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New
Delhi: The Indian desktop PC market grossed 12.58
lakh units in the six months ended Sept 2003, registering
a growth of 32 per cent over the same period in the
previous year, according to MAIT, the association of
hardware, training and R&D services sectors of the
Indian IT industry. This is the first time first-half
sales have crossed the 1 million mark. MAIT expects
PC sales for the full year to touch 3 million.
MAIT
cites "sound macroeconomic conditions" and
"buoyant buying sentiment in the market" as
the reasons for its revising its PC sales growth projections
for FY 2003-04 from the earlier 20 per cent to 30 per
cent. PC sales in 2002-03 were 2.3 million. These figures
are contained in MAIT''s industry performance review
for the first-half of 2003-04.
According
to MAIT, the boost has come from sectors such as telecom,
banking and financial services, IT-enabled services
and the central and state governments. Another factor
was the drop in prices, especially for entry-level products,
which has perked up purchases by small and medium enterprises
and homes. The trend of increased PC sales in smaller
towns and cities, witnessed last year, has continued
undiminished.
Entry
level PC prices have dropped to Rs.20,000; and those
for notebooks to Rs.50,000, and servers to less than
Rs.1 lakh. The prices of inkjet and laser printers have
also declined.
 MAIT''s
half-yearly Industry Performance Review, or ITOPs, is
conducted by the Indian Market Research Bureau. MAIT
also reviews the industry''s quarterly performance. The
ITOPs study for the first-half of FY 2003-04 involved
face-to-face interviews with over 20,000 respondents
selected randomly from 16 cities in India. The MAIT-IMRB
surveys, initiated in 1996-97, cover five broad product
segments - computers, networking products, printers,
other peripherals and the Internet.
Assembled
PC share grows
Smaller, lesser known regional brands and unbranded
systems, accounted for 57 per cent of the PC sales in
H1/2003-04 from 48 per cent on a year-to-year basis.
Sales of such ''assembled'' brands grew by 57 per cent.
The share of Indian brands declined to 20 per cent from
22 per cent earlier; but their absolute numbers grew
20 per cent. The share of MNC brands fell from the earlier
30 per cent to 23 per cent, while their sales rose 1
per cent.
PC
sales to the business segment improved 20 per cent,
and accounted for 74 per cent of total sales. Sales
to households sales grew 88 per cent, and to home offices
97 per cent. MAIT attributes the surge in sales by the
unorganised sector to increased purchases by households,
90 per cent of whose purchases are made from the unorganised
sector.
In
the business segment, sales to larger businesses (over
50 employees) rose 21 per cent, and to the medium business
segment (10 to 50 employees) by 39 per cent, while sales
to small enterprises remained unchanged. Among verticals,
the retail segment witnessed a 54 per cent increase
in consumption.
In
terms of processor configuration, PC sales in H1/2003-04
were dominated by Intel P-4, which accounted for a 66
per cent share, followed by P-3, which accounted for
14 per cent. The share of AMD, Cyrix and other processors
grew from 10 per cent to 18 per cent over the same period
last year, reflecting the demand for low-cost computing
solutions.
In
terms of operating systems, 84 per cent of the PC-based
businesses bought Windows 95/98, and only 2 per cent
bought Linux. In the case of the server-owning enterprises,
10 per cent bought Linux, Unix, Novel and other non-Windows-based
operating systems, and the rest Windows-based systems.
Windows NT accounted for 13 per cent, Windows 95/98
for 45 per cent, and Windows 2000 for 25 per cent.
According
to the MAIT-IMRB study, overall printer sales in H1/2003-04
grew 20 per cent on a year-to-year basis. Dot-matrix
printer sales shot up 22 per cent with increased offtake
from the household and retail segments. Inkjet printer
sales grew 21 per cent, led by a 102 per cent increase
in household purchases; inkjet sales in the business
segment dropped 22 per cent. Laser printers recorded
9 per cent growth due to significantly higher sales
in the retail segment. MAIT has revised its growth projection
for FY 2003-04 for overall printer sales to 20 per cent
from 15 per cent; sales are expected to cross 1 million.
 Commenting
on the findings of the study, MAIT executive director
Vinnie Mehta says, "While the mood in the industry
is upbeat today, we are still lagging in terms of volumes
required to be internationally competitive. And this
becomes even more critical when the health of the IT
industry and its proliferation is a key indicator of
the competitiveness of a nation.
"The
hardware industry in India, today, has to grapple with
one of the highest taxation levels in the world as a
result of which PC penetration is among the lowest (nine
per thousand people) while the prices are the highest;
30 per cent more than that of the global average."
He
says that low market consumption and a large grey market
have made it unattractive for investments. "To
emerge as a true superpower in IT we need not only to
sustain the competitiveness of the software industry
through a robust hardware industry but also spur the
domestic consumption and provide information access
to the masses by making IT and PCs more affordable."
According
to Mehta, the domestic IT is on the anvil of revolution
and this can be achieved through a reduction in excise
duty from 16 per cent to 8 per cent, an increase in
depreciation from 60 per cent to 100 per cent, and removal
of the 4 per cent SAD or making the products "CENVATable".
He adds: "These recommendations are also necessary
to remain competitive in the near zero duty regime which
we will encounter due to the implementation of the IT
agreement in 2005."
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