Soaring laptop sales brings UPS market down

Mumbai

April 4, 2008

The growing market for laptops in the country has pulled down the market for
uninterruptible power system (UPS) in the low-end segment for home and small
office and home office level. Since laptops have an internal battery they do not
require a UPS, which is affecting the sales of this product.

What is bothering some vendors is that the desktop market has been sluggish
of late, which in turn has affected the market for UPS. The connectivity ratio
between UPS and desktops as per industry analysts is around 60 percent.

Pratik Chube, Country Manager-Channel Products, Emerson Network Power India
said, “We have seen a decline in the market for UPS in the entry-level
segment. But Emerson concentrates more on the enterprise segment, where we sell
UPS and complete solutions for data centers and UPS for mission critical
applications. So our overall balance sheet will not be affected by this trend.”

Agreeing with him, Subodh Tagare, MD, APC India said, “There is definitely
a decline in the market for UPS at the entry-level but in unit terms, the UPS
market in India has been growing at around seven percent and in value terms, the
market for UPS is growing at around 15 percent.”

According to Tagare the ratio for connectivity between desktops and UPS is
around 80 percent. He said, “A-class cities contribute highest to the units of
UPS sold. But upcountry regions like tier-2 cities have grown drastically in the
last year.” With people going for high-end PCs, they have now started opting
for high-end UPS also, which is good for vendors and partners.

The UPS market in India has grown at 37 percent in the last two years. Its
business has ceased to be a seasonal one with sales going up as the mercury
rises. People, who use mission critical applications, need to have their UPS in
place, as they don't want their work to be affected by any kind of power cuts
and power fluctuations.

“I accept that the sales for UPS have dropped recently since the market for
desktops is also going down, but I think there is still ample opportunity in the
market as desktops are still in demand in offices and home segment,” opined
Ramdin Sanga, Marketing Manager, WEP India.

Ranjit Mohite, MD of Pune-based Champion UPS does not feel that the laptop
business is a major threat for the UPS business. he firmly belives that the
market for laptops and desktops will co-exist, and therefore the UPS business
will also continue to flourish especially with increased sales coming in from B-
and C-class cities. He opined, “The growth has been coming from upcountry
region now and we are concentrating on B and C-class cities a lot.”

Raj Saraf, CMD of Zenith Computers agreed with him and noted that laptops and
desktops will continue to have 50 percent marketshare each in the PC industry.
Ravindra N Hanchate, ASM-Mumbai, Tripp-lite UPS Systems said, “The drop in
the UPS market is not more than five percent as the desktop market is always
going to be there.”

The UPS market at the lower end is mostly dominated by the unorganized
sector. Though companies like Champion and APC have their own share in it,
Chinese and Taiwanese products that are imported in the country, form a major
part of the sales at entry-level. The UPS market in the country as per IDC
estimates is around $400 million which is growing at 22 percent CAGR.