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devices like laptops, netbooks, and tablets seem to have eaten much
into the share of the bulky traditional mode of the Personal Computer
(PC) dominating the Indian scenario just a decade ago, though
desktops still hold an estimated 6 mn share (in terms of units) in
the gigantic 10 mn (units) size of the Indian IT market (source:
IDC). Although the total unit in terms of shipment is much higher,
estimated at around 14 mn units last calender year, the actual market
continues to remain pretty low. The change is quite phenomenal
considering the rapid shift of the Indian consumers towards mobility
with 'branded PCs and laptops' gaining huge market share in a
very short time span. Just about 4 years ago, the assembled PC market
was estimated to be around 57.5% of the overall desktop market.
Considering the replacement market figures, another 18% could be
added to the overall figure making assembled PCs feature at 24.5% of
the total desktop market share.
the early 2000s, 'branded desktops' hardly accounted for much of
a share with consumers preferring to opt for building their own PC
in accordance to their own preferences and needs. At that time, the
market condition was ripe for the retailers and assemblers who did a
brisk business. Besides, branded players like LG, decided to quit the
desktop business altogether during the era of the assemblers as it
could hardly harness any market share or strike major deals. Since
then, India seems to have come a long way with the then 'major
assemblers' themselves now focusing over selling branded PCs. The
assembled PC market has taken a steep decline finally giving up to
the 'branding efforts' put up by the likes of HCL, HP, Dell,
Lenovo, and others amidst the backdrop of the rising prices and
peripherals. The growth percentage seems promising and the market
share of both desktops and assembled PCs have fallen drastically over
the last 3 years, particularly hitting the peripheral makers and
retailers hard.
the years, with the steep decline of the traditional PC, factors like
affordability of the consumers, price parity, design, availability of
stocks, as well as aggressive branding efforts of the laptops have
been cited as the primary culprits by most of the retailers as well
as manufacturers. “With the trend of mobility picking up and new
form factor devices like tablets becoming popular, desktop demand
has been affected to some extent. Also, with laptops becoming more
affordable, desktops also face a stiff competition,” says Shishir
Singh, director, product marketing, CSMB,
India.
DRIVE AND THE $ ONSLAUGHT
in 2011, assembled PCs alongwith branded desktops took the hardest
hit with prices of components increasing, the hard drive crisis
resulting in hoarding by the vendors, and the shift of major
peripheral companies like Logitech towards other product lines. Also,
OEM tie-ups in the past with Intel, AMD, NVIDIA, WD, Nanya, and
others did the trick for the 'branded PC' manufacturers in
harnessing more market share. “The key factors that had affected
desktop sales in 2011 were rupee depreciation and hard drive crisis
due to Thailand floods. Desktop sales were normal as projected till
the end of Q2 after which there was a sharp decline,” says Vinay
Shetty, country head, component business, ASUS India.
“
the crisis there is no clear forecast of the pricing and availability
of hard drives. I don't see any major change to take place in the
near future about the pricing and all. Major vendors like Lenovo,
Acer, and others are buying out the hard disk stocks in bulk, as a
result of which consumer market will take time to attain normalcy,”
says Bimal Javeri, owner, Hard Track. During the hard drive crisis,
dealers in Karnataka revealed that a Seagate 500 GB hard disk cost
around Rs 4,800 (excluding tax) whereas in times of normalcy, the
same product was priced at Rs 1,675. “The slowdown in demand comes
on the back of robust growth in the JAS quarter. While we are seeing
some softness in demand for PCs in India with the local currency's
sharp fall, a shortage in the supply of hard disk drives in the wake
of the severe floods and rains in Thailand has made matters worse.
the depreciation rate for the rupee has been quite high and with most
PC components being imported, the costs have increased over time.
“While we will not be able to a sorb the full increase, we will
minimize the hike that we pass on to the end customers,” says Amar
Babu, MD, Lenovo India. Similarly, ASUS too opined of the hard drive
market recovery by February-March 2012. “The impact is felt more in
the entry-level segment and
not so much in the mid- and high-end segment. Also, since last month
we're seeing that buyers who were at the beginning of the impact
cycle, postponing their purchases, are now slowly getting accustomed
to the price hike and buying,” adds Shetty.
OF THE ASSEMBLED PC
drive market recovery and a miraculous economic u-turn may do the
trick for the ailing desktop market, but assembled PC woes are here
to stay. Already reeling under aggressive pressures from the rising
desktop sales, the assembled PC market has lost its last solace even
in the hands of the home users. Already the SMB and enterprise
desktop space is captured by the likes of Compaq, HP, Dell, and
Lenovo with the government space build up around HCL, Wipro, and
their likes, assembled PCs have always been an outcast in these
segments. Now with end-users too opting for the Lenovo ThinkCentre,
Dell Inspirons, HP Pavilions, and their likes, the good old assembled
PCs have now landed up either with a reverse logistics company or
routed to the left-out class E-cities. As a clear indication,
assembled PCs are nearing their end with the golden era of the
assemblers already passé. However manufacturers are not quite
pessimistic about the trend and the fall of the assembled PC market.
Indeed, the loss of assembled PC market share has been replaced by
the growth of the branded players.
opportunity is always a concern for any hardware player or dealer and
desktops are no exception. Although laptops have emerged as a
preferred choice for upcountry consumers too (like the metros),
desktop sale figures remain impressive; but only for the branded
players. “Branded PCs have clearly emerged as the preferred choice
of the customers in the upcountry area. Laptops in some upcountry
areas are recently commanding a higher market share in overall IT
sales; however there are consumers who opt for an assembled PC,”
says Palash Maitra, owner, Matrix Solutions.
GAMING GAMBLE
gaming segment remains a brighter area for the assemblers as well as
for the branded players. While the major assemblers and dealers are
specifically offering product assimilation in the 'graphics rich
experience' thereby creating specialized 'gaming zones' for the
consumers, branded players too have started their penetration in
these areas. Dell, with its Alienware, has significantly performed
well along with high-memory and graphic card bundles by other
manufacturers, but so far, assemblers had the last laugh when it came
to gaming. Even this area seems to be targeted not only from players
within the desktop category, but by mobility devices as well. Laptops
like XPS, Studio, Pavilion, and others have already put into question
the need for a specialized gaming device by incorporating
high-capacity graphic cards and an improvised cooling system and
tablets may soon challenge laptops for a share in the gaming segment
as well.
OF A 'BRANDED' INDIA
of now, assembled PCs are surely losing their hold with Gartner
stating that this PC segment accounts for 42.5% (excluding
replacement market figures) of the desktop market share as of May
2011, as the manufacturers are seemingly having a brighter smile with
their market shares eating into the assembled counterparts. India is
moving towards branded PCs and this move is poised to continue for
the coming years. The overall desktop market has shrunk compared to
the growth rates from the mobility devices (taken together), major
vendors are quite optimist about the ongoing demand for desktops.
“Upgradability, cost of spares, operating times, service support,
and pricing are some of the reasons why enterprise and consumer
segments would still continue to go for desktops. There is still a
large pie for the first-time PC buyers in the country who prefer
desktops over laptops,” says Shetty.
admitted that mobility devices may overtake desktop usages in the
long-run. “The Indian market is large enough to accommodate both
the demand and growth of traditional PCs as well as tablets.”
states Babu. For now, branding efforts by the global players have
indeed paid off well with the old-time assemblers gradually taking up
sub-distribution and branded
retail as the natural evolution of their business.