Indian PC market shows signs of life
By siliconindia   |   Monday, 09 September 2002, 19:30 IST
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BANGALORE: The Indian PC market has showed signs of life in the April-May-June quarter. According to an IDC report, unit shipments in the three months totaled at 532,000 units, 2 percent higher than IDC’s initial forecast. The seasonal dip that is usually seen between April and June was not evident this year and the first quarter was lower than the previous quarter January-February-March 2002 by just 1 percent. On a year-on-year basis the market showed a 5 percent gain. Analysts say that upturn in the market was primarily because of healthy buying in the consumer market on account of school holidays. Furthermore, pent up demand was fulfilled this quarter after lower than average consumer sales experienced in the previous six months. The home market also showed signs of increased demand in the AMJ. PC sales stood at 184,996 units this quarter, a number which is much higher than 143,824 units in JFM. In the commercial space, increased buying in the small business segment, call centers and IT-enabled services facilitated a positive year-on-year growth of 7 percent. Hewlett Packard after its merger with Compaq emerged as the leader in the Indian PC market in April-June displacing HCL from the top spot. Local assemblers performed well in the consumer market this quarter, as they were able to provide a greater cost advantage and reach than multinational and large Indian branded competitors. The share of the local assemblers and small regional brands totaled at 69 percent in April-June 2002, up from 66 percent in the same quarter, the previous year. Aided by large deals in education and the large business segment, notebook computers grew by an impressive 30 percent from the previous quarter and by 19 percent on a year-on-year basis. Run rate business within this form factor also aided market growth. However, the above signs of growth are not adequate to indicate an overall recovery in the market. Conditions continue to be difficult for PC vendors in the marketplace. The lack of big deals in the commercial segment and postponement of buying decisions will have a negative impact on units sold. PC vendors have been looking at smaller towns to provide the necessary impetus to grow but recent drought conditions would impact income and spending in such towns. The June-September quarter is expected to see a growth rate (year-on-year) of 8 percent. The OND quarter is likely to be somewhat more positive with a growth rate of 15 percent. For the total year 2002 IDC forecasts a growth of 6.2 percent. A smart recovery is expected in 2003 and IDC forecasts a growth of 22.4 percent for the Indian PC market. This is in sync with expectations elsewhere in the world. IDC in its global forecasts believes that with gradual economic recovery translating into improved business profits, worldwide IT spending will see growth of 9 percent in 2003 to exceed $1 trillion for the first time in the industry’s history. This will translate into a larger total market size than at the height of the dot-com boom in 2000. Spending on hardware products will also see a recovery to a positive growth of 5 percent.

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