The buoyant IT consump-tion witnessed in FY 2002-03 continued in Q1 2003-04 as well, according to MAIT’s quarterly industry performance review.

The desktop PC market grossed 6.4 lakh units in Q1 2003-04 - a growth of 26% over Q1 2002-03. The sales in the first-half of FY 2003-04 are expected to cross 14.2 lakh units. The earlier projection of 12.1 lakh units in sales for H1 2003-04 has been revised upwards in light of the positive business sentiment in the market.

MAIT is forecasting 18% growth in the IT market for the FY 2003-04. PC sales for this period are expected to cross 2.7 million units.

FACTORS DRIVING GROWTH
The growth in PC sales can be largely attributed to increased IT consumption by industry verticals and corporate sectors such as telecom, banking and financial services, manufacturing and IT-enabled services. Apart from these traditional sectors, higher consumption was also witnessed in SMEs, IT training institutes, and computer-centric small enterprises who took up data entry/DTP jobs.

Growing number of retail outlets and malls have also added to the PC consumption. Major e-Governance and digital divide initiatives of the Central and State Governments are also driving IT consumption in the country. In addition, the trend of increased PC purchase in smaller towns and cities, witnessed last year, continued steadfast. Aggressive pricing by the vendors has also helped improve the PC penetration, especially, in the households and the SME segments.

SALE IN SMALL TOWNS SURGES
The increased consumption of IT products witnessed in FY 2002-03 in smaller towns and cities continued unabated in the first quarter of 2003-04. Smaller towns accounted for 37% of the total PC sales while the top 4 cities accounted for 46%.

The next four cities accounted for 17%.

Similarly smaller towns registered impressive consumption in other product categories as well: They accounted for 17% of notebook; 52% of dot-matrix printer; 31% of inkjet printer; 19% of laser printer and 30% of UPS sales.

ASSEMBLED PCs BOUNCE BACK
As per the MAIT-IMRB study the assembled PCs accounted for 65% of the PC sales in Q1 2003-04. The proportion of the assembled PC had risen significantly to 63% in Q3(OND) 2002-03. However, this was checked by increased consumption in the corporates from the organized sector in Q4(JFM), more than neutralizing the impact and bringing the annual market share of assembled PCs to 46%. But once again in Q1 2003-04 the assembled PC market managed to garner a significant market.

MNC brands accounted for 19% of the market, while the Indian brands accounted for the rest 16%.

PRODUCT-WISE FINDINGS
The findings of the MAIT-IMRB quarterly study for Q1 2003-04 lend themselves to identifying significant trends in buying and usage patterns.

In the first quarter of 2003-04, the desktop PCs, notebooks, dot matrix printers, laser printers, inkjet printers and UPS have registered sales of close to 60% of their sales during the first half of 2002-03. Given the fact that the second quarter (July-August-September) is normally a better quarter than the first (April-May-June), the market is clearly on a growth track.

PCs
In the corporate segment, it was primarily the banks, financial institutions, insurance companies, educational institutes, government purchases, IT sector and IT related companies, that provided the growth momentum to the hardware manufactures and vendors.

In the household segment, reduced prices coupled with applications for ´entertainment´ and ´education´ have fueled the market. Self-employed professionals such as architects and freelance graphic designers appear to be now more receptive to investing in PCs than before.

NOTEBOOKS
Notebook sales are still largely confined to business/establishment market and hence these segments drive the current and would also the future demand. Corporate offices, IT companies, financial institutes and now also the Government have emerged as the most sought after markets for notebooks. Households are yet to emerge as a major market.

SERVERS
Server market, predictably, has been restricted to the corporate segment. However, with more corporate entities undertaking IT initiatives for computerization and networking the future market for servers look healthy.

PRINTERS
The dot-matrix printer market witnessed rapid replacement by inkjet printers. The growth in demand for inkjet printers was led by increased consumption in the home market, smaller offices and institutions. The replacement market for laser printers witnessed growth especially in the business establishments, due to requirements of higher printing capability and better quality.

Vinnie Mehta, Executive Director, MAIT says, “The growing proportion of the assembled PC market is of immense concern to us. The recent draft policy for the IT manufacturing industry formulated by the Ministry of Communications and IT is indeed a step in the right direction.”

According to him, the policy aims to set right the existing anomalies in the duty structure, incentivizing IT manufacturing and growing the domestic market.

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