Press Release
PC
sales cross 7.3 million units growing 16%; Internet users exceed 52 million in
2007-08
New
Delhi; July 08, 2008: MAIT, the apex body representing India's IT
hardware, training and R&D services sectors, today announced the findings of
its Industry Performance Review for fiscal 2007-08. The total PC sales between
April 2007 and March 2008, with desktop computers and notebooks taken together,
were 7.34 million (73.4 lakh) units, registering a growth of 16 per cent over
the previous year. IT consumption in 2007-08 was led by significant growth in
notebook sales, which grew by 114 per cent, while purchases of desktop units
grew by only a percentage. Western and Southern India recorded maximum growth in
PC consumption at thirty–nine per cent each. PC sales are projected to touch
8.5 million (85 lakh) units in fiscal 2008-09.
Commenting
on the findings of the study, MAIT Executive
Director, Mr Vinnie Mehta said: "Notebook consumption has driven the PC market
in India in 2007-08. With sales crossing a million units in the second-half of
last fiscal, total sales of notebooks in 2007-08 surpassed 1.8 million (18 lakh)
units growing one-hundred-fourteen per cent over the last year. Today, notebooks
account for a quarter of the total PC market in the country, up from less than
three per cent four years ago. With shifting consumer-preference in favour of
notebooks over the desktop, this proportion will only get larger with time."
He
further added, "Although the sales to the large enterprises were less than
expected, the overall consumption in the PC market was led by telecom, banking
and financial service sectors, education and BPO/IT-enabled services, and the
e-governance initiatives of the Union and the state governments. The southward
trend in pricing for all IT products continued during the year due to technology
reasons and also due to intense competition. Significant growth in the home
market and steady consumption in the small and medium enterprises sustained the
market in 2007-08."
Western
India followed by the south led PC consumption accounting for thirty-one per
cent and twenty-seven per cent of the market respectively. Sales in both the
West and the South grew by thirty-nine per cent each over 2006-07. PC
consumption in the east increased by ten per cent accounting for seventeen per
cent of the market, a reflection of heightened IT activities in the region. The
northern states witnessed a decline of thirteen per cent in PC sales, they
accounted for 25 per cent of the market.
The
bi-annual MAIT Industry Performance Review – ITOPs, conducted by India's
leading market research firm IMRB International is a survey of the domestic IT
market, its potential and trends. This round of the study involved
face-to-face interviews with over twenty-five thousand respondents selected
randomly across twenty-two cities in India. The MAIT-IMRB study was initiated in
1996-97 and encompasses five broad product segments — computers, networking
products, printers, other peripherals and Internet connections. Apart from the
half-yearly review, a supply-side estimation module has also been introduced to
monitor industry performance every quarter, alternating with the half-yearly
review.
Emphasising the need for robust internet infrastructure to boost the domestic IT market, MAIT President, Mr Mukul Singhal added: "While the prices of PCs and other access devices in India are one of the lowest in the world, to sustain the domestic IT market, we need to strengthen our broadband infrastructure at a rapid pace. This calls for an early resolution of the last mile and spectrum allocation issues, without which we cannot have a virtuous cycle for domestic IT consumption. A robust broadband will usher in a slew of services, relevant applications as also content in local languages which will create the necessary pull-factor and further drive the IT products market."
The
Notebooks Market:
The proportion of notebooks in the overall PC sales is fast increasing as these become affordable. Accounting for over twenty-five per cent of the total PC market in 2007-08, notebook sales recorded a high growth of one-hundred-fourteen per cent taking the CAGR (six-year time period) to one-hundred-four per cent. Consumption of notebooks was driven by reasons of affordability, mobility, sleek designs, enhanced security features and other in-built accessories. Focussed marketing initiatives by the vendors and celebrity endorsements have also contributed to increased notebooks consumption in the country. The establishments segment as well as the households witnessed healthy growth in notebook sales.
The establishment segment witnessed a growth of ninety-three per cent over the last year. Towns and cities outside the top four metros contributed to nearly 80% of the notebook sales in the establishment segment. The small and medium establishments recorded significant growth in 2007-08 at one-hundred-seventy-four per cent and one-hundred-twenty-three per cent respectively over 2006-07. The SMEs accounted for over fifty per cent of the total notebooks consumption in the country. Consumption in the large establishments grew by fifty-one per cent.
The household
segment, accounting for forty-four per cent of the overall notebook
sales in the country, registered an impressive growth of one-hundred-fifty
per cent in the last fiscal. The SEC A and SEC B households, together,
contributed to over ninety per cent of the notebook sales in the household
segment. Notebooks have also started to make rapid inroads into the SEC C as
well.
