The spread of SARS (severe acute respiratory syndrome) in China, where it likely originated, has been worse than in any other nation, with more than 5000 cases and nearly 300 deaths.

Beijing, the hardest hit city, has seen its shopping and entertainment centers turn into ghost towns as the government ordered the closing of most public places.

Despite the apparent slowdown, Intel Corp. executives said recently that they haven't seen a discernable impact on chip sales from the SARS epidemic.

However, on Tuesday, the Taiwan-based Market Intelligence Center, which usually bases analysis on surveys of local firms, said consumer desktop PC demand dropped to 40 percent to 50 percent of original forecasts at popular PC markets. Demand in Beijing's PC markets plummeted as much as 85 percent, MIC said, while corporate sales were off by 10 percent to 15 percent.

China is Asia's largest PC market. Market researcher IDC expects China's PC sales to nearly double in a few years, from 11.3 million in 2002 to 21.1 million in 2006.

MIC suggested that summer purchases by students, distance education, and a growing number of home offices could lend a small measure of momentum to a recovery, which is already happening among national brands.

The research firm also expects fear of SARS will linger long enough to change buying habits, but the jury is still out on whether this will indeed happen. Nevertheless, MIC said such a trend would increase the importance of advertising, the Internet and telephone commerce and force PC makers to rethink their distribution and sales channels.

A cooling off period is also expected to settle in this quarter for China's cell phone sales. SARS, combined with the increasing popularity of PHS systems pushed by the two main wireline incumbents, will dampen overall sales, MIC said a different report released last week.