labels: hardware, manufacturer's association of information technology , it features
PC sales to touch 3 million in 2003-04 news
Our infotech bureau
07 January 2004

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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.

Vinnie Mehta 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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PC sales to touch 3 million in 2003-04