The Hindu Business Line : PC sales cross 5 m units

Growth blog
Indian brands grew from 24 pc in 2004-05 to 28 pc.
MNCs remained constant at 35 per cent.
Consumption of PCs with alternative processors grew by 139 pc.

New Delhi , June 29

Fuelled by significant consumption in verticals such as telecom, banking, financial services, retail, as well as the e-governance initiatives, the personal computer market comprising desktops and notebooks jumped 32 per cent, clocking 5.04 million units during 2005-06, and the sales figure is expected to cross the six million mark in 2006-07.

The desktop sales crossed 4.6 million units, registering an annual growth of 27 per cent during 2005-06, although with sales projections for 2006-07 pegged at 5.6 million units, the growth rate this year is likely to be relatively lower at 21.7 per cent.

Star performer

During 2005-06, the notebook segment emerged as a star performer with shipments exceeding 0.43 million (4.3 lakh) units growing 144 per cent over 2004-05, according to the Industry Performance Review released by the hardware association Manufacturuers Association for Information Technology (MAIT).

"As the base for desktop continues to grow, attaining very high cumulative growth numbers gets to be a challenge," the MAIT Executive Director, Mr Vinnie Mehta, said at a conference here. While consumption in manufacturing, BPO and IT-enabled services alongwith the other verticals pitched in for PC sales during 2005-06, the drop in prices, especially at the entry level, contributed to a strong household market, Mr Mehta said.

Aggressive pricing

The proportion of smaller lesser known regional brands and unbranded systems reduced from 41 per cent of the total PC sales in 2004-05 to 37 per cent in 2005-06, although in absolute terms they registered a growth of 14 per cent.

Cannibalising the assembled PC market were the branded players who played the aggressive pricing card to attract consumers. Proportion of Indian brands grew from 24 per cent in 2004-05 to 28 per cent, a growth of 48 per cent. The market share of MNCs remained constant at 35 per cent, although in absolute terms, they posted an annual growth of 27 per cent.

The PC sales to the business segment improved by 12 per cent, accounting for 75 per cent of the total PC consumption. Households, with sales growth of 33 per cent, accounted for 25 per cent of the market. The top 4 metros accounted for 33 per cent of the total PCs purchased.

While the proportion of the sales to top 4 metros went down (against 38 per cent in 2004-05), the sales in absolute numbers increased by 10 per cent.

PC purchase in `next four cities' grew by 50 per cent and accounted for 13 per cent of the market. In other smaller towns, PC purchases increased by 35 per cent to account for 54 per cent of the total PCs purchased.

Processor configuration

Interestingly, while the PC sales in 2005-06 were dominated by P4, accounting for 80 per cent of the market share, alternative processors including AMD, Via and Cyrix hiked their market share to a whopping 17 per cent compared to a mere nine per cent during 2004-05. Consumption of PCs with alternative processors grew by 139 per cent in absolute terms.

In the households, alternative processors accounted for 26 per cent of the market, a clear indication of the high price sensitivities that exist in the home market.

Notebooks

Households accounted for 13 per cent of the market growing 151 per cent. Consumption of notebooks in the small sized enterprises grew by 248 per cent, accounting for 31 per cent of the sales to business segment.

Compared to the last fiscal, sales to large enterprises grew by 74 per cent accounting for 51 per cent of the total sales in the business segment. Medium sized businesses accounted for 22 per cent of the sales, registering a growth of 58 per cent.

Internet

The number of active Internet subscribers (entities) increased to 4.12 million in March 2006, while the figure was 3.12 million in March 2005.

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