PC Will Still Dominate Chinese Family Market

In 2012, PC suffers the first decline since 2001; however PC will still occupy the dominate position in Chinese families, playing a role of the home media center; in addition, network drive TV and set-top boxes are also striving to become the key transmission equipment for entertainment content.

According market research firm IHS iSuppli, PC can provide not only Internet access, but also video viewing capabilities, so PC will continue to act as the media center in most Chinese families, but the built-in Internet TV connectivity will become its main rival, and try to win the status of the PC in the next few years.

A research about China’s consumer electronics market, the majority of users and families tend to adopt PC or TV as the tools providing media content such as video and achieving broadband connection, rather than high-definition set-top box or Internet TV set-top box.

Based on shipments situation, PC and TV still show attractiveness, whose shipments growth rate in the next few years will be faster than set-box. In 2016, PC shipments which enter the Chinese domestic channels will increase to 115.7 million units from 73.9 million of last year, with a five-year compound annual growth rate of 9.4%. Meanwhile, the shipments of Chinese LCD TV in 2016 will rise to 54.7 million units from 42.2 million units in 2011, with compound annual growth rate at 5.3%. However, among LCD TV, network drives TV will increase its market shares, and the shipments will from 11.8 million units grow to 52.5 million units, showing TV industry will win new customers through broadband access capability which is comparable to PC.

On the means of enjoying digital content side, Chinese consumers now have more choice, many equipments is competing for the position of the home media center. Consumers’ choice results have a significant impact on the selected device, and meanwhile also may mean consumers will not consider other kinds of devices. Chinese family generally is not affordable to buy other devices to be the second media center.

At present, PC seems to expect to be the major source of evening entertainment in China’s families: it can be used to play games, read, watch videos, listen to music, communicate and send and receive e-mail, as well as go shopping. Young consumers usually spend more time on PC, and those relatively old consumers, in watching TV. For population from 21 to 30 years old, there one six having no TV, mainly because they are single and live in rental houses. As for another one six, they do not watch TV even having TV, preferring to sitting in front of the computer.

Aiming at this situation, TV manufacturers actively increase Internet connectivity in the new TV, apparently to attract relative young consumers. The retail price continuously decline, but the TV size becomes increasingly bigger. Large TV size is the a major factors influencing current PC users, because it can provide a better overall viewing experience, even the largest PC display can not resist this kind of advantage. In order to further considerate their own position, TV makers is also operating with Internet service providers, designing hybrid products which can access to the Internet via Wi-Fi module, and displaying TV listings through set-boxes, which is exactly the same as the functionality of all-in-one PC.

Set-top box Performs Sluggish, promoting PC dominating Chinese household entertainment.

HD set-top boxes and network drives TV also want to become the key equipment delivering entertainment content to Chinese families. But there are many obstacles facing these two kinds of devices, making them difficult to widely access family.

Although Chinese cable operators are eager to enable HD STB to be the home entertainment center, but have poor service quality. Cable Internet access lacks a unified standard which stumps consumers. Each carrier has its own specially customized front-end terminal equipment, making consumers have to pay a higher price for each upgrade. China TV operators also use traditional wired subsidies provided by the Government to increase profits, so they do not have to invest resources to improve their business and provide better service to the consumers.

Other problems including the existence of many small operators, they have poor financial strength and lack the ability to improve the network equipment. . A general lack of programs is also a big problem. There are only 15 high-definition channels, and which is almost similar. In the next few years, China’s domestic high-definition set-top box market is expected to show mild growth, and the shipments in 2016 will increase to 79 million units in 2016 from 38 million units in 2011.

The fourth optional equipment is network TV set-top boxes (IPTV STB), providing their own set-top box to the broadband Internet users in China, enabling them to watching a TV program on the PC. But this equipment is also disturbed by quality problem. Broadband users seem not throw interest to IPTB STB. For instance, young people watch TV less, so the TV function of this set-box means less to them, while the older people complain the too bad service quality of the network TV, preferring to see cable TV and watch through high-definition set-top box. Chinese domestic IPTV STB in 2016 will shipped 9.6 million units where the shipments in 2011 were 5.4 million units.

For Chinese manufacturers, they will encounter huge challenge in the field of consumer home media earnings. Chinese market is changeable, and has many other problems, such as production cost increasingly rise; in order to cater to users, manufacturers drop into price war, as well as the lack of core technology.

In particularly, the lack of core technology, terminal device manufacturers have to cooperate with content suppliers and carriers, providing products and services portfolio to meet the needs of Chinese users.

In order to defeat rivals, brand owners must possess the core competitiveness which is difficult to replicate and create for their competitors.

Overall, there is huge potential in the field of Chinese home entertainment, especially for the market of young people; PC manufacturers will compete with LCD TV manufacturers and ser-box to seize this part of market shares. Therefore, next year may see PC situation improvement.