened as the effect of government trade-in subsidies fades, while commercial demand keeps supporting growth. Some of the consumer shipments in the quarter were stockpiling ahead of expected price increases. That helps the quarter and hurts the next one.
Tablets are worse. Shipments fell 13% to 8.0 million, with Huawei down 18% and Apple down 10%. Lenovo was the exception, up 63%. Omdia expects tablets to fall 10% for the year to 32.5 million.
What to watch
Rising memory costs have been pushing PC prices higher this year, and that lands hardest on price-sensitive consumers. Xinchuang is a policy program with its own budget cycle, so it can hold up commercial demand for a while.
The Chinese PC market is splitting in two. The government half is growing. The consumer half isn’t.