Lenovo set to regain top slot in Indian PC market

Lenovo is set to regain the top slot in the Indian personal computer (PC) market, with the company bagging a major part of the fourth and fifth phases of the Tamil Nadu government's free laptop programme from the implementing agency, Electronics Corporation of Tamil Nadu Ltd.

Lenovo will supply about 60 per cent of the 1.1 million units, worth about $150 million (Rs 950 crore), through the next two quarters. Two other vendors, Acer and HP, will supply the remaining units.

"With this big deal, we will definitely become the number one (PC vendor in India) this quarter and the next," said Rahul Agarwal, managing director of Lenovo India. "So, while our market share will get a boost with this mega contract, we track our market share with and without (such government contracts). Clearly, we need to grow our share in every segment and we are quite confident of doing that."

LOOKING FOR A BIGGER PIE

• Lenovo has bagged a major part of the fourth and fifth phases of the Tamil Nadu government's free laptop programme from the implementing agency, Electronics Corporation of Tamil Nadu
   
• Lenovo will supply about 60 per cent of the 1.1 million units, worth about Rs 950 crore, through the next two quarters
   
• According IDC's Asia Pacific quarterly PC tracker, Lenovo was third in the PC market in India in the quarter ended March this year

According IDC's Asia Pacific quarterly PC tracker, Lenovo was third in the overall PC market in India in the quarter ended March this year, with a share of 19.8 per cent. While HP was first (26 per cent market share), Dell was second (23.4 per cent).

Earlier, a rise in market share was primarily dependent on retail consumers or enterprises. But through the past couple of years, the government segment has emerged as a major buyer of PCs. While Lenovo is set to jump to the top position due to the sheer volume and size of the Tamil Nadu contract, HP had earlier seen a UP government contract for supply of free laptops drive its market share.

With the youth increasingly preferring devices with smaller form factors such as smartphones, tablets and phablets, the PC market is seeing rough weather.

Many, however, remain positive. "We see the PC market growing from here because if you look at your child's education, the gaming segment or at proper Soho (small office, home office) professionals, they need laptops or PCs. In the commercial/enterprise space, we are not seeing PCs being replaced. Even in the consumer space, there is equilibrium," said Agarwal. "But the growth expected to come from first-time buyers is not happening, as people who didn't buy a PC earlier are still not buying it, as they are buying smartphones."

Tamil Nadu's free laptop programme for school children was one of major promises of the All India Anna Dravida Munnetra Kazhagam ahead of the 2011 Assembly elections in the state. So far, the state government has distributed about two million laptops under the programme, across three phases.

In terms of the single-largest government contract for supply of laptops, one by the Uttar Pradesh government fits the bill. The Akhilesh Yadav-led Samajwadi Party government in the state had procured 1.6 million units to supply class-XII pass-outs. HP was the sole supplier for the project, which has since been discontinued.