Signs of a Turnaround...

Finally, the wait is over–MAIT has made public the findings of its ‘Industry

Performance Review’ for the first half of 2002-03. The desktop PC market

grossed 9.5 lakh units registering a growth of 18% over the same period in the

previous year and a growth of 10% compared to the second half of 2001-02. With

the buying sentiment in the market now improving, MAIT has revised its PC sales

projections for FY 2002-03 from earlier 15% to 20%, PC Sales are expected to

cross 2 million units. Fiscal 2001-02 had recorded 1.67 million units of PC

sales.

The turnaround in PC sales can be attributed, on one hand, to increased

consumption by industry verticals such as telecom, banking and financial

services, manufacturing and IT-enabled services. Major e-governance and digital

divide initiatives of the central and state governments are also driving IT

consumption in the country. On the other hand, the domestic IT industry has

focused attention on producing and developing low-cost computing solutions.

Further, the trend of increased PC purchase in smaller towns and cities,

witnessed last year, continues undiminished.

The Assembled PCs–the smaller lesser-known regional brands and unbranded

systems, accounted for 48% of the PC sales in H1/2002-03. The proportion of the

assembled PC sales grew from 44% in the same period, the previous year. The

Indian brands accounted for 22% of the market. However, the MNC brands

registered a fall in their marketshare from earlier 36% in the first half of

2001-02, to 30%–registering a decline 1% in absolute sales.

The MAIT-IMRB Review reveals that PC sales to the Business segment improved

by 24% but to the Households it declined by 1% as compared to the sales in the

first half of the last year. The Business Segment continued to account for 82%

of the market. In terms of the Processor configuration, PC sales in H1/ 2002-03

were dominated by Intel P-4, which accounted for 51% of the marketshare,

followed by P-III accounting for 36%. AMD, Cyrix, and other processors accounted

for another 10%. Overall Printer sales, according to MAIT-IMRB estimates,

dropped by 3% compared to that in H1/2001-02. One of the most notable findings

of the study this year has been the sustained and increased consumption of IT

products in smaller towns. 36% of total PC sales was accounted for by Class B

and C class cities–a growth of 30% over H1/2001-02 and 56% over H2/2001-02.

Likewise, in the First-half of 2002-03, notebooks sales grew by 139% in small

towns, whereas, sales to Top 4 cities declined by 13%.

Commenting on the findings of the study, Vinnie Mehta, Executive Director

MAIT said, "While the mood in the industry is upbeat today, it is necessary

to achieve global volumes and scales for the Indian IT industry to be

internationally competitive in the long term. To ensure that IT reaches the

grassroots level in India, there is a pressing need to bring down the prices of

IT products. MAIT has a single point agenda for the forthcoming Union Budget–reduction

in Excise duty to 8% (or 6% if the Government adopts the Excise duty structure

as recommended by the Kelkar Committee) from existing 16%." He further

added, "IT manufacturing in India is faced with several disability factors

that adds to almost 16 to 20%, a significant proportion, of the manufacturing

cost. These can only be overcome by a progressive policy that can help reduce

the transaction costs through simplified procedures."

TEAM DQ