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PC mart up 32% in 2003; IT exports rise 30%

Last updated on: February 18, 2004 16:36 IST

India's software exports grew 30 per cent in 2003 to touch $10.4 billion, with IT enabled services contributing one-third of this revenue at $3.4 billion with a growth rate of 71 per cent, according to IT consultancy firm Skoch Consultancy.

Showing the uptrend, the country's personal computer market also grew by 32 per cent shipping 2.3 million PCs in 2003, fuelled by a sharp fall in prices, Skoch's IT market analysis report 'Browser 2003' said.

Despite the perceived trade barriers existing in the traditional US market, an expected surge was seen in the software exports category as software export revenues touched $10.4 billion, Sameer Kochhar, CEO, Skoch said.

BPO contributed one-third of the export revenue at $3.4 billion with a growth of 71 per cent.

The total IT industry revenue went up by 23 per cent in dollar terms to $16.4 billion during the year and 21 per cent in rupee terms to Rs 75,547 crore (Rs 755.47 billion). Domestic market grew 18 per cent.

The IT industry is estimated to have contributed three per cent to the GDP, the report said.

In its forecast for the PC market, Kochhar said in 2004 there would be a 50 per cent growth in units shipments with about 1.2 million additional PCs taking the total volume to 3.5 million units.

With the average unit price of a PC coming down to Rs 38,390 from Rs 51,580 in 1997, the report said the major gainers were domestic vendors like HCL and Zenith as they together expanded their presence in the PC market by three per cent.

Predicting that India would be a market of 10 million PCs in 2008, Skoch said with the introduction of sub-$1,000 Notebook computers, the Notebook sales registered an unprecedented 78 per cent growth to sell 87,499 units.

The report said that with the marketing strategies of the organised PC players not in place, they would not be able to fully grab the boom time PC sales.

A good part of the additional opportunity will go to the unorganised market though its total marketshare would fall from the current 57 per cent because of the price cuts offered by the organised players.

The market would continue to be fragmented with the unorganised players thriving on 'gizmos' with their present PC market share more than the collective share of Indian brands with 20 per cent and MNC brands with 23 per cent.

The report mentioned that an additional investment of Rs 13,500 crore (Rs 135 billion) was expected to be made by 2005. For software exports, a total of Rs 18,000 crore (Rs 180 billion) were invested in 1992-2002 out of which Rs 8,200 crore (Rs 82 billion) were spent on technology and equipment.

The manpower shortage, according to the report, would be one million by 2008, Skoch report said.

Expressing concern over the rising piracy in the software sector, it said while the operating system piracy is 70 per cent, in case of application software, it stands at over 75 per cent.

Total Packages software market went up marginally 12 per cent to touch Rs 2,016 crore (Rs 20.16 billion), while that of enterprise software applications dropped by 4.5 per cent to Rs 245 crore (Rs 2.45 billion).

Computer training market remained stagnant at Rs 1,200 crore (Rs 12 billion) but segments like consultancy, customised software and development, systems integration gained 19 per cent to touch Rs 8,420 crore (Rs 84.20 billion), it said.

Since affordability remains a crucial factor, Linux would get more popular with the users. In 2003, networking emerged as another high growth area with a sales revenue of Rs 2,368 crore (Rs 23.68 billion), a 28 per cent rise.

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