PC Sales In H1/2009-10 Cross 3.71 Million Units: MAIT

MAIT, the apex body representing India’s IT hardware, training and R&D services sectors, has announced the findings of its Industry Performance Review for the first-half of financial year 2009-10. The total PC sales between April and September 2009, with desktop computers, notebooks and netbooks taken together, were 3.71 million (37.1 lakh) units, registering a growth of one percent over the same period last fiscal. The sales of desktops stood at 2.61 million (26.1 lakh) units registering a decline of eleven percent. Notebooks and Netbooks taken together recorded a consumption of 1.1 million (11 lakh) units, growing forty-three percent over the same period last year. Given the current macro-economic conditions and conservative buying sentiment in the market, PC sales are expected to cross 7.3 million (73 lakh) units in FY 2009-10, growing seven percent.

Vinnie Mehta, MAIT Executive Director, said, “Although the sales growth was subdued in the enterprises, the overall consumption in the PC market was led by telecom, banking and financial service sectors, education and households segment. Verticals such as BPO/ IT-enabled services, retail and the government, which traditionally account for significant proportion of the IT market, were very conservative in their IT spends in H1/ 2009-10. The first-half of the current fiscal also witnessed deviations from the traditional downward trend in pricing for IT products as the dollar continued to be significantly strong compared to the rupee. This was mitigated, to an extent, by price drops due to technology reasons and also due to intense competition. Going forward, with signs of revival in the domestic economy, we expect positive growth for PCs and other IT products for the fiscal 2009-10.”

Delineating his thoughts on sustaining the growth of IT consumption in the country especially in these challenging times, MAIT President Ravi Aggarwal said, “Stability in policy frame-work both at the centre and the states is critical for sustenance and growth of business. It is worrisome that while most sectors of the Indian economy have started reviving; the overall sentiment in the IT hardware business remains sluggish. MAIT has emphasised in its recommendations for the forthcoming Union Budget that the stimulus package introduced by the Government last year to counter the adverse impact of the global economic downturn be continued. MAIT has strongly recommended that the 8 percent excise duty on all IT products and components be maintained. Further, it has also stressed on the removal of 4 percent Special Additional Duty (SAD), which is a significant cost for the local manufacturers as also enhancing the low rate of abatement for MRP-based excise duty assessment for IT products such as notebooks, printers, modems, etc. which makes such products expensive.”

Keeping in mind the roll-out of several e-governance initiatives across the country, Aggarwal said, “The e-governance initiatives need to be replicated across all the states in the country and completed at an accelerated pace. Providing for local-language interface will be critical for the success of such projects, especially those aimed at Government-citizen interface.”

Some salient findings of the H1 2009-10 study are given below:

The Desktop Market

* Organised vs unorganised segments: Multinational brands accounted for fifty-two percent of the total desktop market in H1/2009-10, registering a decline of seven percent over the same period last year. The proportion of Indian brands increased to twenty-two percent, registering a year-on-year growth of two percent. Consumption of assembled desktops, the smaller and lesser-known regional brands and unbranded systems witnessed a decline of thirty-eight percent in H1/2009-10, their market share declining to twenty-six percent of the total desktop sales.

* Business Consumption: Businesses accounted for fifty-three percent of the desktop sales with a thirty-two percent decline in consumption. The impact of economic slowdown was most pronounced in the businesses segment. Sales to large and small enterprises declined fifty-four percent and fourteen percent respectively. Sales increased ten percent in medium enterprises. The large and medium enterprises accounted for forty-one and forty-two percent of the market respectively.

The Notebook Market

* The proportion of notebooks in the overall PC sales is fast growing as these have rapidly become more affordable. While the growth in notebook consumption has been significantly high in the last few years, FY 2008-09 witnessed somewhat slower off-take in notebook sales. However, H1/2009-10 witnessed a healthy revival in notebook consumption with sales amounting to 1.1 million (11 lakh) units, growing forty-three percent over H1/2008-09.

* Less than expected sales to the medium enterprises resulted in the establishment segment growing only seven percent over the first-half of last fiscal. The small establishments recorded a growth of sixteen percent, while sales to the large establishments grew one-hundred-thirteen percent. The large establishments accounted for seventy-four percent of the total notebooks consumption in the establishments. Smaller towns contributed to three-fourths of the total notebook sales in the establishment segment.

The Servers Market

Sales of servers registered a decline of thirty-four percent over the first-half of the last financial year, as sales were less than expected. Sales to larger enterprises declined seventy percent while sales in small and medium enterprises declined nineteen and three percent respectively. The SMEs accounted for eighty-two percent of the total market for servers, while the larger enterprises for the rest eighteen percent. Consumption declined nineteen percent, three percent and seventy percent in small, medium and large enterprises respectively.

The Peripherals Market

* Overall printer sales at 0.62 million (6.2 lakh) units declined by twelve percent during H1/2009-10 over the same period in the last fiscal due to poor offtake of sales in the businesses as well as household segment for all categories of printers. Printer sales are forecast to cross 1.74 million (17.4 lakh) units in fiscal 2010-11.

* Consumption of laser printers at 0.15 million (1.5 lakh) units recorded a decline of three percent as consumption in large enterprises fell by fifty-four percent. Large enterprises accounted for nineteen percent of laser printers, down from fifty percent in the same period last year. Consumption of laser printers grew twenty-seven percent in small enterprises, which accounted for thirty-four percent of the market; it, however, plateaued in medium enterprises. The medium enterprises accounted for fifty-seven percent of the market share.

* Sales of dot-matrix printers at 0.17 million (1.7 lakh) units in H1/2009-10 declined seventeen percent. Consumption of dot-matrix printers in the businesses segment declined fourteen percent, while in households segment by sixty-five percent.

* Consumption of inkjet printers at 0.28 million (2.8 lakh) units declined by thirteen percent. Consumption in the business segment declined one percent, while in households segment by twenty-five percent.

The Internet Entities

* The number of active Internet entities increased to 9.4 million (94 lakh) units in September 2009, while the figure was 7.61 million (76.1 lakh) units in September 2008. With this, the number of Internet users has exceeded 70 million in the country. Internet penetration in the top 22 cities was forty-five percent among businesses and twenty percent among households. The business segment now accounts for twenty-four percent of India’s total active Internet entities and households account for the remaining seventy-six percent.

* DSL/ cable remains the most commonly used means of Internet connectivity among businesses: sixty-two percent of businesses were found using DSL/cable, fourteen percent dial-up connections, twelve percent ISDN services, six percent used leased-lines, five percent used data cards and another one percent used VSATs.