For the IT industry in China the first quarter of this year was not good. If you have a 50% fall in revenue increase life is not all sunshine and smiles. This happened, said a senior official, because of tighter macroeconomic measures and worse-than-expected showing by homegrown firms.
Wang Bingke, deputy director general of Bureau of Economy System Reform & Economy Operation at the Ministry of Information Industry, the IT regulator, said in Shanghai that China’s IT revenue was RMB909.3 billion ($118.09 billion) in the first three months,. This was 16% growth year on year. Not bad, you might think. Except it was budgeted to be 30%.
Wang Bingke said during a media briefing, ‘The slow pace of fixed-asset investment and homegrown firms’ decreased market share are the major reasons for the fall.’ IT fixed-investment dropped 4% in the second half last year against the first half, which resulted in the slow growth in the first quarter.
According to Analysys International, a Beijing-based IT consulting firm, in the fourth quarter, sales in the domestic handset market amounted to 23.34 million units, and the combined share of the Chinese firms was only 26%.
Wang Bingke said, ‘More than 20 Chinese firms stopped phone manufacturing in the first quarter due to fierce competition.’ He also mentioned multinationals control more than 70% of the revenue in the industry.
It is also suggested that the rapid drop in prices of LCD (liquid crystal display) TVs, laptops and mobile phones also pushed the revenue down.
Source: Shanghai Daily
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