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To: John Koligman who wrote (170511)	8/2/2002 5:17:02 PM
From: calgal	Respond to of 176387

China Surpassing Japan in PCs, Internet Use Fri Aug 2, 1:30 PM ET Jay Lyman, www.NewsFactor.com The world's most populous nation, China, appears to be passing Japan and taking a position second only to the United States in Internet use and in the PC market, according to industry sources. • Report: Global PDA Sales Grew 18 Percent in 2001 • Report: Asia Set for Fast CRM Spending Growth • One Year Ago: Report: Asian E-Commerce Emerging Slowly With well over one billion people and a society that is rapidly transitioning to high-tech, it is no surprise that China is moving up in the world of technology. But there is some surprise at how soon the nation is passing its technologically advanced neighbors in the Asia-Pacific region, including Japan. "The Japanese market is still mired in the recession of the last few years," IDC analyst Alan Promisel told NewsFactor. "It has been going down quarter after quarter. China, on the other hand, is growing quickly, especially because of deregulation and because communism is slowly loosening its iron grip -- commercially, if not politically. As a result, markets in China present major business opportunities. Dell ( Nasdaq: DELL - news), for example, is making strong gains there. PC Player Loren Loyerde, IDC's director of worldwide PC tracking, told NewsFactor that China will likely overtake Japan in the PC market in 2003 or 2004. "China's a big market and it's growing pretty fast," Loverde said. "Japan is also large, but it has been stagnating." China's growing technological significance was highlighted this week when an Intel ( Nasdaq: INTC - news) vice president said the company sees the Chinese PC market overtaking Japan's this year. Loverde said that Intel might be ahead of IDC's projections because it is looking at chip supply, rather than actual PCs. Chip Market Change Mario Morales, IDC vice president of semiconductors, told NewsFactor that China is already the largest market for mobile phone chips, and is expected to overtake Japan overall in chips by 2004, putting China in second place worldwide behind the U.S. Morales said that since mobile phone and PC chips represent nearly half the semiconductor market, China's importance will only increase. "It's definitely something we see continuing," Morales said. Made in China Morales said that with a population of 1.5 billion people, China has a potential consumer base for PC and other high-tech device purchases of between 300 to 400 million. "That's still twice the size of the U.S. market," Morales said. The analyst also said that as China becomes a larger producer of PCs and other devices, the country will become a hot spot for silicon, drawing other nearby countries into the market. "There's going to be a very strong concentration of production in China," Morales said. Widening Web Use While many indications point to China's growing presence in the semiconductor and PC markets, the Asian nation is also becoming a significant player in Internet use, according to a recent report from traffic analyzer WebSideStory. The company said that as of July, China had displaced Japan as having the second-largest population of Web users, after the United States. Geoff Johnston, WebSideStory vice president of product marketing, told NewsFactor that China's movement might be partly because of a leveling off in other countries, such as the U.S. and Japan. He added that China might now be poised to grow into the top spot in terms of Internet use. "With a billion-plus people, it's just a matter of time," Johnston said. "We might get to a point where the online population reflects the world population, and China could overtake the U.S." story.news.yahoo.com