Peripherals

The best is yet to come

If you thought that last year witnessed the best as far as peripherals were concerned, just wait for FY 2008-09 to roll out the red carpet for the latest and newest computer peripherals. By Neeraj Gandhi

PC penetration has increased over the years and it has a direct correlation with peripherals shipments. The desktop and notebook market grew 20% year-on-year, with 6.5 million units shipped into the country in 2007, as compared with 5.4 million units in 2006, according IDC’s latest India quarterly PC tracker. The desktop PC market grew by 7% with 4.7 million units shipped in 2007 as against 4.4 million in 2006. As a result the peripherals market also witnessed considerable growth.

In 2007, the focus by and large was on SOHO, SMB and individual buyers that were responsible for the growth of the peripherals segment. Be it keyboards, mice, monitors, flash drives, Web cams, digital cameras, or even MP3 players, these devices have not only addressed the basic function that each performs, but also there has been a flood of new innovative products that fit in the style quotient as well.

Monitors: LCD is the way to go

The market for LCD monitors grew by leaps and bounds in 2007, especially the market for 17” and 21” models. According to the MAIT report, the market for 17” and 21” monitors increased by 28% and 53% respectively. Simultaneously sales of 14”and 15” LCD declined by 27%. Therefore, 17” actually became the de-facto standard in 2007, while 21” picked up steam.

“The decline in 15” LCDs and below was on predictable lines. In terms of volume, 17” monitors would drive the growth in FY 08 along with 19”. The market is expected to shift to wide monitors due to the manufacturers offering attractive pricing in wide monitors as compared to standard format monitors,” said Sanjay Dhuria, Head - MMPG, NEC India.

The boom in gaming, personal entertainment, increased use of multimedia applications and sliding prices contributed to this shift towards large screens. “LCD Monitors are becoming a lifestyle statement. With the prices becoming a lot more affordable, large screen monitors are becoming the norm,” said R Manikandan, Business group Head, IT Division, LG electronics India Pvt. Ltd.

“Computing has progressed from being PC centric to display centric. This made the consumption of big and wide monitors increase exponentially,” added Gautam Ghosh, Country Manager, ViewSonic Technologies India Pvt Ltd.

In contrast, the market for CRT monitors had its share of decline, particularly due to the narrowing price difference between LCDs and CRTs. Going forward, it is expected that the CRT monitors would continue to see negative growth and that the market would shift to LCDs.

Focus 2008-09

Exceptional progress in this market [LCD monitors] also helped the vendors register record-breaking growth. LG for instance posted a growth of 148% on LCD monitor volumes in 2007 over 2006. SME followed by Home/SOHO segment were the major contributors. ViewSonic on the other hand established itself as one of the top three brands in the segment and introduced 19” wide LCD monitors—the CASA series with DCR function. NEC India expects to close its FY 07 with 30% growth.

As for FY 2008-09, the expectations from the market are quite high. LG has set a growth target of 200% growth on LCD monitors. The company intends to cater to both B2C and B2B segments. ViewSonic has plans to further scale up its business operations in the country by establishing itself in tier II and tier III cities. It would appoint more partners from the B & C class cities to achieve this, and would also implement an integrated marketing strategy at the regional level.

Besides, NEC India plans to expand in the market for both professional and IT segment. It also intends to increase its presence in the medical monitor segment, and increase penetration in the public display area.

“Multi product functionality is being introduced in monitors, e.g. HDMI interface, media card reader (9 in 2 card reader) etc. Dell is also launching high resolution/specs up 24”, 27” monitors both of which are low halogen content and environmentally friendly,” said Nitin Bawankule, Director S & P, Dell India.

Ergonomic designs

According to the MAIT report, there was an increase of 2% in the sales of keyboards from April- September 2006 to April- September 2007. While in 2006 there were 25,49,158 keyboards sold, the year 2007 recorded sales of 26,05,425 keyboards.

Among the input peripherals though, wireless peripherals dominated the market last year. Diptarup Chakraborti, Principal Research Analyst, IT Research and Advisory Firm, Gartner Research India, said, “Wireless peripherals particularly the wireless mouse became the standard in 2007. Of the total new sales, 60% were wireless and 40% were wired peripherals.”

