PC market grows by five percent in AMJ

IDC India research indicates that the Indian PC market showed some signs of
life in the April-May-June 2002 (AMJ) quarter. Unit shipments in AMJ 2002
totaled at 5.32 lakh, two percent higher than IDC's initial forecast. The
seasonal dip that is usually seen in AMJ was not evident this year and AMJ 2002
was lower than January-February-March 2002 (JFM) by just one percent. On a
year-on-year basis, the market showed a five percent gain.

The perk-up in the market was primarily because of healthy buying in the
consumer market on account of school holidays. Furthermore, pent up demand was
fulfilled this quarter after lower than average consumer sales experienced in
the previous six months. The home market showed signs of increased demand and in
the AMJ market was 1.85 lakh units, much higher than 1.44 lakh units in JFM. In
the commercial space, increased buying in the small business segment, call
centers and IT-enabled services enabled a positive year-on-year growth of seven
percent.

 

HP after its merger with Compaq emerged as the leader in the Indian PC market
in AMJ 2002 displacing HCL from the top spot. Local assemblers performed well in
the consumer market this quarter, as they were able to provide a greater cost
advantage and reach then MNC and large Indian branded competitors. The share of
the local assemblers and small regional brands totaled at 69 percent in AMJ
2002, up from 66 percent in the same quarter, the previous year.

Aided by large deals in education and the large business segment, notebook
computers grew by an impressive 30 percent from the previous quarter and by 19
percent on a year-on-year basis. Run rate business within this form factor also
aided market growth.

However, the above signs of growth are not adequate to indicate an overall
recovery in the market. Conditions continue to be difficult for PC vendors in
the market place. The lack of big deals in the commercial segment and
postponement of buying decisions will have a negative impact on units sold. PC
vendors have been looking at smaller towns to provide the necessary impetus to
grow but recent drought conditions would impact income and spending in such
towns. The JAS quarter is expected to see a growth rate (year-on-year) of eight
percent. The OND quarter is likely to be somewhat more positive with a growth
rate of 15 percent. For the total year 2002, IDC forecasts a growth of 6.2
percent.

A smart recovery is expected in 2003 and IDC forecasts a growth of 22.4
percent for the Indian PC market. This is in sync with expectations elsewhere in
the world. IDC in its global forecasts believes that with gradual economic
recovery translating into improved business profits, worldwide IT spending will
see growth of nine percent in 2003 to exceed $ 1 trillion for the first time in
the industry's history. This will translate into a larger total market size than
at the height of the dotcom boom in 2000. Spending on hardware products will
also see a recovery to a positive growth of five percent.

Cyber News Service