Hardware looks ahead for 40% growth

CIOL Bureau
New Update

BANGALORE: After almost 30 per cent drop in sales in JFM quarter, partners in

the Garden City looking for a growth of 40 per cent in AMJ. According to several

channel partners, factors that will play a major role in accelerating the sales

for second quarter of this calendar year would be major IT investments expected

from the telecom industry and service providers.


According to market sources, the government is also planning to focus on IT

deployment in larger scale. On the other hand, after many dotcoms going bust,

the market is now seeing many call centers coming up, which is expected to scale

up hardware sales during the next two quarters.

The partners expect the growth to also come from the SOHO segment, as vendors

are refocusing on end-user campaigns to develop a brand loyalty for their

products. "The market has just slowed down, we will have to stimulate it

and this is the time when we have to support our channels and motivate them to

perform better," says Hewlett-Packard India’s country-marketing manager M

B Sam.

Connoisseur Electronics, a Bangalore-based distributor claims to seen a 60

per cent drop in sales in the first quarter, while Tovya Automations also

witnessed a 30 per cent slump in sales. Kobian on the other hand had seen a dip

of 30 per cent in sales during the first quarter.


Several channels are predicting a growth of 40-50 percent, though the

hardware components are expected to be available only by September this year.

According to the channel partners, the second quarter seems to be promising as

they are expecting the sales to pick-up and prices of hardware products to


"Though there is no signs of further investments from the vendors in the

market, I still feel that the second quarter will show traces of improvements,

in terms of sales towards the end. But certainly, the beginning of the second

quarter is going to be equally tough and will replicate JFM sales to a certain

extent," said Connoisseur Electronics Pvt Ltd. (managing director) Jagdish

S Varma.

The IT hardware industry is reportedly witnessing a sluggish period since

November 2000 and the much happening JFM quarter was hard hit with merger sales

recorded in the books. The entire IT hardware industry saw a recession and

several factors attributed to the slowdown.


"The true slowdown came during mid-February with the unchanged budget

and crash of the BSE. Both these factors affected the national economy and the

hardware industry to a large extent," says Sam.

While several others foresee a further dip in the figures. Most of the

vendors are putting a procurement freeze. The first half of the second quarter

will still show patterns of market slump, though we are not too sure about the

closing, says Tovya Automations Controls director, C T Raj.

Though channels in Bangalore are optimistic about a better quarter against

JFM, it might be just too early to know the reality.