BUSINESS

Industry, home demand drive PC sales growth

HOME IS THE KEY: The Vice President, Bhupendra Kumar, the Executive Director, Vinnie Mehta and President Rajendra Kumar of the Manufacturers' Association for Information Technology (MAIT) at a press conference in New Delhi on Tuesday. — Photo: V. V. Krishnan .

HOME IS THE KEY: The Vice President, Bhupendra Kumar, the Executive Director, Vinnie Mehta and President Rajendra Kumar of the Manufacturers' Association for Information Technology (MAIT) at a press conference in New Delhi on Tuesday. — Photo: V. V. Krishnan .  

Households emerge as key segment; buoyancy in small towns

Special Correspondent

NEW DELHI: Personal computer (PC) sales registered a 20 per cent growth in the last fiscal. This is attributed to a significant consumption by industry verticals such as telecom, banking, and financial services, manufacturing, retail and BPO/IT-enabled services as well as major e-Governance initiatives of the Central and State governments. The drop in prices, especially at the entry-level, saw the emergence of a strong households market.

The desktop PC market grossed 36.3 lakh units in 2004-05 and buoyant buying sentiment in the market would boost sales to over 42.5 lakh units in the current fiscal, according to the Manufacturers' Association for Information Technology (MAIT). It based the estimates on the bi-annual research conducted by the Indian Market Research Bureau.

While the 20 per cent growth in 2004-05 appears impressive, the fact is sales in the previous two fiscals grew by 32 per cent and 37 per cent, respectively. The outlook for the current fiscal is pegged at a lower 17 per cent. MAIT officials felt that Government intervention was important to keep the momentum by stepping up IT usage in sectors such as education, healthcare, rural sector and e-governance. However the situation is better than in 2001-02 when PC sales declined by 11 per cent.

Apart from the growing demand in small towns (34 per cent), another interesting feature was the drop in sales of assembled PCs and higher sales by Indian and MNC brands. The drop in prices due to technological and competitive reasons saw 51 per cent of the consumers opting for desktop PCs manufactured by MNC (35 per cent) and Indian (24 p.c.) brands.

Admitting that lower costs would drive sales "up to a point,'' MAIT officials hoped the impetus to sales in the future would come from development of local content and the strong marketing by companies offering broadband. ``Over the next four to five years, we could see growth of 25 per cent,'' hoped a MAIT official.

In terms of processor configuration and operating systems, the domination by Intel (Pentium chips) and Microsoft (Windows) continued. Pentium IV processors accounted for 80 per cent of the market share. On the operating system side, 74 per cent of the establishments had Microsoft Windows 95/98 while only two per cent had Linux. Among servers, 4 per cent had Linux and 3 per cent had other non-Windows based operating systems.

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