MAIT Q1 PC sales cross 2mn units; Notebooks drive the market

Vibrant Home market sustains the industry; Q2 sales expected to be steady.

MAIT, the apex body representing the hardware, training and R&D services sectors of the IT industry in the country, today announced the findings of its Quarterly Industry Performance Review for the quarter April-June of fiscal 2008-09. PC sales including desktops and notebooks crossed 2 million (20 lakh) units registering a growth of seventeen percent over the same period last fiscal. Sales of notebooks and servers witnessed a robust growth during the quarter while growth in desktop consumption continued to remain marginal. Despite the domestic economy being under pressure, the market sentiment for IT consumption remains positive and sales in second quarter are expected to be steady. In the first-half of FY 2008-09 the desktop sales are expected to cross 2.49 million (24.9 lakh) units while notebooks sales are expected to exceed 1.35 million (13.5 lakh) units.

Commenting on the findings of the study, Vinnie Mehta, Executive Director, MAIT said, “Notebook consumption has driven the PC market in India in Q1 2008-09. With sales crossing 0.61 million (6.1 lakh) units in the first quarter of this fiscal, notebooks account for close to a third of the total PC market in the country, up from less than three per cent four years ago. With shifting consumer-preference in favour of notebooks over the desktop, this proportion will only get larger with time. Further, with a large number of vendors announcing ultra-portable PCs, the market is expected to become more exciting.”

Elaborating on the performance of some of the key verticals he said, “The first quarter was driven by increased consumption in the household segment while industry verticals and corporate sectors such as telecom, banking & financial services, manufacturing, e-governance and IT-enabled services, experienced steady consumption. Apart from the traditional sectors, consumption was also witnessed in SMEs, education, retail and other computer-centric small enterprises. Aggressive pricing by the PC vendors has also helped improve the PC penetration, especially in the households and the SME segments.”

“Apart from the households, the education vertical is emerging as another key driver for PC consumption in the country. With privately managed schools and colleges adopting PCs at a brisk rate, PC penetration in these segments is expected to gain traction in the near future. Further, while IT consumption in the retail sector is becoming vibrant, a large majority of the market remains to be tapped. IT adoption remains limited to the organised retail and is yet to take off in the unorganised market.” he further added.

MAIT’s Industry Performance Review - ITOPs, conducted by leading market research firm IMRB (Indian Market Research Bureau), is bi-annual and aims to address the hardware sector’s efforts to manage the business environment as well as gauge the market potential and consumer trends. The module to monitor the Industry performance every quarter alternates with the half-yearly review, using the supply side estimation model involving data collection from the top IT vendors and leading channel players. This round of the quarterly study (April-June 2008-09) involved data collation from the major vendors and around 400 resellers/vendors in the top sixteen metros in India. The quarterly review covers the market size estimation for desktops, notebooks, servers and peripherals – printers and UPS.

The desktop market grossed 1.4 million (14 lakh) units in Q1/2008-09, a growth of four percent over Q1/2007-08 (Y-o-Y). However this is fourteen percent lower than the sales in Q4/2007-08 (JFM) (sequential). This is owing to the fact that sales peak in the last quarter (JFM) of the financial year.

As per the MAIT-IMRB study the assembled desktop PCs – the smaller lesser known regional brands and unbranded desktop PCs, accounted for thirty-six percent of the total desktop sales in Q1/2008-09, while the proportion of the branded desktops was sixty-four percent. MNC brands accounted for fifty-four percent of the market while the Indian brands accounted for the rest ten percent.

The findings of the MAIT-IMRB Quarterly Study for Q1/2008-09 are indicative of the following significant trends in buying and usage patterns:

 

 

In the desktop market, banks, financial institutions, insurance companies, educational institutes, IT sector and IT related companies were primarily the lead consumers; while in the household segment, reduced prices coupled with applications for ‘entertainment’ and ‘education’ have fuelled the market.

 

Notebook sales crossed 613K units recording sixty-seven percent year-on-year growth. Consumption of notebooks was driven by reasons of affordability, mobility, sleek designs, enhanced security features and other in-built accessories. Focussed marketing initiatives by the vendors and celebrity endorsements have also contributed to increased notebooks consumption in the country. The establishments segment as well as the households witnessed healthy growth in notebook sales. With notebooks now being available at prices of sub rupees 25K, they are increasingly finding their way into the homes and SMEs. High consumption in corporates, IT companies, financial institutes, educational institutes, self-employed professionals and the Government continues to drive the notebook market. With falling prices, home users are now upgrading from desktop to notebook resulting in additional growth of the notebook market.

 

The server consumption in the first-quarter of 2008-09 was in excess of 32.8K units growing twenty-nine percent over the same period last year. The servers market was driven by IT infrastructure expansion in significant number of establishments especially the SMEs. With increased concerns on data security and on data retrieval, servers and other networking devices can be expected to grow in utility in the near future.

 

The overall printer market was sluggish. Sales of dot-matrix printer (DMP) declined by three percent, while those of laserjet and inkjet declined by thirty one percent each.

 

Consumption of UPS witnessed a decline of seven percent on year-on-year basis. With erratic power supply in the country, the positioning of UPS is fast changing to that of a power-supply device from the earlier power-backup device. The market for UPS is expected to bounce back in the next quarter.

About MAIT:
Set up in 1982 for purposes of scientific, educational and IT industry promotion, MAIT has emerged as an effective, influential and dynamic organisation. Today MAIT represents hardware manufacturers & vendors, training, R&D and associated services sectors of the Indian IT Industry. MAIT’s charter is to develop a globally competitive Indian IT Industry, promote the usage of IT in India, strengthen the role of IT in national economic development and promote business through international alliances.