Indian notebook sales are moving at a scorching pace -- 73 per cent year-on-year in the first quarter of 2007 -- and this is affecting the volume growth in the IT peripherals market, especially for products such as keyboards, mice, webcam and speakers.

The notebook PC segment -- which has the monitor, keyboard, mice and speaker built in it as a single unit -- is expected to grow further, and corner 40 per cent of the overall client PC (notebooks and desktops combined) market in the country by 2010.

Products such as printers, scanners and LCD monitors are also part of the IT peripherals market. However, their growth will not be affected as notebooks and desktops need these components.

The total hardware market in 2006 was $7164.1 million, according to International Data Corporation. Of this, IT peripherals accounted for $1,374 million and they are expected to grow at the rate of 12 per cent in the next five years.

The market for keyboards, mice and desktops is estimated to be a little over $300 million, and is expected to grow at 15 per cent till 2011.

Another factor affecting the growth of standalone keyboards, mice and speakers is that the growth of white box sales (assembled PCs) is almost stagnant, growing at 1-2 per cent year-on-year, according to Piyush Puskal, manager, computing products research, IDC India. Assemblers account for a major part of such IT peripherals.

Kurian Chandy, CEO, SES Technologies, said, "An increase in laptop sales will affect the volume of peripherals with respect to keyboards, mice and monitors to some extent. The industry might see a slight downfall in terms of units and value of single function devices, scanners, monitors, keyboard, mice and external HDD."

SES Technologies has a tie-up with Philips Electronics to distribute Philips products.

Diptarup Chakraborti, an analyst with Gartner, said there has been an overall drop in the growth of peripherals market but "there is an upgrade option."

"People are shifting from CRT monitors to TFT or LCD. The impact will be harder on third-party players than original equipment manufacturers who bundle everything," he said.

R Manikandan, business group head, IT division, LG Electronics, said, "The IT peripherals market in India is a derivative of the PC market. The industry is product-driven and hence one cannot generalise." According to him, the upgrade and replacement market is currently growing at the rate of 50 per cent.

"Vendors need to innovate to ensure that customers come back and use these products. "There are products such as wireless mice and keyboards which are getting the desired push, but the vendors have to be more innovative," said Pushkal.

Meanwhile, most peripheral makers are banking on high-end products such as printers and monitors.

The customised PC market is growing and consumers are shifting from CRT to LCD monitors, according to Samsung. The company is expecting a 100 per cent growth in the LCD segment. "LCDs will contribute around 45 per cent to the total sales," said a company spokesperson.