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PC biz sluggish in India, but rescued by state-driven freebies

Bangalore – Aug 23, 2013: An otherwise sluggish personal computer business in India,  saw record shipments in the second  quarter of 2013 --  thanks to all those freebies doled out by states to students.

The overall shipments for Q2 2013 stood at 3.53 million units  -- a substantial year-on-year growth of 24.0% over Q2 2012 and a quarter-on-quarter surge of about 30.2 % over Q1 2013, finds IDC's Asia Pacific Quarterly PC Tracker, Q2 2013

Says Kiran Kumar, Research Manage IDC:  “State-led manifesto driven spending on notebooks steered commercial investments in the India PC market in Q2 2013. Special projects currently being executed in states like UP, Rajasthan and Tamil Nadu accounted for roughly one-third of the total PC market size in Q2. However, the organic demand for PCs in India outside special projects has weakened, which remains a cause of concern for PC vendors.Further, rupee slide derailed enterprise spending, as the investment decisions remained seemingly delayed across most of the verticals.”

Adds Manish Yadav, Market Analyst: “Further, the announcement of new tax policy i.e. Local Body Tax in Mumbai and suburban areas halted the shipment growth in May. But June largely reversed this stillness aided by back-to-school campaigns and loading of stocks across partners in preparation to the impending price hike on account of rupee volatility.”

HP recorded its highest ever quarterly market share with an exceptional 34.1% share in Q2 2013. Delivering an outstanding performance, HP stayed dominant across all segments in commercial and  consumer PC business in India. “Though the enterprise PC business was primarily  driven by the single largest notebook deal in the state of Uttar Pradesh, the vendor also led the consumer PC business in India with their well established channel network and incentive programs tied with their effective pricing strategies", adds Kiran.

Dell took the second place with a share of 11.0% in Q2 2013. “Their presence at entry level price-band has given them much room to drive their volumes.  Also, the vendor’s continued efforts in increasing retail visibility and their effective channel positioning, was ably supported by their marketing campaigns”, adds Manish.

Acer took third spot with market share of 10.4%. Acer continues to thrive in government and education projects spread across the country. The vendor executed large deals in the states of Tamil Nadu and Rajasthan, which fuelled their growth in the commercial PC market in Q2.

Lenovo took fourth spot with  a 9.3% share, while other brands accounted for the balance 35.2%

Manish adds a cautionary note that “PC business continues to thrive on wafer thin margins and it is still early to comment on the success of new form factors, which were anticipated to drive the overall value of this business. Also, outside special projects, demand from enterprises and government remain largely suppressed painting a gloomy scenario on commercial PC business, in the near future.”




    


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