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Computer sales moving slow: MAIT
By agencies
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Wednesday, 06 July 2005, 19:30 IST
NEW DELHI: Despite achieving the status of hardware destination for global giants, the domestic market is not too encouraging.
Falling short of the annual target of 4 million units, the computer sales in the country was estimated at 3.63 million units in 2004-05, compared to 3.03 million units sold in the previous year.
"The desktop market notched 3.63 million units in 2004-05 registering a growth of 20 percent over the last fiscal. The lower-than-expected performance in FY05 is owing to the lull in sales witnessed in the January-March quarter following confusion just before the Union Budget and the implementation of Value-Added Tax (VAT) regime.
Vinnie Mehta, Executive Director of MAIT, said, "Non-clarity over WTO's Information Technology Agreement also depressed sentiments.
According to MAIT, PC sales are expected to cross 4.25 million units in 2005-06, reflecting a growth of 17 percent. "Our growth estimate is conservative based on statistical indicators. However, the industry remains upbeat that the growth in 2005-06 would be in the region of 25-30 percent," he said predicting that in the next 4-5 years the sector would see a 25 percent CAGR on the back of broadband and local content proliferation.
The growth rate in the PC market is witnessing a declining trend. From a high of 37 percent in 2002-03, the growth rate slipped to 32 percent in 2003-04, 20 percent in 2004-05 and an estimated 17 percent in 2005-06.
According to the findings of MAIT's Industry performance review for 2004-05, the PC sales in top four cities grew by 8 percent accounting for 38 percent of the total market. Interestingly, the sales of PCs in smaller towns grew 34 percent, accounting for 51 percent of total market.
"The growth in personal computer sales can be credited to significant use by industry verticals as well as major e-governance initiatives by Centre and States. Also, the drop in prices of the PC at the entry level saw the emergence of a strong household market. Entry-level prices of PC have dropped to Rs 13,000-15,000 from Rs 20,000-Rs 25,000 last year, says Mehta.
The proportion of the assembled PCs - the smaller lesser known regional brands and unbranded systems - reduced from 53 per cent of the total PC sales in 2003-04 to 41 per cent in 2004-05, registering a decline in growth by 7 percent.
Aggressive pricing from the branded players cannibalized the market for the assembled PCs. Proportion of the Indian brands grew from 21 percent in 2003-04 to 24 percent, registering a growth of 37 percent, while that of MNC brands increased from 26 per cent to 35 per cent for the same period.
The number of active Internet entities increased to 2.92 million in March 2005, while the figure was 2.50 million in March 2004. The business segment witnessed a growth of 7 percent, accounting for 44 percent of the total active Internet entities while households with the annual growth of 26 per cent accounted for the remaining 56 percent.
The study also showed that the overall printer sales grew 12 percent in the fiscal year 2004-05. Notebooks witnessed highest growth amongst all product categories, with sales doubling to 0.17 million units in 2004-05.