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Sales of personal computers in China grew steadily in 2006, prompting the outbreak of a price war, according to CCID (China Center for Information Industry Development) Consulting, a market research company under the Ministry of Information Industry.

Last year 23.37 million desktop PCs, laptops and servers were sold nationwide, up 17.5 percent on the previous year. But owing to price cuts, their sales value, which stood at 130.4 billion yuan (US$16.7 billion), only rose by 7.7 percent.

"Since price-cutting is the main method of competition in the desktop PC business, enterprises failed to make more profits," CCID Consulting CEO Li Jun told Xinhua on Wednesday.

The price war was even fiercer in the laptop market. Some major brands sold for lower than 5,000 yuan (US$641) per unit, Li said.

Large price reductions caused many buyers to favour notebooks to desktop PCs, particularly in cities and on campus.

Li predicted that demand from smaller enterprises, families and rural areas would continue to drive China's PC market over the next few years.

According to CCID Consulting, the market's sales value will reach 220 billion yuan (US$28.2 billion) in 2011.

(Xinhua News Agency January 25, 2007)