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PC sales up 106% in non-metros

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CIOL Bureau
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NEW DELHI: MAIT has announced the findings of its Industry Performance Review

(ITOPs) for FY 2001-02. The indicative survey was carried out in alliance with

market research outfit, IMRB.






According to the report, the desktop PC market for the year 2001-02 has
registered a 11 per cent slump grossing 16.7 lakh units over the previous year.

PC sales had clocked a growth of 34 per cent in the FY 2000-01 over that of

1999-2000. The IT industry is expected to grow at 12 per cent in FY 2002-03,

with projected PC sales of 19 lakh units.






The most interesting find of the study is that 30 per cent of total PC sales was
accounted for by Class B and C class cities - a phenomenal growth of 106 per

cent, especially given the fact that the overall PC market has pegged a 11 per

cent negative growth. (In the last fiscal smaller towns had accounted for only

13 per cent of the overall PC sales). Likewise, notebook sales grew by 200 per

cent in small towns whereas sales to the four metros declined by 28 per cent.

Smaller towns accounted for 9 per cent of the total server sales, growing 4 per

cent.






IMRB, senior vice president and country manager, Bhupendra Mathur said that
because the base figures were abysmally low in the smaller cities to begin with,

the huge percentage rises however does not translate into as high unit sales.

Mathur added that this growth could be attributed to a focus shift on the part

of the marketing departments right from the manufacturer to the distributor

level, whereby sensing a lull in the bigger cities they explored the smaller

towns for potential market pockets. Another factor, according to Mathur, that

resulted in the growth of the PC market in the smaller cities was the

penetration of Internet, especially in the form of cyber cafes to the smaller

towns.






As per the MAIT-IMRB study, the assembled PCs – the smaller lesser known
regional brands and unbranded systems – accounted for 46 per cent of the PC

sales in 2001-02. The proportion of the assembled PC sales shrunk from 53 per

cent in the previous year - a negative growth of 22 per cent. However, the MNC

brands maintained a market share of 35 per cent, up from 27 per cent in 2000-01

despite registering a negative growth of 17 per cent. The Indian brands

accounted for 19 per cent of the market as contrasted to 17 per cent in 2000-01.






The study reveals that PC sales, both to the business segment and to the
households declined by 11 per cent as compared to the sales in the last year. In

the second half of 2001-02, the market recovered, but not sufficient to result

in positive growth. The business segment registered a growth of 7 per cent and

the households 12 per cent over the first half, thus taking the overall growth

to 8 per cent. In the FY 2001-02, the business segment continued to account for

78 per cent of the market. Within businesses, the larger businesses (over 50

employees) and the medium business segments (between 10 and 50 employees)

witnessed sales fall by 10 per cent and 18 per cent respectively. The sales in

the small sector (less than 10 employees) also declined by 18 per cent.






In terms of the processor configuration, PC sales in 2001-02 were dominated by
P-III 550 MHz, which accounted for 46 per cent of the market share, followed by

P4 accounting for another 24 per cent. In H2/2001-02, 28 per cent of PCs sold

were P4 in contrast to 19 per cent in H1. The households segment also witnessed

an increased consumption of P4 in H2/2001-02 amounting to 27 per cent of the

sales in the households. This reflects the increased need for faster processing

speeds for Internet and its applications. Sales of processors with lesser speeds

e.g. P-III (up to 450 MHz) and P-II based systems witnessed a fall in the market

share.






Printer sales, according to MAIT-IMRB estimates, grew marginally by 1 per cent
compared to that in 2000-01 - sales of Dot matrix grew by 6 per cent; sales of

Laser printers declined by 15 per cent while that of Inkjet printers remained

flat. Large establishments that accounted for 36 per cent of the Dot-matrix

sales registered a positive growth of 57 per cent. Medium sector accounted for

33 per cent consumption and grew 6 per cent, while small sector witnessed

negative growth of 17 per cent. Sales of Line Printers declined by 30 per cent

registering 3,885 units in sales down from 5,540 units in 2000-01. Dot-matrix

printers accounted for 41 per cent of the market share; Inkjet printers for 52

per cent and Laser printers for 7 per cent.






Server sales recorded a negative growth of 21 per cent in fiscal 2001-02, with
sales in the four metros declining 23 per cent and 21 per cent in the next 4. In

Inkjet printers also the same trend was witnessed. Sales to smaller towns

accounted for 41 per cent of the total sales, growing 91 per cent, while sales

to top 4 cities dropped by 33 per cent and in the next 4 by 23 per cent. Sales

of UPS to smaller towns also witnessed a significant growth of 23 per cent

although total UPS sales in FY 2001-02 declined by 6 per cent.






Releasing the findings of the study, MAIT executive director, Vinnie Mehta said
that the hardware industry, like any other has been hit by the global economic

situation and bearish market trends. However, he added that the future looked

optimistic. Commenting on the findings of the study, S Devarajan, president,

MAIT said, "To ensure IT reaches grass root levels in India, we need to

seriously contemplate developing products for the Indian market… the

government needs to facilitate and encourage this process by creating simple

mechanisms for quick access to low-cost finance for product development and

pilot production, with only the technology, materials, and components as

security, regardless of whether the product development is in the public or

private sector."






ITOPS is a syndicated end-user based study on the IT hardware market conducted
by the eTechnology Group of IMRB. This has been an annual exercise of MAIT since

1996-97 and for the last three years the study has been conducted on a bi-annual

basis, as well. The recent edition was based on over 14,000 face-to-face

interviews with end-users, with data projected to the 'all India urban market'.






The MAIT-IMRB study involves data collection after the 'last mile' that the
product travels, i.e. from the premise where the product is finally installed.

The study encompasses five broad product segments - computers, networking

products, printers, other peripherals and Internet.





















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