Indian PC Market on the Upswing

India's PC market will grow by 7 percent to over 7.3 million in the Indian fiscal year to March 31, 2010, the Manufacturers Association of Information Technology (MAIT), an industry body, said on Thursday.

The upbeat forecast by MAIT reflects an overall improvement in purchases by both consumers and businesses in the country.

Gartner expects PC sales in India to grow by 19 percent to 10.5 million in the current calendar year. Sales were down last year by 1.2 per cent.

As companies have started hiring more staff, there is a need for more PCs, said Diptarup Chakraborti, principal research analyst at Gartner. Businesses, particularly medium-size businesses, are investing in improving their IT infrastructure, after a freeze in expenditure last year.

A large number of businesses that had delayed the replacement of obsolete PCs are buying new PCs this year, Chakraborti said.

Total PC sales in the first half of the fiscal year, between April and September 2009, were 3.71 million, registering a growth of one percent over the same period in the previous fiscal year, according to MAIT.

While desktop shipments declined by 11 percent to 2.61 million during the period, sales of laptop computers were up by 43 percent to 1.1 million.

Sectors such as BPO (business process outsourcing) service providers, retail and the government, which traditionally account for a significant proportion of the IT market, were very conservative in their IT spending in the first half of the fiscal year, MAIT said.

Some of these segments have already started making significant investments in IT this year, Chakraborti said.

Vendors of branded PCs are likely to find reason for cheer in the declining share of unbranded desktop PCs. Sales of unbranded desktop PCs were down by 38 percent in the first half, and as a result the share of unbranded desktop PCs dropped to 26 percent of the desktop market, MAIT said. Unbranded products do not figure significantly in laptop sales.

A return to strong double-digit growth is likely only in the third quarter of the current calendar year, research firm IDC India said in December.

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