Computer giant HP thrives in China

Hewitt-Packard Co (HP), a US giant known for its home PCs and printers, said its computer business in China grew more than 40 per cent in its first fiscal quarter of 2006.

The company attributed the growth to a change in its distribution model and aggressive localization moves.

Adrian Koch, senior vice-president of HP's personal systems group in the Asia-Pacific region, said it was "a very strong quarter."

Sales of his unit exceeded US$1 billion for four consecutive quarters with a 13 per cent growth year-on-year, Koch said.

China and India were in the spotlight during HP's first fiscal quarter ended January 31, with shipments in China growing by about 44 per cent and almost 60 per cent in India more than the previous year.

China remained the biggest market for the company, which sells computers, workstations and handheld devices, contributing almost one-fourth of the region's business.

Hon-Cheng Chin, vice-president of personal systems group with HP China, said a change in HP's channel strategy enabled the information technology giant to penetrate into smaller cities and industries, where HP used to be weak.

Starting from the new fiscal year, HP China set up eight regional units, giving them opportunity to choose local partners. HP previously has relied on nationwide distributors.

While HP is ranked among the top three in the large enterprise market, along with Lenovo Group and Dell, it lagged behind domestic players in the education segment, where companies like Lenovo, Founder, and Tsinghua Tongfang led with their large distribution networks and connections with local customers.

The market intelligence firm International Data Corp said in its annual report on the Asia-Pacific computer market that China saw an unexpected growth in the fourth quarter, mainly due to the deployment of computers in two major national education projects during the period.

HP's recent strategy of "Made-in-China for China" has prompted the company to react to local demands.

Last year, the US giant developed three desktop computer models and two notebook models for the Chinese market. Some of the models will be introduced to the Indian market.

In its fiscal first quarter, the shipments of the two models both exceeded 10,000 units per month.

Source: China Daily