 "PC shipments decline worldwide for sixth consecutive quarter")
Worldwide PC shipments totaled 60.6 million in the Q1 of CY2016 , registering a fall of 11.5%, said IDC.
The research and analyst firm blamed the drop in the Indian PC market to softness in the consumer market segment the numbers also said that commercial market has not seen much activity. The consumer market declined 16% q-o-q and commercial market was down 24.5%.
One of the reasons for the drop in the PC market in India despite the fact that PC penetration in India is less than 10% (lower than other developing countries) is because PC vendors are yet to penetrate into the tier II and III cities.
“We have anecdotal evidence that vendors are aware of the potential of these markets and are beginning to use innovative partnership models to penetrate these markets.
We believe that there’s a scope of improvement as increasing the penetration of PCs would not only contribute to the economic drivers but it would carve a path towards a developed and computer-educated society. However, vendors need to become more aware of the potential and unique characteristics, for example an increase in usage of the online channel for purchasing PCs, of these markets, and develop the right channel and offerings to address them,” said Manish Yadav, senior market analyst, client devices, IDC India.
The other reason for the PC market to dip is no pick-up in commercial segment. With Windows 10 uptake has not yet begun among the enterprises. Also the fact that though Digital India is being talked about, a lot of implementation is yet to take-off, which may give a spurt of growth for PC consumption. “While the policy direction laid by the Government indicates a positive momentum going forward, it will be crucial to firm up the implementation strategy as well,” added Yadav.
The other reason for the PC shipments to fall in India is more and more content consumption happening on the smartphones and tablets. “The PC market has been facing challenges from the introduction of newer form factor devices, such as tablets, phablets and smartphones that enable consumers to consume content (such as checking e-mails and Facebook) with more convenience and at a lower price point than a desktop or notebook. Thus, the growth in the smartphone industry is contributing significantly to the decline in the PC growth. From the vendor perspective, PC market is also plagued with the challenge of creating innovative products while keeping the price point low. This is a conundrum that most vendors have not been able to crack,” explains Yadav.
Though it’s true that the mobile phone market share has increased much faster than the PC penetration, in the recent time smartphone shipments too have been falling.
IDC reported that for two consecutive quarter smartphone shipment has been falling down. For the Q12016 smartphone shipment slipped 8.2% q-o-q. One of the reasons for the drop is shipment of smartphone has been built-up of inventory. According to third party sources inventory level was as high as 8-9% varying according to vendor.
“If you look at the mobile subscriber base, though it has been growing the pace is not as it was earlier. If the subscriber base is not growing that fast then how will the smartphone sale increase,” said Faisal Kawoosa, Lead Analyst CMR’s Telecom Practice.
CMR, research and analyst firm, also adds that tier-I and -II cities are getting saturated in smartphone consumptions and vendors need to focus on smaller cities. According to CMR-MXpresso revealed that the top five Smartphone brands (excluding LYF of Reliance Retail) held 68% combined market share in 1Q CY 2016 and 93% of their sales took place in Category A and B telecom circles.
It seems that both PC vendors and smartphone vendors need to focus on the tier II and III cities to increase their sales.
