Will rising PC sales help turnaround?

BANGALORE: PC sales are expected to shoot up in the country in the coming months and the ongoing global slowdown may only aid the sales. An indication to this trend has been the 50 per cent drop in prices of PC components, including processors, over the past one year.

Even prices of Hard Disk Drives (HDDs) which shot up by 20 per cent last month, has begun to witness a downtrend and is expected to dip further in the next couple of months. The increase in prices was cited to the temporary shortage in supply of the 20 GB HDDs in the market.

This apart, the fall in RAM prices by at least 10 per cent in the past week may boost PC sales. The price has dropped by over five to six times in the past eight months. Another major factor that may contribute to this trend is the market being abuzz with rumors of Intel planning to slash processor prices by August 25, that will impact in fall of PC prices in the local market, by at least 20 per cent.

Intel is aggressively pushing its latest Pentium 4 family processors in the market. In an attempt to make P4 1-Ghz as the entry-level processor, Intel will be phasing out its PIII processors by the year-end. This will in turn make PIII processor based systems more affordable. A Celeron-based Internet enabled PC is now available at Rs 25,000 with an Internet connection from netKracker. While P4 processor based PCs are available at sub-Rs 40,000 and is expected to get lower by the end of this year.

"This is the best time to go for a computer, as prices have dropped to a new low and this is not expected to slide further. Not that the prices will go up, but newer technologies that may be launched will be costlier," says Anil Kumar Singh of Lampo Computers in Bangalore.

So has the number of PCs sold has gone up? "No, not yet. The numbers have not been encouraging in the past eight months and have certainly shown no signs of growth. But it looks promising now as the prices, especially the Pentium processor-based systems at sub-Rs 30,000, is becoming very attractive for the consumer," adds Anil.

Prices have dropped more than 50 per cent over the last year but so have the sales. "Sales have dropped over 50 per cent as against last year. The only positive aspect of this slowdown has been the pricing factor of the products. Expectations were high and so traders, vendors and distributors have expanded in infrastructure and stocked products, which has put the players in a jam," says Jagdish S Varma of Connoisseur, a Genuine Intel Dealer.

But then who are the big spenders in this sluggish market. Financial, educational institutions, government departments, call centers are some of the sectors which are spending on infrastructure. However, sales in the home segment which had seen an unprecedented high in the past couple of years has slowed down.

But the forthcoming festive season is expected to boost sales in the home segment and dealers are now keeping their fingers crossed hoping for a rebound in sales in the coming months.

According to Arcamax’s G Vinod, "I expect the sales to double in the festive season. We sell about 350 systems a month, presently across Karnataka. Although no special festive bonanza has been planned, the sales are expected to rise, as we have tied up with several retailers who will cater to the home segment. We have also expanded our operations across the country and this should boost our sales figures."