Enterprises in Greater China must soon start replacing their ageing personal computers or face reduced productivity, higher operating costs and greater network security risks. This call was made by Tom Burns, Asia-Pacific director at Intel's Internet solutions group, as he urged companies to pursue PC upgrades - especially for wireless notebooks - even with the lingering economic slowdown. 'After more than two years of cost-savings, companies must now make the decision to strengthen their information technology [IT] infrastructure,' he said. 'It is time for them to take advantage of new technologies and gain competitive advantage.' Citing recent industry estimates, Mr Burns said PC replacements were overdue in a large number of companies. He pointed out that the economic downturn has led these firms to postpone their PC upgrades. A study by Siemens Business Systems found that companies had an average three-year lifecycle for their PCs and that these devices should all be replaced by the fourth year. Mr Burns said a device in its third-year of use by an organisation becomes vulnerable to a number of hardware, software and support problems, including the typical end of standard warranty on parts, hard-disk drive failure, application errors and increased Internet security breaches. 'These are the things that keep CIOs [chief information officers] in large enterprises awake at night,' he said. The numbers do not lie, according to recent studies made by various IT market research firms. Gartner, for example, estimated that normal failure rates for notebook PCs during their three-year life span was about 20 per cent. Stretching their use another year would raise system breakdown rates to 50 per cent. The Meta Group noted that extending the PC lifecycle from three to four years costs an organisation about US$350 per user each year in maintenance and support expenses. Mr Burns said Intel estimated that staff PCs that are used for more than three years translates to organisations raising their system support costs by 25 per cent. One of the most compelling reasons for enterprises to update their PCs is the economic impact made by security threats on these old devices, he said. A Meta Group report in February found that more than half of the current installed PC base runs old operating systems, which raises concern on how businesses can protect their data from security breaches. 'This means that older PCs can limit the deployment of security tools as well as more productive business applications,' Mr Burns said. The economic restraints on corporate PC replacements have also hurt Intel, which has a 90 per cent global revenue share in the PC microprocessor market. 'Intel's [first-quarter] results reflect continued sluggishness in the PC market,' Gartner analyst Martin Reynolds said in a report last month. The semiconductor giant's revenues in the quarter to March this year reached US$6.75 billion, a drop from US$6.78 billion in the same quarter last year. Despite the tepid PC demand, Mr Reynolds credited Intel with remaining aggressive and keeping well-positioned for an anticipated market rebound by year-end. Gartner found that Intel's capital and research investments still hovered at about US$8 billion a year and that its Centrino mobile PC platform could serve to rejuvenate notebook PC sales, which provide vendors with better margins than desktop PCs. Mr Burns said Intel hoped that a revival of delayed corporate PC replacement programmes in Greater China would harness advanced notebook PCs based on Centrino technology. This platform combines a microprocessor, graphics and chipset support for wireless local area networks. Recently, Intel and a number of PC makers unveiled Centrino-based notebooks designed for use at a growing number of wireless Internet access 'hot spots' - including airports, shopping malls and coffee houses - based on the popular Wi-Fi (802.11b) standard. 'The growth area we see for PCs are organisations that support more mobile, more productive workforce,' Mr Burns said. He cited a Gartner report which found 'enterprises with less than 35 per cent of the workforce using notebooks may not be receiving full capacity from their workers'. Total mainland PC sales this year are expected to hit 10.1 million units, while Hong Kong demand would reach 602,140 units, according to Gartner estimates in January. Those figures were projected before the atypical pneumonia outbreak in the mainland and Hong Kong and may need adjustment.