Domestic PC Vendors Struggle To Match Up With MNCs

According to Gartner, Multinational-Corporation (MNC) PC brands have overtaken the local Indian PC brands in terms of sales, growth rates and marketing activities. Indian branded vendors like HCL, Zenith, Wipro and PCS account for only14% of the Indian desk-based PC market and 6% of the Indian mobile-PC market. According to Gartner, only HCL has withstood the competition. However, even they are losing out to MNCs in the consumer segment.

The Indian PC landscape is divided among three different groups: MNCs, local brands and white box vendors. In the past few years, although local brands are growing at a steady pace, they are clearly way behind the growth rates of the MNC brands. Indian vendors’ shipments grew 18% year over year in 2006 and 35% year over year in 2005, while MNC shipments grew 73% in 2006 and 50% in 2005.

“Unable to withstand the pressure of the marketing blitz and the reach of the MNC brands, the local brands have almost exited the consumer segment and are rethinking their strategy to focus more on government, education, and small and midsize business (SMB) segments”, said Diptarup Chakraborti, principal research analyst for Gartner’s client computing group. “Moreover, the mobile-PC segment in India, which has been growing at 74% year on year, has seen little traction by local brands. MNC brands are dominating this niche yet high margin segment with 94% of the market share.”

Gartner believes that the local brands can improve their market share in India by improving their product line-up by introducing and pushing AMD-based products; increasing their brand visibility; and improving channel mind share.