Will China's education reforms impact the PC industry?

In July 2021, the Chinese government announced its “Double Deduction” policy to ban all after-school training provided by for-profit “tuition centers” across the country. This disruptive move is just the beginning of a series of educational reforms aimed at equality of education from regional educational departments. While the ban will bring down a series of establishments that have been proliferating due to the cut-throat environment in China, it will result in an unintended boost for devices and software that facilitate out-of-school studies.

In 2018, the Chinese government, upgraded its digitalization in education guidelines to improve digital infrastructure and strive to improve the education efficacy, resources sharing and the equality of education resources by 2022. To benefit from this core strategy, a sizeable budget and a special fund were allocated to the local education departments and education institutions, covering K-12, vocational and higher education.

K12 students do not require strong performance from their devices, but appreciate longer battery life, eyesight protective screens and sufficient inbuilt software and study content. While the minimal requirements make tablets a good option for K12 students, they haven't attracted vendors' attention as hardware is only part of the packaged solutions. While working directly with the educational department and schools is an option, Canalys recommends vendors invest in local system integrators, who understand the local education system much better, and already have well established relationships with government and schools. The situation has benefited both Lenovo and Huawei, who built on their smartphone knowledge to tweak software and UI for education tablets, reflected by the strength they have shown in their respective tablet businesses.

The situation is different when it comes to vocational and higher education. China's vocational education is undergoing a thrilling overhaul, as the central government has begun to emphasize the skills required to support its dominant technology and manufacturing industries. “Future Vocational Colleges” proposed by the central government, are tackling the urgent demand for workforce in fields like AI, engineering, medical, semiconductors and blockchain etc.

While good telecommunication and internet infrastructure of the colleges and universities cements the basis for a deepening digitalization, the government is now focused on training and educating the educators who have come to highly rely on the hardware and software combined solutions for their remote teaching, with efficient sharing and exchanging of resources. Notebooks, desktops, workstations, and smart screens etc. with customized solutions will certainly play an underrated, yet important, role in the future of vocational and higher education.

Lenovo and Huawei dominate the educational tablet market in China. They highly value the domestic education market and invest tremendous resources to serve it. Lenovo also dominates the Chinese desktop and notebook market, with devices in various price segments. Smaller vendors like Xiaomi, Tongfang and Mechrevo are supporting a niche price-conscious consumer segment, thereby building on the need for value laptops in the education space. In the face of successive education reforms, how vendors actively improve their competitive position with innovative product portfolios, solutions, and go-to-market strategies, is the golden question.