There seems to be a slump in the personal computer space in India. That?s not a new trend, and hence a continuing worry for industry. In February, market research firm IDC had said that the industry witnessed its lowest shipments during the fourth quarter of 2011, when stacked against the numbers of the last six quarters.
During that period, just 2.39 million units were shipped, surprising many analysts tracking the sector. The fall?22.7%?was steep. With the Union Budget increasing the excise duty, there is bound to be further slackening of the business.
But there is a ray of hope. According to Gartner, India?s PC shipments are expected to reach 12.5 million units this year, a 17% jump from last year. All thanks to Tamil Nadu! The industry is all set to gain from the Tamil Nadu state government contract, by which it is planning to give away laptops to students of aided colleges and schools. This is scheduled to add about 9,20,000 units to the total shipments in 2012. This deal alone will result in double digit growth for the industry. Otherwise, the sector would have had to settle for a mere 8.4% rise this year.
Last year has been pretty rough for PC players, with myriad smartphones flooding the market. Inflation shot up and cost of living was a worry. All this affected PC buying, according to Gartner?s Vishal Tripathi. The non-branded PC market had reduced to less than two-third of its size. Desktops are in any case disappearing from all households, with consumers preferring a laptop or a tablet. Sectors like FMCG and BFSI are opting for tablets for their front end sales force and the writing on the wall is clear.
This is where the move by the Tamil Nadu government assumes significance. Sure, they are meeting their poll promises, but as a result an industry is getting a big boost and children are receiving much needed learning. Last year, the hard disk drive (HDD) shortage due to the floods in Thailand had impacted the desktop market. This year Tamil Nadu may fetch what Thailand could not. HCL will supply 2 lakh laptops to Tamil Nadu government as part of the scheme, while Lenovo is looking to supply 3 lakh units, according to reports.
The Tamil Nadu government has also sanctioned the purchase of personal computers with internet connection for all MLAs from their constituency development fund. MLAs can purchase a laptop or a personal computer, along with a printer and broadband internet connection once out of this fund, according to a Tamil Nadu government release.
All of this is happening when worldwide there seems to be a slowdown in PC business. But India can never cease to surprise, can it?
