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Festive season brings cheer to PC makers

By Pradeesh Chandran & Bibhu Ranjan Mishra in Bangalore
January 05, 2011 13:10 IST
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The Indian PC market is all set to witness double digit growth in 2010. Backed by increasing demand from the consumer segment, major PC vendors like Dell, HCL, Lenovo and Acer expect a surge in sales, especially during the festive season.

According to market analysts, the PC shipment for the July to September period had seen a significant growth, driven by the expected demand for laptops and desktops during the festive season.

During the same period, consumer PC sales continued to rise as a proportion of the overall India PC shipments.

According to market intelligence firm IDC, India PC market sales touched 2.79 million units during the July-September 2010 quarter, recording a 27 per cent year-on-year growth as against the same period last year. The market grew 18 per cent sequentially. The results for the quarter will be formally declared in March.

Desktop PC sales accounted for nearly 60 per cent of the total PC sales at 1.67 million units. The sales of notebook computers grew 52 per cent year-on-year to cross 1.11 million units for the quarter.

"The July-September quarter shows a growth driven by festive season and demand from the consumer segment. The double-digit growth in PC sales fuelled by consumer demand points to the strength of the economic recovery," said Sumanta Mukherjee, lead PC Analyst, IDC India. The increase in consumer demand can be attributed to the launch of multi-colour models and discounted bundling schemes he added.

Another reason for the jump in demand in the personal computer segment was the various festive season offers extended by retailers and PC makers. Acer announced a contest wherein the winner would get a Harley-Davidson bike. Similarly, Lenovo also offered free goodies like a digital camera, hi-end gaming multimedia headset, wireless optical mouse on purchase of its particular model between December 15 and December 31.

"During the festive season we witnessed a rise in demand of over 65 per cent. The growth is driven fundamentally by the large format retailers. In 2009 our overall growth was muted. During the last six months our overall sales have, however, risen 22-23 per cent," said S Rajendran, Chief Marketing Officer, Acer India.

According to the number one PC vendor in India, Dell, the consumer and SME segment will drive growth of the company in India. "The consumer segment is the major growth driver for us and we believe in 2011also, consumer and SME will be the driver," said a company spokesperson.

With the rising consumer demand, large retail chains, too, are witnessing a growth in sales. "The overall trend in sales of IT category is positive. We have witnessed a huge jump in sales largely due to clear consumer benefits through cash back and product offers," said Ajit Joshi, MD & CEO, Infiniti Retail Ltd, a 100 per cent subsidiary of Tata Son.

Another retailer, Next Retail India, said the overall electronic equipment sales witnessed a growth of 34 per cent. "We see a spike in the sale of electronic equipment during the festive season compared to other period of the year. During this season we saw an increase of 15-20 per cent in our computer sales, including desktops and laptop," said Sunil Mehta CEO Next Retail India Ltd.

Going forward, PC vendors believe that consumer segment will be the biggest driver for growth in India followed by segments like education and government. Given that PC penetration in India is quite low, experts believe the growth of notebook PCs in 2011 will accelerate to 42 per cent, leading to an overall growth of 22 per cent in terms of unit sales year-on-year.

The adoption of a notebook PC as the first PC is likely to show growth in 2011. Experts also see that the roll out of 3G services in 2011 will act as a catalyst for the growth of mobile computing devices in India.

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Pradeesh Chandran & Bibhu Ranjan Mishra in Bangalore
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