Vendors believe that wireless peripherals would continue to attract greater demand. “Wireless LAN (2.4 GHz) technology and Bluetooth are maturing and consequently becoming more affordable. Hence the market is going to see a real shift towards this. Laser technology was also introduced recently. It is expected that the market will shift substantially towards this by the end of this year,” said Sandeep Parasrampuria, Director, Best IT World.

Last year also saw a lot of ergonomically designed keyboards and mice being launched. Companies such as Microsoft Hardware and Logitech launched their ergonomically designed range to address the comfort factor keeping Repetitive Stress Injury (RSI) in mind. As of last year, the concept was rather new to the consumers and remained somewhat restricted to a particular section of the market.

“Ergonomic design forms a very small portion of the market and it is restricted to high-end desktop users. The adoption can be seen in large enterprises, but the medium and low end users are sticking to the normal designs,” said Chakraborti.

“If we compare with the past, the average selling price of all input devices have gone up, mainly due to an increase in retail focus and awareness regarding ergonomically designed input devices. The concept has slowly picked momentum in the replacement segment and with users working long hours on their PCs. Although in the mass market normal keyboards and mice remain dominant, the increased buying power of users is supporting these high end products,” added Suresh Pansari, MD, Rashi Peripherals Pvt Ltd.

That said vendors believe that the demand for these devices would pick up as more consumers become health conscious. “Consumers are getting savvier by the day and increasingly demanding features such as comfort, and convenience and are willing to pay a premium. We would continue to launch more products in this space,” said Subrotah Biswas, Country Manager, India & SAARC, Logitech.

“Work-related musculoskeletal disorders (MSDs) have become common among computer-users and one of the main causes of MSDs is repetitive motion. RSI is one such potentially debilitating condition resulting from overusing the hands to perform a repetitive task, such as typing, writing, or clicking a mouse. Our products for the coming year will be in line with ergonomic designs,” said Ashim Das Mathur, Marketing Head, Microsoft Hardware India.

Focus 2008-09

Vendors have set their targets and have laid down elaborative strategies to achieve them. “We plan to cross Rs 250 crores in revenue during 2008-09, and further plan to consolidate and strengthen our market position and market share in our existing 15 categories,” added Parasrampuria. According to Rajnesh Sinha, Business Manager- Computer Peripherals, Intex Technologies (India) Ltd., “We are targeting a growth of approximately 45%. Besides, we would also explore new potential areas (including B&C, SME, SOHO, etc). We are also concentrating on brand building initiatives like select print media advertising, participation in fairs, dealer meets etc.”

Logitech intends to diversify and would launch a range of digital lifestyle peripherals. “We would focus on emerging categories of home entertainment solutions and evolved gaming peripheral products. This would involve marketing initiatives including direct marketing to reach out to the potential customers,” said Biswas.

Projectors: ready to rumble

The projector market is warming up in India, and is expected to grow considerably. In terms of technology, both LCD & DLP are contributing to the overall growth of this market. LCoS based projectors address very small and niche markets with focus on higher resolution. Vendors such as NEC India, ViewSonic provide both DLP and LCD based projectors, while Dell provides only DLP based projectors.

“Based on industry estimation, the market size should be around 65,000-70,000 in the current FY, 2007-08. We are likely to see healthy growth in this segment. The current rate of import duties is hampering growth. If this product is brought under the IT product segment, where it actually belongs, the results can be much better for the industry,” said Dhuria.

Though the majority of the demand for projectors is coming from the commercial and institutional segments, even SOHO and home entertainment segments are becoming potential customers. NEC expects to close this financial year sales with 40% growth in numbers as compared to 2007. ViewSonic, which launched its range of projectors only mid 2007, saw demand coming from the enterprise and education segment.

“DLP is certainly driving the market and is expected to grow at 38% YoY. But we expect the LCD market to shrink and DLP to grow. DLP provides 2,000 lumens resolution at the entry-level (basic offering) compared to LCD. The future technology that we expect to grow over the next three to five years is DLP,” said Bawankule of Dell.

Focus 2008-09

“As per DTC Worldwide, India is expected to be amongst the top two countries in the Asia Pacific region to fuel projector growth,” said Ghosh of ViewSonic. The company is aiming at establishing its brand amongst the leading players of this segment.

NEC India on the other hand is targeting a growth of 40-45%. Besides targeting the educational segment to drive the volumes, the company would also focus on board room/conference room solution providers to push its professional install projectors in market.

