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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Mike M2 who wrote (48650)	2/24/1999 2:32:00 PM
From: BGR	Read Replies (1) \| Respond to of 132070

Mike/William, I think that you are focussing on the wrong metric. In countries with tremendous income disparities like India it is way more important to focus on specific consumer segments and not per capita income. Remember, India has a billion people and about 25% of them are stinking rich by Indian standards and middle class by US standards. -BGR.

To: Mike M2 who wrote (48650)	2/24/1999 3:45:00 PM
From: RealMuLan	Read Replies (3) \| Respond to of 132070

Mike: <<the notion of China and India developing buying power like the US middleclass has one major problem -the per capita income is not there .>> Per capita income you are talking about is not in real term. If considering PPP per capita income (Purchasing-power Parity, based on World Bank ratios), China's per capita income is >$3,600 US dollars (source: pathfinder.com. Although it is not significant by Western standard, but you will have to consider the wage structure as well. For 99% of Chinese people, individual income tax is never heard of. And majority of city people only pay 5-6% of their income for their apartments. And here in the US, one-third of income goes to tax, and one third goes to housing. So only one-third left for food and other expenses. So if you talk about disposible income, there is a huge difference bet. the two countries. And I think, DISPOSIBLE income is what really counts in terms of the spending on electronics and computers. And one more thing, Chinese culture values education tremedously throughout its history. And computer can helps a lot for the education. That is why a lot of relatively poor Chinese in cities would rather eat cheaper food, and save money for a computer. My sister told me that there are only 3 students in her son's (3rd grad in elementary school)class (class size in China is around 40-50 students) whose family do not have computers. I was so surprised by that. Because when I was in China last time in 1993, personal computer was rarely seen in the individual home. I would say in China big cities, computer is now really hot. And according to IDC (http://www.idc.com/idc7/Press/default.htm), in the year of 1998, computer units sold in PRC alone were 3,034,000. In the US, there are roughly 100 million household (I might be wrong), and consider 50% of them have computers. Of course some of them got 2 or 3. So the total will be >50 million. And China sold >3 million in one year. I know this is some very rough statistics, and may not even comparable, but my point here is the size of the Chinese computer market should not be ignore. The relatively low per capita income is not a major factor in this case. After said that, I want to make myself clear that majority of Chinese will not buy Dell, or even much CPQ, because computers like Legend, Acer etc. are much cheaper. 30-40% cheaper in most cases. That is why foreigner are losing market share, and domestics manufactures are really gaining.