BEIJING, May 30 /Xinhua-PRNewswire/ -- CCID Consulting, China's leading research, consulting and IT outsourcing service provider, and the first Chinese consulting firm listed in Hong Kong (Hong Kong Stock Exchange: HK08235), forecasts that dual core CPUs will be the popular norm in China after the summer vacation sales promotion.
CCID Consulting's latest Analysis Report on China's Computer Parts Market in 2007Q1 shows that in 2007Q1 overall CPU sales maintained a rather fast growth. Price drops turned users into active purchasers. Large numbers of product were released. Low- and middle-end products were still the mainstream consumption, while products with high price/performance ratio were in short supply. In particular, in March, as students returned to school after their vacations, the whole DIY market greeted its peak season, adding splendor to goods sales in Q1. CPU sales volume was up by 36%.
Price was still the focus of competition
"Dual core" became a household word in 2006. Every DIYer dreamt to have a dual core processor. To compete for this huge market, Intel and AMD waged intense price wars in early 2007. The two camps competed firmly in the dual core market. AMD carried the "high price/performance ratio" banner high. The price of its mainstream 65nm Athlon 64 dual core processor has now fallen to around 600 Yuan. There is still some room for further price cuts. As Intel has basically cleared off its single-core CPU storehouse, its entry-level dual core processor "Pentium D" series are bound to see price dives in an effort to compete for the low- and middle-end market. This will make the series more competitive in terms of price. The price of the "Core" series for the middle- and high-end market has also fallen below 1,000 Yuan, thus affordable to DIYers at large. Rising price/performance ratios will make the year 2007 a year of penetration for dual core CPUs.
Fig. CPU Sales in China's PC Parts Market in 2007Q1 -- by Brand
(Unit: 10,000 pieces)
http://www.ccidconsulting.com/upload/11538.jpg
Source: CCID Consulting, April 2007
AMD needs to make adjustments
After its glories in 2006, AMD failed to continue its outstanding performance on 2007Q1. Huge losses were reported in its financial statement for Q1. AMD managed to maintain its share of China's retail market, but at a very high price. To seize the first opportunity in competitions in 2007Q1, AMD took initiative to stage an offensive, but the effectiveness has been unsatisfactory. In 2007Q1, AMD lowered the average price of its desktop processors by as much as 50%. However, it failed to take more market shares. Excessive CPU price cuts reduced its profits.
In fact, to compete with Intel on all product lines, AMD had to adopt a low price strategy for all of its product lines. In the past, AMD's Althon64 and Intel's high-end product Pentium 4 and Pentium D were desktop processors at the same level. However, after Intel introduced its completely new high-end products Core 2 processor, AMD failed to catch up with Intel's technology update and had to cut prices as Intel lowered the price of its Pentium 4 and Pentium D. AMD has gained market by cutting prices. But, it also lost profits. As its market grows and profits fall, production capacity continues to become a growth bottleneck for AMD. As for brand PC cooperation, all front-line PC makers in China have joined the camp of collaborators with AMD. However, goods shortages have caused harm to the interests of AMD's channels in the retail market. In the market, AMD attended to one thing but lost another.
Intel saw its sales volume rising
Despite several price cut fight backs from AMD, Intel saw its operating revenues exceeding its expectations in 2007Q1, showing signs of a market leader. The result is that with sufficient profits, Intel has enough funds to work on market promotion and sufficient production capacity to support dealers and OEMs. It also has enough finds for R&D. Of course, it also has enough profits to support price wars. Greeting the spring breeze of 2007, Intel made a good start.
For some time to come, price wars resulting from CPU technology upgrading will continue to be the main melody in the CPU market.
About CCID Consulting
CCID Consulting Co., Ltd. (also known as CCID Consulting), the first Chinese consulting firm listed in the Growth Enterprise Market of the Stock Exchange (GEM) of Hong Kong (stock code: HK08235), is a direct affiliate of the China Center for Information Industry Development (hereinafter known as CCID Group). Headquartered in Beijing, CCID Consulting has so far set up branch offices in Shanghai, Guangzhou, Shenzhen and Harbin, with over 300 professional consultants and industry experts. The Company's business scope has covered over 200 large- and medium-sized cities in China. Apart from home market development, CCID Consulting is establishing international cooperation links across the United States, the Asia-Pacific region and Europe, by setting up agents in the U.S., Japan, South Korea, Australia, Singapore, Italy and Russia, with the aim of going global.
Based on four major competitive areas of the powerful data channels, industrial resources, intense knowledge and deep understanding of information technology, CCID Consulting provides customers with consulting, research and IT outsourcing services covering strategy planning, IT application, marketing strategy, human resources and information technology outsourcing. Our customers range from industrial users in IT, telecommunications, energy, finance, automobile, to government departments at all levels and diversified industrial parks.
CCID Consulting is committed to becoming the No. 1 brand for strategy consulting, the No. 1 consultant for enterprise management and the No. 1 expert in market research. For more information, please visit our website at http://en.ccidconsulting.com .
For more information, please contact:
Cynthia Liu
Coordinating Manager
CCID Consulting Co., Ltd.
Tel: +86-10-8855-9080
Email: liuyan@ccidconsulting.com
