The fortunes of personal computers (PC) manufacturers may change soon with consumers, small- and medium businesses (SMBs) and the government going on a buying spree in the second half of calendar year 2009.
Calendar year 2008 was a bad one for the PC industry with the total sales of PCs (desktops and notebooks) between April 2008 and March 2009 at just 6.79 million units -- a decline of 7 per cent YoY, according to a recent report by Manufacturers’ Association for Information Technology (MAIT).
The market, however, appears to be turning positive with demand coming in primarily from the government. Some states government, too, are expected to chip and and boost PC sales this quarter due to the various egovernance projects underway. Moreoever, demand from the consumer and small- and medium-sized businesses (SMBs) also appears to be picking up, according to analysts and major chip and PC manufacturers.
"We saw some signs of recovery in the AMJ (Apr-May-June) quarter this year with some demands from consumer segment. In the current quarter (July-August-September), we are seeing a strong demand coming from the consumer segment which is supplemented by the education segment, and we expect the demand to pick up further going forward," says George Paul, executive vice president - Marketing, HCL Infosystems. The consumer segment contributes to about 40 per cent of the total sales of HCL Infosystems while the rest comes from the enterprise, government and banking sectors.
"As far as the consumer segment is concerned, with the needle pointing out to better times in terms of the overall economic environment, we are seeing increased footfalls in the market place, and the consumer revival certainly seems to be looking very very positive. Vendors are also launching a refreshing range of products across categories in different form factors and performance. All these moves will certainly bring consumers back to the stores," says Prakash Bagri, Director - Marketing, South Asia of Intel.
Diptarup Chakraborti, principal research analyst, Gartner India, adds: "Consumers are now buying PCs a lot more now when compared with the last two quarters. Our forecast is that demand from consumer segment will be much better in the second half of 2009 even though the growth can still be negative on year-on-year basis. Most of the vendors are quite positive about their prospects going ahead and are being seen aggressively going ahead with their ad campaigns with the festive season (like Diwali and Dussehra) on the anvil."
Other than the consumer segment, the demand from the government, which was slack due to the Lok Sabha elections, is also starting to pick up rapidly. "The government and PSU segments are showing a two-fold increase QoQ with a series of large projects heading towards closure," explains Prakash Bagri of Intel. Some of the projects launched by the Gujarat Informatics, Assam government (in education sector), ELCOT in Tamil Nadu and e-Courts are expected to create huge demands in PC sales going forward.
However, even though the enterprise segment is yet to show a significant uptake in demand, many of the businesses are expected to take purchasing decisions as it has now become imperative for them to "refurbish" their old computing hardware. This is because of the emergence of new technologies that give much faster computing speed with lesser power consumption. More importantly, corporates that had delayed the purchase earlier have now come to the realisation that the cost of maintaining an old PC is perhaps higher than perhaps replacing it, said an industry source.
