PC sales in India cross 1.7mn in Q1

BANGALORE: : MAIT (Manufacturers’ Association for Information Technology) today announced the findings of its Quarterly Industry Performance Review for the quarter April-June of fiscal 2007-08. PC sales including desktops and laptops crossed 1.7 million (17 lakh) units, with sales of notebooks, servers and peripherals witnessing a robust growth during the quarter.

As strong macroeconomic conditions and upbeat market sentiment continue, sales in second quarter are expected to be buoyant. The Desktop sales in FY 2007-08 are expected to cross 6.25 million (62.5 lakh) units. 

Commenting on the findings of the study, Vinnie Mehta, executive director, MAIT said, “IT consumption in the country continued to be dominated by Industry verticals and corporate sectors such as telecom, banking & financial services, manufacturing and IT-enabled services. The demand in the April-June quarter also rose on account of e-governance projects at the centre and various states.

Apart from these traditional sectors, high consumption was also witnessed in SMEs, education, retail and other computer-centric small enterprises.  In addition, the trend of increased PC purchase in households, smaller towns and cities as witnessed over the last few quarters, continued to be steadfast. The drop in prices of desktops enabled computers to move rapidly into SEC C as well. Aggressive pricing by  PC vendors has also helped improve the PC penetration, especially in the households and the SME segments.” 

Elaborating on the performance of the some key verticals he added, “An interesting feature during the quarter has been the resurgence of the home market. Infact, other than Delhi and Mumbai,  PC consumption in households exceeded that in the enterprise segment. The education vertical is emerging as another key driver for PC consumption in the country.

With privately managed schools and colleges adopting PCs at a brisk rate, PC penetration in these segments is expected to gain traction in the near future.  Further, while IT consumption in the retail sector is becoming vibrant, a large majority of the market remains to be tapped. IT adoption remains limited to the organised retail and is yet to take off in the unorganised market.” 

MAIT’s Industry Performance Review - ITOPs, conducted by leading market research firm IMRB (Indian Market Research Bureau), is bi-annual and aims to address the hardware sector’s efforts to manage the business environment as well as gauge the market potential and consumer trends. The module to monitor the Industry performance every quarter alternates with the half-yearly review, using the supply side estimation model involving data collection from the top IT vendors and leading channel players.

This round of the quarterly study (April-June 2007-08) involved data collation from the major vendors and around 400 resellers/vendors in the top sixteen metros in India. The quarterly review covers the market size estimation for desktops, notebooks, servers and peripherals – printers and UPS.

Chart 1: Quarterly PC Sales – Q3/2005-06 to Q1/2007-08

As per the MAIT-IMRB study the Assembled PCs – the smaller lesser known regional brands and unbranded PCs, accounted for 40 percent of the PC sales in Q1/2007-08, while the proportion of the branded PCs was 60 percent. MNC brands accounted for 39 percent of the market while the Indian brands accounted for the rest 21 percent.

Chart 2: Quarterly Peripheral Sales –  Q3/2005-06 to Q1/2007-08

The findings of the MAIT-IMRB Quarterly Study for Q1/2007-08 are indicative of the following significant trends in buying and usage patterns:

· In the desktop market, banks, financial institutions, insurance companies, educational institutes, IT sector and IT related companies in the business segment were primarily the lead consumers; while in the household segment, reduced prices coupled with applications for ‘entertainment’ and ‘education’ have fuelled the market.

· Notebook sales touched 367K units recording 104 percent year-on-year growth and 63 percent sequential growth. The high growth in notebook consumption can be attributed to the drop in notebook prices and the additional benefit of mobility & space management. With notebooks now being available at prices of sub rupees 25K, they are increasingly finding their way into the homes and SMEs. High consumption in corporates, IT companies, financial institutes, educational institutes, self-employed professionals and the Government continues to drive the notebook consumption. With falling prices, home users are now upgrading from desktop to notebook resulting in additional growth of the notebook market.

· The server consumption in the first-quarter of 2007-08 was in excess of 25.5K units growing 14 percent over the same period last year. The servers market is being driven by the SMEs as most large organisations already have networking solutions in place and only incremental growth is expected in these. With increased concerns on data security and on data retrieval, servers and other networking devices can be expected to grow in utility in the near future.

· The printer market continued to be vibrant. The overall growth in the printers market was 32 percent. Compared to the corresponding period last year, consumption of laser printers grew by 55 percent, inkjet by 40 percent, however sales of dot-matrix printer (DMP) declined by 5 percent. Increased PC consumption in the home market is driving the inkjet sales where as drop in prices in the laser printers is driving its consumption in the SMEs.

· Consumption of UPS witnessed an increase of 89 percent on year-on-year basis however, the consumption declined by 8 percent compared to that in the January- March quarter of 2006-07.