MAIT: PC Sales Cross 3.71 Million Units in First Half of 2009-10
IT News Online Staff
2010-02-15
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 1% over the same period last fiscal.
The sales of desktops stood at 2.61 million (26.1 lakh) units registering a decline of 11%. Notebooks and netbooks taken together recorded a consumption of 1.1 million (11 lakh) units, growing 43% 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 7%.
MAIT Executive Director, Vinnie Mehta, 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."
MAIT President, Ravi Aggarwal, said, "Stability in policy framework both at the center 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 emphasized 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% excise duty on all IT products and components be maintained."
"Further, it has also stressed on the removal of 4% 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," said Aggarwal.
"The Department of IT Taskforce has suggested several measures to overcome the hurdles being faced by the industry not only in the short-run, but has also defined a roadmap for the industry in the medium and long-run. It should be made mandatory for nationalized and PSU banks to earmark funds for easy and subsidized loans for purchase of IT products and solutions for the SMEs and the home consumers, especially for education. Similarly, Governments - Central and State should extend interest free loans to all their employees for purchase of IT products. Further, as several e-governance projects are being rolled out, these 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," added Aggarwal.
The bi-annual MAIT Industry Performance Review - ITOPs, conducted by market research firm IMRB International is a survey of the IT hardware sector's efforts to manage the business environment, gauge the market potential and consumer trends. This round of the study involved face-to-face interviews with over 25,000 respondents selected randomly across 22 cities in India. The MAIT-IMRB study encompasses five broad product segments - computers, networking products, printers, other peripherals and Internet connections.
Some of the findings of the H1 2009-10:
The Desktop Market:
Market segmentation by organized vs. unorganized segments: Multinational brands accounted for 52% of the total desktop market in H1 2009-10, registering a decline of 7% over the same period last year. The proportion of Indian brands increased to 22%, registering a year-on-year growth of 2%. Consumption of assembled desktops, the smaller and lesser-known regional brands and unbranded systems witnessed a decline of 38% in H1 2009-10, their market share declining to 26% of the total desktop sales.
Market segmentation by businesses vs. household consumption: Businesses accounted for 53% of the desktop sales with a 32% decline in consumption. The impact of economic slowdown was most pronounced in the businesses segment. Sales to large and small enterprises declined 54% and 14%, respectively. Sales increased 10% in medium enterprises. The large and medium enterprises accounted for 41% and 42% of the market, respectively.
Households contributed to account for 47% of the total desktop market, registering a growth of 40% over H1 2008-09. Consumption in the SEC A grew by 4% accounting for 24% of the market share in the households segment. SEC B accounted for 44% market share, registering 41% growth, while SEC C registered 90% growth, garnering a market share of 32%.
Market segmentation by town-class: The proportion of desktops consumption in the smaller towns and cities has steadily increased over the last few years. In the first half of 2009-10, smaller towns accounted for a market share of 70% of the total desktop sales. Consumption of desktops was adversely impacted across the various town-classes. Consumption in the smaller towns declined by 9%. The top four metros accounted for a quarter of the total desktops purchased, while the Class B cities accounted for 5% of the market. Consumption in top four metros declined 10%, while that in Class B cities declined 28%.
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 the notebook consumption had been significantly high in the last few years, the 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 43% over H1 2008-09.
Less than expected sales to the medium enterprises resulted in the establishment segment growing only 7% over the first-half of last fiscal. The small establishments recorded a growth of 16%, while sales to the large establishments grew 113%. The large establishments accounted for 74% of the total notebooks consumption in the establishments. Smaller towns contributed to three-fourths of the total notebook sales in the establishment segment.
The household segment, accounting for 61% of the overall notebook sales in the country, registered a growth of 82% in the first half of the current fiscal. The SEC A and SEC B households, together, contributed to over 90% of the notebook sales in the household segment. Notebooks have started making rapid inroads into the SEC C as well.
The Servers Market:
Sales of Servers registered a decline of 34% over the first-half of the last financial year, as sales were less than expected. Sales to larger enterprises declined 70%, while sales in small and medium enterprises declined 19% and 3%, respectively. The SMEs accounted for 82% of the total market for servers, while the larger enterprises for the rest 18%. Consumption declined 19%, 3% and 70% in small, medium and large enterprises, respectively.
The Peripherals Market:
Overall printer sales at 0.62 million (6.2 lakh) units declined by 12% 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 3% as consumption in large enterprises fell by 54%. Large enterprises accounted for 19% of laser printers, down from 50% in the same period last year. Consumption of laser printers grew 27% in small enterprises, which accounted for 43% of the market; it, however, plateaued in medium enterprises. The medium enterprises accounted for 57% of the market share.
Sales of dot-matrix printers at 0.17 million (1.7 lakh) units in H1 2009-10 declined 17%. Consumption of dot-matrix printers in the businesses segment declined 14%, while in households segment by 65%.
Consumption of inkjet printers at 0.28 million (2.8 lakh) units declined by 13%. Consumption in the business segment declined 1%, while in households segment by 25%.
The UPS market, led by the households, registered a growth of 104% in H1 2009-10 over H1 2008-09 with 1.58 million (15.8 lakh) units in sales. Households with 85% market share registered a growth of 229%, while businesses segment with 15% market declined 35%. Consumption in Class A cities grew 325%, 361% in Class B cities and by 20% in other smaller towns and cities.
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 millions in the country. Internet penetration in the top 22 cities was 45% among businesses and 20%, among households. The business segment now accounts for 24% of India's total active Internet entities and households account for the remaining 76%.
DSL/cable remains the most commonly used means of Internet connectivity among businesses: 62% of businesses were found using DSL/cable, 14% dial-up connections, 12% ISDN services, 6% used leased-lines, 5% used data cards and another 1% used VSATs.
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