Indian PC market growth at 35% in 3Q04: Gartner

By Our Corporate Bureau | 16 Nov 2004

1

Mumbai: The Indian PC market grew 35.1 per cent shipping more than 885,000 units in the third quarter of 2004 according to Gartner, Inc. (NYSE: IT and ITB). This includes desktops, notebooks and servers. India's share in the Asia Pacific region increased to 10.4 per cent from 9.2 per cent in the previous quarter.

Desktop shipment grew annually by 32 per cent during this quarter while notebooks registered 126 per cent growth. This is in confirmation with growth trends observed during the first half of 2004. Small and medium businesses and finance and banking continue to be the growth drivers. "While the corporate market continued to look healthy, top vendors are now seen to be aggressively targeting the premium end of the consumer segment," said Vinod Nair, Analyst-Computing systems, Gartner India.

Commenting on the notebook market Nair said, "Local entrants are expected to gain some market share in the short term with price-point advantages over branded players, though quality of after-sales service will be highly questionable."

With regards to future trends Nair commented, "Some telecom service providers are now tapping avenues to bundle the desktop with internet service making it available at affordable monthly plans. If priced properly, this will be a good move to increase desktop penetration and to grow the market in India."

From a market share perspective, Hewlett-Packard maintained top position with 14.3 percent followed by HCL with 12.1 percent (Table 1). IBM clocked 8.3 percent market share.

Table 1
India - Top vendors Market Share for Q3 2004 (Units)

Company

Q3 2004 Market Share (%)

Q3 2003 Market Share (%)

Hewlett-Packard

14.3

11.0

HCL

12.1

9.1

IBM

8.3

6.2

Dell Inc.

3.8

3.5

Acer

3.4

3.1

Others

58.2

67.2

Note: Data includes deskbased PCs, mobile PCs, and IA32 servers.
(Source: Gartner Dataquest November 2004)

Meanwhile from an Asia Pacific (excluding Japan) perspective, 8.5 million units of PC were shipped in the third quarter 2004. This is an increase of 9.8 percent from the same period one year ago, equivalent to 3.1 percent sequentially.

All markets in the region performed positively, especially India, which grew by 35 per cent, compared to a year ago. Overall in Asia Pacific region, the professional market grew 15.7 per cent and the home market at 2.2 per cent. Growth contributors in the professional market came from India, South Korea, Malaysia, New Zealand and Vietnam where seasonally it is the buying quarter. As for the home market, the low growth rate was affected by weak performance in the South Korean market, where consumer spending is still very sluggish.

Deskbased PC market year over year growth is 6.5 per cent while mobile PC is at 26.1 per cent. Demand for desk-based PCs was driven from emerging markets such as India, Indonesia, Malaysia and Vietnam. Mobile PC growth in China and Australia continues to be strong. In India, the small shipment base of mobile PC coupled with strong demand propelled growth rates of over 100 percent.

Table 2
Asia/Pacific PC Unit Shipment Estimates, 3Q04 (in thousands)

Company

3Q04 Shipments

3Q04 Market Shares

3Q03 Shipments

3Q03 Market Shares

3Q03-3Q04 Growth

Lenovo

1,017.1

11.9%

745.8

9.6%

36.4%

Hewlett-Packard

861.8

10.1%

716.2

9.2%

20.3%

IBM

672.0

7.9%

510.0

6.6%

31.8%

Dell Inc.

616.8

7.2%

473.1

6.1%

30.4%

Founder

397.5

4.7%

218.4

2.8%

82.0%

Others

4,951.5

58.1%

5,094.0

65.7%

-2.8%

Total

8,516.7

100.0%

7,757.6

100.0%

9.8%

Note: Data includes deskbased PCs, Mobile PCs and x86-32 servers; IBM includes LG-IBM
(Source: Gartner November 2004)

Lenovo continues to be the leading vendor in Asia Pacific. Growth rate for the top 5 vendors in Asia Pacific (see table 2) have been robust and clearly at the expense of the smaller vendors where market shares have been dropping for the last 3 quarters.

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