The Hindu : Economic growth to drive PC sales

Online edition of India's National Newspaper
Tuesday, Apr 15, 2003

Business

Business

Economic growth to drive PC sales

By Our Staff Correspondent

MUMBAI APRIL 14. Economic growth and strong offerings from assemblers will be the leading demand drivers for the personal computer (PC) market in India in 2003, according to the latest report from Dataquest Inc., a unit of Gartner.

The report `India: PC market outlook, 2003' has cited five key demand drivers for the PC market in 2003. In the professional market, as the technology gap between desktop PCs and mobile PCs narrows and prices continue to drop, the demand for mobile PCs is expected to grow significantly.

Although not impacted as severely as other countries, India has had its share of worries because of the global economic slowdown. Recent positive trends indicate that organisations are easing restrictions on IT budgets. This will result in increased PC uptake in the corporate segment. Thirdly, due to significant number of small and medium businesses (SMBs) in India, and since most SMBs are under-utilising technology, uptake in this segment is expected to grow and boost PC sales in the coming year.

In the private market, mobile adoption in the home segment is yet to make a mark, so desktops will be the prime area of consumption. This will initially drive demand in metropolitan areas, as families purchase desktops for their children to fulfil academic requirements. Most of these will be first-time users, according to the report.

Lastly, price and personalised service are the strengths of the white-box segment, compared with the branded players, and this trend seems to be gathering steam. The middle-class population is heavily drawn to these vendors. It will be increasingly difficult for branded vendors to compete with white-box segment unless they augment their service capabilities to significantly differentiate themselves.

"With a population to rival China, India has a lot to offer in terms of demand but a low GDP per capita means that margins will be tight. Although the forecast is for strong volume growth in 2003, the margins will be stretched,'' said Vinod Nair, research analyst with Gartner India. The report concludes that vendors must determine the optimal price/performance/service mix in order to build the brand with a solid product offering whilst also maintaining competitive price levels.

Printer friendly page
Send this article to Friends by E-Mail

Business