Digital cameras enter the mainstream

The digital camera market saw some real aggression in 2007. The resolution kept on increasing, with 7 mega pixel becoming the standard in entry-level digicams, and the models became sleeker. So it was not just about resolution but also about style. “The Indian digital camera market growth was the highest in Asia and would continue to be so for the next few years,” said Alok Bharadwaj, Senior Vice President, Canon India.

Prices were also cut by a substantial margin, which led to an increase in sales. And as cameras with higher resolution become the norm, the prices of low resolution cameras are expected to go further down. But mega pixels are not the only driving factor of this market. The market has matured, and with customer becoming aware of the technology, other criteria like enhancement focus have also become important.

“In the digital camera space, the mega pixel war is getting old. Rather, developments are taking place in the image processing chips, image stabilizing/camera shake, enhancement of focus and exposure with technology such as face recognition/auto focus. Another significant change is the shift from tiny pocket size cameras to devices with better lenses, readable displays and manageable controls. So, it is expected that consumer cameras will be becoming more powerful this calendar year,” said George Van Der Merwe, COO, Sahara Computers.

The market is growing strongly and the customers are enjoying the digital photography experience. “We expect to see a large growth of the consumer durable segment to be driven by digital imaging products. More than 75% of all cameras that are sold today are digital and digital images are expected to account for 90% of all professionally taken photographs by 2010,” said Bharadwaj.

Flash drives: capacity matters

Flash based memory devices; particularly pen drives experienced substantial growth in 2007. According to Mediaman Infotech, sales of pen drives reached approximately one million pieces a month. In addition, even the flash based SD cards recorded sales of approximately 2.5 million pieces a month. “About 5% of the total sales of flash cards are being driven by digital cameras,” said Dushyant Mehta, MD & CEO Mediaman Infotech (P) Ltd. In addition, it is also expected that the demand for ultra mobile PCs would catapult the demand for flash based memory.

Growth in the pen drive market was largely driven by the overall growth in the computing industry. Coupled with this, pen drives also underwent a series of innovations almost throughout the last year. Embedded software, metallic outer frame, colored body, increased capacity, et al all were on display.

And if the vendors are to be believed, there’s still room for innovation. “Future flash drives are likely to offer even greater innovation including, integration into consumer lifestyle accessories like key chains, pens, pet collars etc. and will offer embedded applications. Enhanced security features such as biometrics would also be introduced. Additionally the capacity would continue to increase. Drives with improved throughputs (read/write speeds) will hit the market soon,” Nitin Malhotra, Country Manager, Kingston India.

“Today a 32 GB pen drive is available for Rs 6,000, and we see the cost coming down. In the next six months, a 80 GB pen drive will hit the market, with a price of less than Rs.10,000. I even see a 500 GB pen drive hitting the market by 2010. In fact, the continuous increase in the capacity is the only innovation that would act as a continuous growth driver of this market,” added Mehta.

Banking on this huge opportunity, Kingston is all geared up to target this market aggressively. “The flash drive market is growing at around 30% CAGR. We are targeting at least 100% growth over 2007 in this fiscal. To achieve this aggressive target, we will further enhance our presence across mobile, camera, laptop and other IT channel/retail outlets across tier I-II-III cities across India,” added Malhotra. The company particularly would focus on targeting the student community as it sees considerable demand coming from this segment.

The market for flash drives does not seem to be slowing down. Globally, the demand for flash based pen drives includes, pre-recorded flash, especially for distribution of software, gaming, and even music. Although there is no such trend in India, as the market picks up, pen drives could well emerge as the next big thing.

Web cams/ Mp3 Players: Don’t count them out

With features such as VoIP, chat, and social networking becoming popular by the day, the Webcam market saw increased demand particularly from the youth. “Web cameras are doing well amongst youths (students and people aged between 18-30), professionals, SOHO, Household sector, and SMBs – e.g. IT/ ITeS/ Telecom sectors,” said Sinha.

What was interesting to note was the introduction of high-resolution Web cams of the order 5.0 and 6.0 mega pixel.

As for the MP3 market, according to Rashi Peripherals, it grew more than 50% in 2007, with a reduction in prices providing the impetus and all brands witnessing an increase in sales. MP3 players have emerged as one of the top products used in personal gifting as well as in corporate gifting.

Overall the market conditions and growth will continue in the peripherals market in 2008 and the market will see even more interesting new products in the months to come.

neeraj.gandhi@expressindia.com