No Impact Of Economic Slowdown On IT: IDC India

IDC's Industry Performance Index (IPI) shows that the Indian IT industry continues unabated on its growth path. The index, based on IDC's India IT tracking programs, reveals that in the first six months of the current fiscal (April-September 2000), almost all IT product categories witnessed great growth. This vindicates IDC's earlier stand that there is tremendous buoyancy in the Indian IT industry and it will not be impacted by the minor slowdown that the economy is currently facing.

In the first six months of the current fiscal the Industry Performance Index has grown to 159.5, which represents a jump of more than 35 points over the preceding six months. This highlights the fact that the performance of the industry is improving significantly between two successive periods.

Personal computers

Personal computers represent not only the largest component of the IT industry, they are also one of the fastest growing product categories. Although component shortage and currency devaluation kept the average sales value (ASV) of PCs on the higher side, it could not arrest the tremendous momentum that existed in the market.

IDC estimates that in the first half of 2000-01, more than 8.5 lakh (0.85 million) PCs were shipped. Of these, approximately one third found their way into homes. The home segment has been consistently growing above the overall average, which is pushing the share of this segment up.

Shipments of commercial desktops shot up by almost 58 percent in first half of 2000-01 as compared to the same period of last year, sales of notebook computers, which move primarily into the commercial segment, grew by 68 percent in unit terms.

Servers and workstations

The first half of 2000-01 has been particularly good for servers as well. While Standard Intel Architecture Servers (SIAS, earlier called PC Servers) contributed the maximum to the total server market and grew by over 30 percent in value terms. The growth was driven by the non-SIAS segment, where the value jump was to the tune of 57 percent. 

The workstations market does not echo the same sentiment as the server market. Being a niche product, the growth in this segment has been somewhat limited. Traditional workstations (RISC/ Unix) are increasingly being threatened by Intel-based personal workstations. As a result, the market for traditional workstations has been declining over the years.

In the first half of 2000-01, personal workstations grew by as much as 167 percent, while traditional workstations declined by 19 percent as compared to the same period of 1999-00.

LAN hardware

LAN hardware market also did very well in the first half of 2000-01, notching up a growth of 65 percent over the same period of previous year. A strong growth in demand for switches and routers was the prime reason for this solid growth. Apart from a strong demand from the ISP segment, software exporters also bought large amounts of LAN hardware. 



In addition, call center business is also booming in India, thereby adding to the demand for LAN hardware.

Peripherals

Perhaps the largest beneficiary of the boom in the computing products market has been the peripherals industry. Apart from peripherals bundled with computing products, there is also a substantial after-market for peripherals like hard disk drives and monitors. The need to upgrade the PCs in the installed base is the prime reason for higher growth rates for peripherals than computing products.

The market for monitors crossed the million-unit mark in the first half, representing a growth of almost 44 percent in unit terms. The growth in value terms was much higher as the market made a sudden transition towards wider monitors. The share of monitors with screen size of 15 inches or above shot up from around 23 percent in the first half 1999-00 to a substantial 49 percent in the same period of the current fiscal.

Printer

The printer market has been witnessing a flurry of activity as competition intensifies, especially in the rapidly growing inkjet category. Price and promotion are the main factors that differentiate the winners from the also-rans. 

Despite a heady growth in the PC arena, the growth in the printer market has been limited by the fact that increased adoption of network printing in the business segment is forcing the printer-to-PC shipment ratio to move southward.

Although the growth in the printer market pales in comparison with that in the PC market, it stands at a fairly respectable level in absolute terms.

Inkjet printers have now become the technology of choice for most segments. Nevertheless, the demise of dot matrix printers is still very distant.