Down market

DQW Bureau
New Update

The Indian summer has started early in most parts of the

country. But it seems the sunshine has yet to penetrate in its full glory in to

the markets, especially in the IT sector.


Data from key markets in the North and South indicate

that there is a lack of sunshine in sales.

Resellers in the Delhi market have talked about 30-40

percent decline in PC and other hardware equipment sale in March. The situation

is more or less the same in the other markets too. What has been a peculiar

feature this year is the absence of  fiscal-year end rush of orders from

government agencies, companies and institutions. In fact, last year, the

March-end order book of one of the leading assemblers was so full that he

couldn't entertain fresh bookings till the end of the next quarters. Very few

players are known to enjoy the 'problem of plenty' this time.

Reasons are many. The slow down in PC sales had stared

towards the end of 2000. The trend continues and nationally, market researchers

have reduced their estimates of fiscal years sales to 1.6 million from nearly 2

million sometime back itself. The market had looked to the Union Budget of 28

February to perk up the sentiments.  Unlike the previous years, the Budget

did not provide any meaningful stimulant to the computer hardware sector. After

the initial euphoria, the crash of the stock markets and the political

uncertainty induced by the Tehelka tapes have further dampened the market



Though a slow down in the US economy has been in the

offing for nearly six months, the impact of it has started to filter in only

recently, thanks to the decline in the performance of the old economy companies.

Though there is no direct linkage to the Indian market, the US economy drives

the business sentiments in many markets around the world and India is no

exception to the increasing linkages to the world's largest economy.

Together these happenings have led to the vanishing of

the 'feel good' factor in the business segment. As individuals, and

organizations conserve their resources to last out an emerging economic slow

down, the IT sector has become a casualty. The situation is likely to remain the

same for a few more months, especially in the South, where Tamil Nadu and Kerala

will have the State Assembly elections in early May. In the run up to the

elections, limited government funds are being used up in beefing up the brick

and mortar infrastructure, such as roads, which may earn more brownie points for

the ruling parties. Computers can wait after all, is the credo.

Even in the midst of the summer, one hopes that the

opportunities opened up by the ever increasing demand for IT training will ramp

up the demand for IT products and services. Also, the market expects better

demand as global majors chose India as a preferred outsourcing for their IT

services requirements. Ford and the World Bank just moved a large part of their

back office operations, which are IT-intensive, to Chennai. If many more Fords

make a beeline to India, there will be something for the resellers to smile.