In the recent discussion of the Pirate WinXP software avaiable i nChina
the Cost of Computersa there came up. My contention was that the Typical
Citizen there could not even afford a Cpomputer so what good would $5.00
be. The Contention was that Computers in China were much Cheaper So the
$5 was in relation to the cost of the computer. Wel here is the "Real
Story".
And an Insight into the Company that bought the IBM PC Business.

*****

HP rolls out ultra-low priced PC in China
Friday, December 10, 2004 Posted: 9:58 AM EST (1458 GMT) 

HONG KONG, China (Reuters) -- Hewlett-Packard Co., the world's
number-two PC maker, said on Friday it has launched a 3,999 yuan ($483)
computer in China, turning up the heat in the intensely competitive
market.

The price matches that for a similar bare-bones model rolled out earlier
this year by the country's biggest seller Lenovo Group Ltd., as players
introduce cheaper models targeting smaller cities and the countryside
where most of China's 1.3 billion people live.

The news comes days after Lenovo said it was buying IBM's PC-making
assets for $1.25 billion to help it expand beyond the competitive
domestic market.

DBS Vickers analyst Joseph Ho said he was not surprised by HP's latest
China move.

"The market remains very difficult for Lenovo," he said.
"Their backyard
is on fire. ... The China market remains very very competitive."

HP's new model, part of its Pavilion series, features a central
processing unit (CPU) from Advanced Micro Devices Inc. and a FreeDOS
operating system, both cheaper alternatives to more popular CPUs from
Intel and the Windows operating system from Microsoft.

It recently went on sale, a spokesman said.

China recently passed Japan to become the world's second biggest PC
market, with 13 million units sold last year and the number expected to
grow 20 percent in 2004, according to International Data Corp.

But with many of the wealthiest big city residents already owning PCs at
home, vendors are having to turn to less affluent areas to look for
growth in the consumer segment.

In announcing its interim results last month, Lenovo characterized
China's PC market as one with "a crisis lurking in every corner."

Lenovo already controls more than a quarter of all sales and is unlikely
to see that amount grow as it faces new threats from the likes
international powerhouses HP and Dell Inc.

Lenovo accounted for 26.4 percent of China's unit PC sales in the third
quarter, followed by domestic players Founder Group at 10.3 percent and
Tongfang at 8.7 percent, according to Gartner. Dell was fourth with 8.1
percent, followed by IBM at 6 percent and HP at 5.2 percent.



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