First Quarter PC sales cross 1.7 million units: MAIT

DQC News Bureau

Bangalore:  MAIT, the apex body representing the hardware, training and
R&D services sectors of the IT industry in the country, announced the
findings of its Quarterly Industry Performance Review for the quarter April-June
of fiscal 2007-08. Accordingly PC sales including desktops and laptops crossed
1.7 million (17 lakh) units, with sales of notebooks, servers and peripherals
witnessing a robust growth during the quarter. As strong macroeconomic
conditions and upbeat market sentiment continue, sales in second quarter are
expected to be buoyant. The Desktop sales in FY 2007-08 are expected to cross
6.25 million (62.5 lakh) units.

Commenting on the findings of the study, Vinnie Mehta, Executive Director,
MAIT said, "IT consumption in the country continued to be dominated by
industry verticals and corporate sectors such as telecom, banking and financial
services, manufacturing and IT-enabled services. The demand in the April-June
quarter also rose on account of e-governance projects at the centre and various
states.

Apart from these traditional sectors, high consumption was also witnessed in
SMEs, education, retail and other computer-centric small enterprises. In
addition, the trend of increased PC purchase in households, smaller towns and
cities as witnessed over the last few quarters, continued to be steadfast. The
drop in prices of desktops enabled computers to move rapidly into SEC C as well.
Aggressive pricing by PC vendors has also helped improve the PC penetration,
especially in the households and the SME segments."

Elaborating on the performance of the some key verticals he added, "An
interesting feature during the quarter has been the resurgence of the home
market. Infact, other than Delhi and Mumbai, PC consumption in households
exceeded that in the enterprise segment. 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."

MAIT's Industry Performance Review - ITOPs, conducted by 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 2007-08) 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.

As per the study the desktop market grossed 1.4 million (14 lakh) units in
Q1/2007-08, a growth of 38 percent over Q1/2006-07 (Y-o-Y). However this is 20
percent lower than the sales in Q4/2006-07 (JFM) (sequential). This is owing to
the fact sales peak in the last quarter (JFM) of the financial year.

The assembled PCs - the smaller lesser known regional brands and unbranded
PCs, accounted for 40 percent of the PC sales in Q1/2007-08, while the
proportion of the branded PCs was 60 percent. MNC brands accounted for 39
percent of the market while the Indian brands accounted for the rest 21 percent.

In the desktop market, banks, financial institutions, insurance companies,
educational institutes, IT sector and IT related companies in the business
segment 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 touched 367K units recording 104 percent year-on-year growth
and 63 percent sequential growth. The high growth in notebook consumption can be
attributed to the drop in notebook prices and the additional benefit of mobility
& space management. 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 corporate, IT companies, financial institutes, educational
institutes, self-employed professionals and the Government continues to drive
the notebook consumption. 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 2007-08 was in excess of 25.5K
units growing 14 percent over the same period last year. The servers market is
being driven by the SMEs as most large organisations already have networking
solutions in place and only incremental growth is expected in these. 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 printer market continued to be vibrant. The overall growth in the printers
market was 32 percent. Compared to the corresponding period last year,
consumption of laser printers grew by 55 percent, inkjet by 40 percent, however
sales of dot-matrix printer (DMP) declined by 5 percent. Increased PC
consumption in the home market is driving the inkjet sales where as drop in
prices in the laser printers is driving its consumption in the SMEs.

Consumption of UPS witnessed an increase of 89 percent on year-on-year basis
however, the consumption declined by 8 percent compared to that in the January-
March quarter of 2006-07.