Falling prices to boost PC sales in 05

Bangalore, March 30 | Updated: Mar 31 2005, 05:30am hrs
The year 2005 is expected to witness sales of over four million PCs in India. In the current fiscal, a little over three million PCs have been sold.

According to MAIT and IMRB report, the PC sales growth, which was 23% since 1999, has seen a growth of over 30% since last two years. The report estimates a growth of 32% to touch four million PCs in 2005.

This year, small and medium businesses are expected to lead the PC sales. Due to introduction of VAT, SMEs are looking for adopting desktops in order to maintain accounts, said S Rajendran, general manager-sales and marketing, consumer product group, Acer India.

In order to tap the potential, Acer is conducting roadshows in all major cities in India, bundling its PCs with VAT-ready Tally applications.

Another interesting point is that demand for assembled PCs are considerably coming down. MAIT and IMRB report predicts that in the first half of 2004-05, the share of MNC brands will grow to 33% from 23% in 2003-04, while Indian brands will have 23% share and 44% will be assembled PCs share. During the last year, assembled PCs dominated the PC market with 57% share.

The main reason for this is price reduction. There is not much of a difference between branded PCs and assembled PCs in terms of price, said GS Raghu, managing diretor, Chira Information Technologies.

In 2004, companies like HCL, Acer and Zeneith introduced PCs at below Rs 20,000 price point with Linix as operating system. This is one of the main reasons why people are going for branded PCs.

The break-up of the market size indicates that the top four cities still account for bulk of the PC consumption. But the trend of smaller towns registering higher growth appears to continue in 2005 as well. We are getting purchase orders from small towns and villages. Home segment, specifically student segment is driving this sales, said Mr Raghu.