The PC business continued to be the highest growth area for most vendors, particularly the consumer category. There was a clear-cut acceleration in the sale of notebooks, bringing good news for most distributors. There was a clear shift from assembled to branded PCs in the addressable market. There was excellent growth on the Unix hardware and software front.

Growth Drivers
The challenge last year was the component business. Business slowed down due to branded PCs growing better than assembled ones. There was good demand for enterprise products and solutions in large corporate and government space with an accelerated growth in demand for notebooks. CRT monitors started giving way to LCDs in a big way, and there was excellent growth in demand for multifunction devices in the printing segment. This was on account of declining costs of LCD products from all vendors.

Some technologies and products that were considered passe by industry pundits, are back in the distribution supply chain. Thin client products is one of them. The fall in prices of flash memory accompanied by the growth of mobile products resulted in explosive growth in this segment.

Going Deeper
Most of the distributors aggressively expanded their footprint to reach out to the tier-2 and tier-3 cities. Ingram Micro witnessed significant increase in its share of business coming from these cities, particularly in the PC market. The expansion of channel players in tier-2 and tier-3 cities contributed significantly to the growth of the consumer PC business. Manufacturers are also reaching out to these cities. In an effort to expand its footprint across the country, Iris set up nine new branch offices in IndiaBhubaneswar, Cochin, Coimbatore, Goa, Guwahati, Jaipur, Jammu, Ludhiana, and Surat.

Players Progress
Ingram Micro retained its #1position for yet another year. This was a first full year after the merger of Ingram Micro and Tech Pacific. It added some new lines of business to its overall portfolio, which included point of sales devices and thin clients. Maximum growth for Ingram Micro during 2006-07 was from the PC business. In the year, it added LG as its new vendor. Storage became a more active part of Ingrams overall portfolio during the year. Other growth areas during the year were Unix hardware and software products. The peripherals business also grew steadily. Ingrams share of business from non-metro market increased significantly. It also established relationships with large retailers, but the business from this segment was insignificant, as the number of stores opened were less than expected.

The year saw Redington entering into the capital market with its IPO listing in January 2007 and raising Rs 150 crore. It continued with its strategy of getting into higher value businesses. Its services arm got a tech support contract from headset major, Plantronics.

DQ had reported about the meteoric rise of eSys in last years DQ Top 20. This rise continued this year too, with eSys signing an agreement with Teledata Informatics for a strategic investment of up to SGD160 mn in the company. This investment is likely to help eSys consolidate its position in the IT distribution space and move into the big league with Ingram Micro and Redington. Though this investment changes the overall portfolio of offerings by eSys, the restructuring exercise might take a toll on the companys stability.

In terms of its distribution business last year, eSys managed to rope in Turbolinux to enhance its offering of Linux based Operating systems and Applications. IBM designated eSys India as the Best Distribution Partner for volume business of X Series Server.

HCL Infosystemss revenue grew exponentially by 87% largely due to the new distribution pacts it had with some of the leading names in the industry. In personal and home electronics, it tied up with Casio for digicams, and Apple for iPods. It also distributes Toshiba laptops. It forayed into DTH distribution with DishTV. Another highlight was HCL adding eight more Digilife stores across the country, taking the total to 29.

Savex expanded its HP portfolio from selling only Presario to the entire range of consumer PCs including Champion and Pavilion. Similarly, Samsungs product also saw good growth due to increase in TFT-LCD sales. It tied up with large-format retail stories like Ezone and Croma. Neoteric made its foray into the corporate channel last year. It also increased its focus on enterprise and SMB with increased focus on tapping retail business and verticals like LFRs, CE segment, IT, and Telecom.

Page(s)   1  2