MAIT, the apex body representing the hardware, training and R&D services sectors of the IT industry in the country, on Wednesday announced the findings of its Quarterly Industry Performance Review for the quarter October-December of FY 2005-06.
PC sales -- desktops and laptops taken together crossed 11 lakh (1.1 million) units.
Sales of notebooks and peripherals witnessed robust growth. With strong macro economic conditions and upbeat market sentiment, sales in fourth quarter are expected to be buoyant.
Sales in FY 2005-06 are expected to cross 4.4 million units.
IT consumption in the country continued to be dominated by Industry verticals and corporate sectors such as telecom, banking & financial services, manufacturing and IT-enabled services.
The consumption in these segments was largely driven by investments in software, solutions and other enterprise products. Apart from these traditional sectors, high consumption was also witnessed in SMEs, education, retail and other computer centric small enterprises.
In addition, the trend of increased PC purchase in households, smaller towns and cities as witnessed over the last few quarters, continued to be steadfast. Aggressive pricing by the PC vendors has also helped improve the PC penetration, especially in the households and the SME segments.
MAIT's Industry Performance Review - ITOPs, conducted by the leading market research firm IMRB (Indian Market Research Bureau), is bi-annual and aims to address the hardware sector's efforts to manage the business environment, gauge the market potential and consumer trends.
The module to monitor the industry performance every quarter alternates with the half-yearly review, using the supply side estimation model involving data collection from the top IT vendors and leading channel players. This round of the quarterly study (October-December 2005-06) involved data collation from the major vendors and around 400 resellers/vendors in the top sixteen metros in India.
The quarterly review covers the market size estimation for desktop PCs, notebooks, servers and peripherals -- printers and UPS.
The desktop market grossed 9.67 lakh (967,000) units in Q3/2005-06, a growth of 5% over Q3/2004-05 (Y-o-Y). Although it is 30% lower than the sales in Q2/2004-05 (JAS) (sequential), sales are expected to be buoyant in JFM as IT sales peak in the last quarter (JFM) of the financial year.
As per the MAIT-IMRB study the assembled PCs -- the smaller lesser known regional brands and unbranded systems, accounted for 38% of the PC sales in Q3/2005-06, while the proportion of the branded PCs was 62%. MNC brands accounted for 34% of the market while the Indian brands accounted for the rest 28%.
The findings of the MAIT-IMRB Quarterly Study for Q1/2005-06 are indicative of the following significant trends in buying and usage patterns:
In the desktop market, in the business segment, it was primarily the banks, financial institutions, insurance companies, educational institutes, IT sector and IT-related companies that were the lead consumers; while in the household segment, reduced prices coupled with applications for 'entertainment' and 'education' have fuelled the market.
The households market that witnessed a slight slow down in the earlier quarters has once again become vibrant.
Notebook sales touched 125,000 units recording 93% y-o-y growth and 67% sequential growth. The high growth in Notebook consumption can be attributed to the drop in notebook prices and the additional benefit of mobility and space management.
With notebooks now being available at sub-Rs 30,000 prices, they are increasingly finding their way into the homes and SMEs. High consumption in corporates, IT companies, financial institutes and the government, however, continues to drive the notebook consumption.
Commenting on the findings of the study, Vinnie Mehta, executive director, MAIT said, "With steady growth in IT consumption across households, SMEs and smaller cities, it is imperative that the IT industry build knowledge, competence and solutions to address the growing requirements of such markets. In order to sustain the interest of consumers in IT, there is a need to enhance the value proposition of IT compared to other avenues of lucrative returns."
"Towards this end, MAIT has launched Digital LifeStyle, a series of IT events - exhibitions and seminars to be held in smaller towns and cities across the country targeting the end consumers. To begin with, the event will be held in at least ten towns and cities in 2006," he added.
