Indiantelevision.com Team

(29 June 2006 7:00 pm)

MUMBAI: MAIT, the apex body representing the hardware, training and R&D services sectors of the IT industry in the country, today announced the findings of its Industry Performance Review for the financial year 2005-2006. The results reveal that the PC market - desktops and notebooks taken together, grossed 5.04 million units registering a growth of 32 percent over the last fiscal.

Desktop sales crossed 4.6 million units registering an annual growth of 27 percent while the notebooks shipments exceeded 0.43 million units growing 144 percent over 2004-2005.

The growth in PC sales, on the one hand, can be attributed to significant consumption by Industry verticals such as telecom, banking and financial services, manufacturing, retail and BPO/IT-enabled services as well as major e-Governance initiatives of the Central and State governments; on the other hand, the drop in prices, especially at the entry-level contributed to a strong households market.

The southward trend in pricing continued during the year due to technological reasons and other initiatives of the industry, including the sub-Rs.10,000 PC.

The year also witnessed aggressive market campaigns with celebrity endorsements for IT products. Significant consumption in the small and medium enterprises added to the industry numbers. Further, the trend of increased PC purchase in smaller towns and cities as witnessed in the previous years, continued undiminished, adds the release.

The MAIT-IMRB study was initiated in 1996-1997 and leading IT vendors subscribe to it. The study encompasses five broad product segments - computers, networking products, printers, other peripherals and Internet. A synopsis of the findings of the MAIT-IMRB study states the following:

-The Top 4 metros accounted for 33 per cent of the total PCs purchased. While the proportion of sales to Top 4 metros decreased, as against 38 per cent in 2004-05, the sales in absolute terms increased by 10 per cent. PC purchase in the 'Next 4 Cities' grew by 50 per cent and accounted for 13 per cent of the market.

-In the Households segment, SEC A continued to dominate the market with 55 per cent marketshare, followed by SEC B at 29 per cent, recording a growth of 21 per cent and 15 per cent respectively in FY 2005-2006. Sales in the SEC C segment declined by 13 per cent to account for 16 per cent of the market. The growth of IT consumption in the household segment is expected to remain steady, as the vendors have started positioning and promoting PC as an aid for education and entertainment. Further, steady drop in prices of branded PCs has resulted in shift of the household consumer away from the assembled non-branded PCs.

-Notebooks witnessed the highest growth amongst all product categories. In 2005-2006, notebook sales with 144 per cent growth, more than doubled to 0.43 million units. Households accounted for 13 per cent of the market growing 115 per cent. Consumption of notebooks in the small-sized enterprises grew by 248 per cent, accounting for 31 per cent of the sales to business segment. Compared to the last fiscal, sales to large enterprises grew by 124 per cent accounting for 51 per cent of the total sales in the business segment.

-The server market registered an impressive growth of 81 per cent with over 89 K units of server shipments. Sales in the 'Top 4 cities' grew by 23 per cent accounting for 37 per cent of the total market. Sales in the 'Next 4 cities' increased by 199 per cent while other smaller cities registered a growth of 138 per cent. The 'Next 4 cities' and the other smaller towns accounted for 16 per cent and 48 per cent of the market respectively. Server sales grew by 51 per cent in the larger businesses segment and by 188 per cent in the Medium-sized businesses.

-In the Networking market, sales of modems dropped by 23 per cent. Sales of Network Interface Cards (NICs) grew by102 per cent and that for Hubs by 27 per cent. Consumption of modems in the households declined by 28 per cent accounting for 58 per cent of the total modems market. Consumption in Businesses segment declined by 15 per cent accounting for the rest 42 per cent.

-The UPS market grew by 27 per cent over 2004-2005. Consumption in 'Top 4 cities' declined by 9 per cent, however it grew in the 'Next 4 Cities' by 69 per cent and in other smaller towns by 55 per cent. Households accounted for 51 per cent of the UPS market registering a growth of 17 per cent over fiscal 2004-2005; while consumption in businesses segment increased by 38 per cent accounting for 49 per cent of the market share.

-Consumption of monitors surged to 4.63 million units with a growth of 27 per cent over the last financial year 2004-20l05. Consumption of 15" monitors grew by 45 per cent accounting for 50 per cent of the market; that of 17" by 41 per cent accounting for 32 per cent of the market. Sales of 20/21" monitors increased by 2 per cent while the consumption of 14" monitors declined by 19 per cent and their share came down to 14 per cent of the overall market.

-The number of active Internet subscribers increased to 4.12 million in March 2006, while the figure was 3.12 million in March 2005. The penetration of Internet in the top 22 cities was 45 per cent among businesses, while for households it was 12 per cent. The businesses segment now contributes 37 per cent of the total active Internet entities and households account for the remaining 63 per cent. Dial-up remains the most commonly used means of accessing the Internet among businesses, although the proportion of businesses using dial-up has dropped from 54 per cent in March 2005 to 38 per cent in March 2006.

Commenting on the need to boost the Indian IT manufacturing industry, MAIT president Rajendra Kumar said, "India is very high on the agenda of several leading global IT manufacturers today. The Government's keenness to promote IT/electronics manufacturing in India is evident by the fact that it will soon unveil policies on setting up Fabs as also to encourage other hardware manufacturing and consumption. This is indeed heartening. Speed will be of essence here and the IT/electronics manufacturing industry is keenly awaiting these policies that are long overdue. This will play a critical role not only for attracting high-capital intensive manufacturing activities like the semiconductors, LCDs, storage devices etc. but also for spreading the IT consumption in the country."

MAIT's Industry Performance Review - ITOPs, conducted by the market research firm IMRB (Indian Market Research Bureau), is bi-annual and aims to address the hardware sector's efforts to manage the business environment, gauge the market potential and consumer trends. This round of the study involved face-to-face interviews with over 25,000 respondents selected randomly from 22 cities in India.

Desktop Sales however, are expected to cross 5.6 million units in fiscal 2006-07 while overall PC shipments would exceed 6 million units.