Peripherals: Making its mark

There was a time when the joke was that whenever the PC

industry sneezes, the peripherals industry catches a cold. But last year's performance

tells a different story. For, while the PC industry saw a growth of 32% over the previous

year, translating to a sales figure of eight lakh PCs in the country, the peripherals

industry grew by a whopping 74%. Each product category grew in size and stature and what

was predominantly a printer market with monitors, keyboards, hard disk drives and CD ROM

drives finding a mention as 'others,' has got a distinct identity and impressive growth

outdoing the printer industry performance which grew by 24%.

An interesting trend witnessed last year was the

significant growth, in unit terms, in the monitor and keyboard markets. This accounted for

1.2 monitors and 1.5 keyboards for every PC sold. The boom in the SOHO and the SME segment

clearly marked this change in the market, added to the huge replacement market.

Printers: rising competition



In the printer market, the domination of inkjets over dot matrix printers
(DMPs) became

more clear last year with the DMP share going down from 50% to 35% of the total market,

and inkjets growing by 24% in units. Nevertheless, this is not to underestimate the huge

potential that exists for the impact market. A sale of 2,70,800 units, accounting for

about Rs 308 crore revenues, was witnessed last year in the impact segment. The year also

saw TVS Electronics, Wipro and Epson as the three important players in the impact

business, holding marketshares of 38.6%, 34% and 19% respectively of the DMP market. The

remaining 7% was shared by players such as Lipi Data Systems, L&T and

Godrej. The

rising competition made vendors take to innovation route, resulting in the launch of

application-specific and language printers.

Another noticeable trend was the shift from 9-wire to

24-wire products-and TVSE's MSP 345 breaking the sub-Rs 10,000 price barrier upset the

price levels and sped up the transition. Competition intensified in the ink jet segment,

leading to the downfall of HP's monopoly with players such as Epson, Canon and Xerox

increasing their marketshare in the ink jet segment. In terms of units, 2,25,500 inkjet

printers were sold in the market at a value of Rs 150 crore. Canon and Panasonic entered

the market and Xerox re-entered with a wide product portfolio, competitive pricing and

high-visibility campaigns. A clear indication of the mounting competition in this category

of printers. The main segments that brought about this change were home, SOHO and SME

segments. GPTL and Redington alone contributed around 80% of the total inkjet sales, with

almost all vendors tying up with either of the above two companies for distribution.

The lasers, however, proved a sore point for the industry,

witnessing a negative growth of 1% over the previous year. With little competition from

other players in this category, HP emerged as a clear number one. Lexmark and Tektronix

did a total sales of 4,149 and 500 units respectively in the laser category.

Scanners and plotters: expanding market



An interesting happening last year was the spurt in the scanner market. Formerly a
sophisticated product for specific applications in graphics and publication, scanners saw

revenue coming from home, SOHO and SME segments. Thanks to the increased multimedia,

Internet and graphic applications which proliferated the use of scanners. In all, a total

of 39,904 scanners were sold in the market at a value of Rs 44.3 crore during the fiscal

1998-99, as against 11,000 scanners sold in the previous year. Umax, a world leader in the

scanner business, fighting rival HP, set the trend in the Indian market last year by

gaining a 55%-plus marketshare of the overall market. HP followed this with a marketshare

of 35%-plus, and launching more entry-level models in the scanners category. Price levels

going down to almost that of an entry-level inkjet printer of about Rs 6,000 also impacted

the sales.

The year also saw the launch of multi-function products

such as scanner-cum-copiers and scanner-cum-printers and many other such combinations,

which, however, didn't last, courtesy their high pricing and non-acceptance in the Indian

market. Plotters, remained almost stagnant in the market with a marginal increase in unit

sales. HP's wide format printers launched last year with competitive pricing, also upset

the performance of two major contenders Calcomp and Encad, who are present in the CAD

applications segment.

Monitors: a colorful marketplace



Another area which witnessed excitement last year was the monitor market. The last year
saw many large electronic MNCs fragment the market, and in the process increase

competition for the local brands. With price differential becoming less than Rs 1,000

between foreign and Indian brands, driven further by strong brand equity of MNCs in the

market, the monitors market saw an explosion in sales grossing 9,81,250 units. But with a

60% OEM market for monitors, the total number of branded monitors sold was 4,65,394 at a

value of Rs 252.48 crore. Samsung and LG had the toughest fight in the 15" color

monitor segment and upward, with the duo alone selling a total of 3,48,000 monitors in the

market (inclusive of OEMs). The Indian monitor market, which predominantly monochrome, for

the first time shifted to color monitors, though the transition from 14" to 15"

is not significant in terms of units sold.

Among the Indian manufacturers, Microtek emerged on the top

in overall sales in the monochrome market, having sold a total of 4,20,000 units

(inclusive of OEMs). Indian electronics major BPL, ViewSonic and Sony also entered the

market last year, adding to the tough competitive conditions in the market, but in the

bargain offering more choice to the end-users. Digital monitors gained acceptance in

the market and replaced analog counterparts in majority of new buys during the fiscal

1998-99.

Hard disk drives–market glut forces out sole

Indian vendor



The hard disk drive sales, which is closely related to PC sales, saw a total of 9,42,000
units sold in the market with a 60% OEM share. Excluding OEMs, in all about 3,76,800

branded hard disk drives were sold at a value of Rs 226.35 crore. Seagate, Quantum,

Samsung and Western Digital, which operate through distribution majors, tried to

consolidate their positions in the marketplace during the last year. Seagate established

itself as the leader in the hard disk segment, followed by Samsung and Quantum. With a

direct presence in the country, it would be interesting to watch the performance of

Samsung which enjoys a strong brand equity in the Indian market. The market also witnessed

a shift from 3GB to 4.3GB at the entry level, and higher capacity products in the market,

with significant price drops almost every quarter.

On the exports front, JTS Technology, the only manufacturer

of hard disk drives in the country closed operations, thereby causing a drop in the

exports turnover. The company which had recorded a turnover of Rs 593 crore in 1997-98,

shut shop with a total of Rs 5 crore, resulting from a glut in the worldwide hard disk

market, inventory pile-up and labor problems.

Keyboards-shifting keys



Once shifting keys a taken-for-granted product, last year the keyboard segment recorded a
total of Rs 55 crore, translating to a sale of 2,49,305 units. The market saw a shift from

cherry to membrane technology keyboards, thanks to price points almost half the cost of

cherry. Nevertheless, TVSE commanded a 40% marketshare of the total number of units sold

under the TVS Gold brand name, available with laser-etched characters. Following TVSE were

Vintron and Amkette.

The accessories and consumables business also did well in

the last year, with a boom in the home segment, increase in multimedia content and color

usage, and the proliferation of internet. Sound cards, speakers, mice, cabinets, CD racks

etc saw more sales in the home arena. In all, the peripherals industry has made its mark

in the IT industry, with each of the product lines having grabbed a distinct identity,

size and stature of its own. With the same trend continuing, it would be interesting to

see which players steal the show next year. DQ

Peripherals Market Trends

Others includes keyboards, monitors, hard disk drives, cd

drives, scanners, UPS

Top 5 Printer Vendors

Top 3 Impact Printer Vendors

Top 3 Inkjet Vendors

Top 3 Laser Vendors

Top 3 Monitor Vendors

Top 3 Keyboard Vendors

Top 3 HDD Vendors

Top 3 Scanner Vendors

DATAQUEST