The
Desktops Market:
Organised vs. unorganised segments: Multinational brands accounted for forty-five per cent of the total desktop market in 2007-08, registering a growth of sixteen per cent over the thirty-nine per cent share last year. The proportion of Indian brands fell from twenty-three per cent to twenty-two per cent; registering a decline of four per cent. Assembled desktops and unbranded systems witnessed a de-growth of over twelve per cent in absolute units accounting for thirty-three per cent of total desktop sales in 2007-08, last year their share was thirty-eight per cent.
The establishments segment accounted for sixty per cent of the desktop sales, registering a decline of eighteen per cent on a year-on-year basis. Owing to shifting preference for mobile form-factor, large establishments and office locations recorded a decline of thirty-three per cent and twenty-one per cent respectively. The consumption in small and medium enterprises continued to grow at twenty-five per cent and eight per cent respectively.
Household consumption of desktops grew by fifty-five per cent, accounting for forty per cent of the total desktop market, with sales crossing 2.18 million (21.8 lakh) units. Within the Households segment, SEC A continued to dominate the market with a forty-three per cent market share; growing fifty per cent. SEC B accounted for thirty-nine per cent market share with sixty-eight per cent growth while SEC C registered a forty-three per cent growth with eighteen per cent of the market.
Market segmentation by processor sales: Desktop consumption in 2007-08 was dominated by P4 based units, which accounted for fifty-two per cent of total sales, however, the market was quick to adopt other next generation processors such as Core-duo; Core2duo and Core2quad accounting for six per cent, eight per cent and a per cent of the market respectively. Other processors like the AMD, Cyrix etc. accounted for fourteen per cent of the market.
Market
segmentation by town-class: Consumption of desktops in towns and cities
outside the top four metros has been progressively increasing over the years. In
2007-08, these accounted for more than three-quarters of the total desktops
purchased with a fourteen per cent growth. The top four metros accounted for
only twenty-three per cent of the total desktop market with a twenty-eight per
cent decline in consumption.
The Server Market:
Sales of servers, driven by high consumption in small and medium enterprises registered a growth of thirty-five per cent, making for a CAGR of seventeen per cent. With the market more than doubling, small and medium enterprises accounted for seventy-four per cent of the server. Towns and cities outside the top four metros accounted for seventy-eight per cent of the server market with sixty-four per cent growth over the last fiscal.
The
Internet entities:
The number of active Internet entities increased to 7.2 million (72 lakh) subscriptions by March 2008, while the figure was 6.0 million (60 lakh) units in March 2007. With this the internet users exceeds fifty-two million. Internet penetration by entities in the top twenty-two cities was forty-six per cent among businesses and twenty-one per cent among households. The businesses segment now accounts for twenty-nine per cent of the total active Internet entities and households account for the remaining seventy-one per cent.
DSL/cable remains the most commonly used means of Internet connectivity among businesses: forty-three per cent of businesses were found to use DSL/cable, sixteen per cent dial-up connections, seven per cent leased-line, twelve per cent used data cards, two per cent used VSAT while eighteen per cent ISDN services.
SEC- Socio Economic Class
CAGR - Compound Annual Growth Rate
Top four cities/Metros/Class A cities – Delhi, Mumbai, Chennai, Kolkata
Next four cities – Bangalore, Hyderabad, Ahmedabad, Pune
Internet
entities – Entities are establishments/individuals with Internet connection;
an entity could house multiple users.
About
the study:
ITOPS
is a syndicated end-user based study on the IT hardware market conducted by the
eTechnology Group of IMRB International. ITOPS has been an annual exercise since
1996-97 and for the last five years the study has been conducted on a bi-annual
basis, as well. The study is based on over 24,600 face-to-face interviews with
end-users spread over 22 cities, with data projected to the 'all India urban
market'.
The
MAIT-IMRB study involves data collection after the 'last mile' that the product
travels, i.e. from the premise where the product is finally installed. It is
therefore an accurate estimate of 'what' was bought, 'by whom', and for 'what
purpose'. Since the MAIT-IMRB study is based entirely on data collected from
'users', it is able to accurately estimate the large unorganised market as well
as direct imports. It does not suffer from shortcomings of estimates based on
shipment or supply which in addition to under or over-counting, may also reflect
biases in perception of vendors and resellers.
With
twelve consecutive years of ITOPS data, the study is now able to closely track
emerging segments such as small offices, home users, first time buyers, etc. and
identify the role of key drivers for purchase such as the internet. By virtue of
tracking the installed base built over the years, and monitoring the extent of
upgradation/ replacements taking place in the market, the study has been able to
identify emerging business opportunities that promise to expand the market for
IT products in India.
About
MAIT:
Set up in 1982 for purposes of scientific, educational and IT industry promotion, MAIT has emerged as an effective, influential and dynamic organisation. Representing IT hardware, training, R&D, and associated services in India, MAIT’s charter is to develop a globally competitive Indian IT Industry, promote the usage of IT in India, strengthen the role of IT in national economic development and promote business through international alliances.