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High volumes, low margins rule the Indian PC
market in 2003: Gartner
Economic growth and strong offerings from
assemblers will be the leading demand drivers for the PC market
in India in 2003, according to the latest report from Dataquest
Inc, a unit of Gartner. Gartner has forecasted PC shipments to increase
18 percent in 2003 following the 12 percent growth seen in 2002.The
report titled ‘India: PC Market Outlook, 2003’ cited the
following five key demand drivers for the PC market in 2003:
Professional Market
- Mobile PCs: As the technology gap between
desktop PCs and mobile PCs narrows, and prices continue to drop;
the demand for mobile PCs is expected to grow significantly.
- Economic recovery: Although not impacted
as severely as other countries, India has had its share of worries
because of the global economic slowdown. Recent positive trends
indicate that organisations are easing restrictions on IT budgets.
This will result in increased PC uptake in the corporate segment.
- SMB growth: Due to the significant number
of small and medium businesses (SMB) in India and since most SMBs
are under-utilising technology, uptake in this segment is expected
to grow and boost PC sales in the coming year.
Private Market
- Education: Mobile adoption in the home
segment is yet to make a mark, so desktops will be the prime area
of consumption. This will initially drive demand in metropolitan
areas, as families purchase desktops for their children to fulfill
academic requirements. Most of these will be first-time users.
Strong white-box
offerings
Price and personalised service are the strengths of the white-box
segment, compared to the branded players, and this trend seems to
be gathering steam. The middle class is heavily drawn to these vendors.
It will be increasingly difficult for branded vendors to compete
with the white-box segment unless they augment their service capabilities
to significantly differentiate themselves. “India has a lot
to offer in terms of demand but a low GDP per capita means that
margins will be tight. Although the forecast is for strong volume
growth in 2003, margins will be stretched” said Vinod Nair,
research analyst with Gartner, India. Local white-box assemblers
have a strong hold on the Indian market with 66 percent of total
PCs being sold by them.
The report says that vendors must determine
the optimal price/performance/service mix in order to build the
brand with a solid product offering whilst also maintaining competitive
price levels.
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