Moving Up

Things are beginning to happen again in the PC market. According to the latest report of the market research agency, IDC

(India), PC shipments in April to June this year has increased by five percent. And this is two

percent higher than IDC's forecast.

The IDC study brings out some other interesting facts also. The seasonal dip in PC sales that happen during the summer

season did not happen this year. 

This is a good sign for the market. Also the dip in sales compared to the previous three months (January to March) was also

just one percent.

IDC attributes the market buoyancy to the purchases by the home segment. 

Consumers, it seems, have bought computers in significant numbers to keep their children occupied at home in the torrid

summer heat. This shows up in the numbers. Some 1.85 lakh of the 5.32 lakh PC units sold in AMJ went into

homes. This is significantly higher than the 1.44 lakh units lapped up by home buyers in JFM. The other major buyers were the small business

segment, IT-enabled services and call services.

Another significant development is the increasing hold of the gray market. Its market share has increased to 69 percent, an

increase of 3 percent over the same period in 2001. The share of the organized, branded PC market is

declining in each quarter. Equally significant is the spurt in numbers of the notebook computers. This segment showed a 30 percent growth over

the previous quarter and a 19 percent growth over the same period in the previous years. Education sector and big companies

seem to have picked up notebooks in large numbers. The reduction in prices of notebooks and the

entry of locally assembled notebooks using genuine components from companies like Intel have helped this segment grow.

Yet, the IDC study cautions that it is not yet back to the boom days of the past. There are too few big deals taking place in

the commercial segment. 

Big buying decisions are still on hold, waiting for the recovery of deficient monsoon-hit economy. Taking all these factors into

account, IDC predicts a 8 percent growth in PC numbers in July-September, and 15 percent

in October-November-December. And the icing on the cake is a recovery of the market in 2003 with PC sales likely to grow

by 22.4 percent.