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Our Bureau

New Delhi, Dec. 15

THE PC market in India is set to witness a massive growth, according to a Forrester report that predicts the number of PC users in the country to top 80 million by 2010.

"The number of PC users in India will top 80 million. PC adoption in India will grow at a CAGR of 37 per cent through 2010, adding 74 million new PC users," said a recent report by Forrester titled `Sizing the emerging-nation PC market'.

It added that despite gaining prominence as an outsourcing hub, India still has one of the lowest rates of PC ownership in the world - about 0.6 per cent of its 1.1 billion citizens.

"Seventy-two per cent of India's citizens are rural dwellers, the adult literacy rate is less than 60 per cent and personal income is in the bottom third of the countries we studied," it said.

"Another contributing factor is the 20-45 per cent tariff on PC purchases in India, a consumer cost that will push many PC buyers towards the grey market vendors."

The report predicted that the number of PCs in use worldwide would reach almost 1.3 billion by the end of the decade, up from about 575 million today.

"With only about 150 million new PC users coming from mature PC markets in Europe, the US, and Asia, the rest will come from emerging markets like China, Russia, and India."

Forrester's forecast of the PC market in emerging nations is based on a macroeconomic analysis of 16 emerging markets representing 62 per cent of the world's population.

"Our model forecasts that 566 million new PCs will be in use in these countries by the end of 2010. But today's products from western PC vendors won't dominate in those markets in the long term," it said.

"Instead, local PC makers like Lenovo in China and Aquarius in Russia that can better tailor the PC form factor, price points and applications to their local market, will ultimately win the marketshare battle."

Classifying the PC adoption in emerging markets in three waves, it said that the western PC makers would struggle in the emerging nation mass market that appears in waves two and three - middle-class literates and rural mass market. The first wave comprises wealthy urbanites.

According to Forrester, the early adopters will be wealthy, educated urbanites with the need, means, and motivation to buy PC technology from western manufacturers like Dell, HP, and IBM.

After initially buying entry-level PC configurations, these users will demand more power from their next PC and pay a higher price point as a result.

The second wave includes middle-class literates. As the PC market grows, higher price points won't sit well with the second wave of buyers - literate middle-class consumers stepping into the market for the first time.

"These buyers, who represent the sweet spot market in terms of PC unit volume sales, will have less discretionary income to spend and won't necessarily latch onto to established western brands."

The third wave would be that of rural mass market and will represent a challenge for the PC industry.

In this case, the potential users have limited means, need, and motivation and often lack the basic infrastructure to support a PC, such as communications and reliable source of power. "The PC industry will need to go back to the drawing board to develop products for this market," the report said.

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