India's PC sales to touch 4 million in 2005

By siliconindia staff writer   |   Wednesday, 22 December 2004, 08:00 Hrs
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MAIT, the apex body representing the hardware, training and R&D services sectors of the IT industry in the country, today announced the findings of its Industry Performance Review for the First-half of the Financial year 2004-05. The Desktop PC market grossed 17.1 lakh (1.17 million) units registering a growth of 37% over the same period, last fiscal. The buoyant IT consumption witnessed in the second-half of 2003-04 continued in the first-half of 2004-05, resulting in significant market growth. With sound macroeconomic condition and buoyant buying sentiment in the market, PC sales are expected to touch 40 lakh (4 million) units in Fiscal 2004-05.

The high growth in PC sales can be attributed, on one hand, to increased consumption by Industry verticals such as Telecom, Banking & Financial Services, Manufacturing, Retail and BPO/IT-enabled services as well as major e-Governance initiatives of the Central and State Governments. On the other, the highly price sensitive Indian market has responded positively to the drop in prices, especially at the entry-level. The Excise duty reduction on PCs from 16% to 8%; reduction in peak customs duty from 15% to 10%; and the removal of 4% SAD (Special Additional Duty) in early-January 2004 resulted in price drops ranging from 8% to 12%. This carried forward the buying momentum resulting in a high 8.9 lakh (0.89 million) units in sale in the Q1 (AMJ) of 2004-05. However, the disruption in business for close to 3 weeks post Budget 2004-05 and the subsequent Truckers strike, adversely impacted the sales resulting in 8.24 lakh (0.82 million) units in PC consumption for Q2 (JAS) 2004-05. The southward trend in pricing continued during the year due to technological reasons. Significant consumption in the small and medium enterprises and in the home market added to the industry numbers. Further, the trend of increased PC purchase in smaller towns and cities, witnessed in previous Quarters, continued undiminished.

MAIT’s Industry Performance Review - ITOPs, conducted by the leading market research firm IMRB (Indian Market Research Bureau), is bi-annual and aims to address the hardware sector’s efforts to manage the business environment, gauge the market potential and consumer trends. Apart from the half-yearly review, a module has also been introduced to monitor the Industry performance every Quarter, alternating with the half-yearly review, using the supply side estimation model. This round of the study involved face-to-face interviews with over 24,600 respondents selected randomly from 22 cities in India. The MAIT-IMRB study was initiated in 1996-97 and leading IT vendors subscribe to it. The study encompasses five broad product segments - computers, networking products, printers, other peripherals and Internet.

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