PC brands alter product specs to keep up with WFH and e-learning trends amid supply woes
The personal computers (PC) and laptops segment is seeing high uptake as the work-from-home, e-learning and gaming trends, that dominated most of 2020, continue this year, too, for a large section of consumers. According to Grandview Research, close to 7.62 million laptops/ PCs were sold last year. In the first quarter of CY21, the number of PCs/ laptops sold grew by 46% y-o-y, to reach 3.34 million units.
Brands such as Dell, Acer and Asus have rejigged their product lines to cater to this demand. Nokia forayed into this segment in 2020, while Japanese laptop brand Vaio (formerly Sony Vaio) made a comeback into the Indian market early this year in partnership with Nexstgo.
However, the shortage of essential components, such as semiconductor chips, continues to inhibit supply of PCs and laptops. Despite availability of these products being hit, by over 6-7%, around eight million units are expected to be sold this year, as per Grandview Research estimates.
High on specs
The gaming segment has been a huge growth driver for Asus since the start of the pandemic. “We witnessed close to 70% growth in the first half of 2021, compared to the same period last year, from our gaming vertical Republic of Gamers (ROG),” says Arnold Su, business head – consumer and gaming PC, system business group, Asus India. This year, the company has introduced an economical range under its Vivobook, ZenBook, ROG and The Ultimate Force (TUF). “After the first wave, we added a virtual demo feature where customers, from the comfort of their homes, could enjoy a store-like experience,” Su adds.
The brand claims to have recorded a 60% growth in revenue from online channels between January and June this year, compared to the same period last year. To beat the LCD display supply woes, Asus has turned to OLED displays for its new launches, as its manufacturing is far easier.
Vaio, too, is tapping into the demand for laptops in the e-learning and gaming segment. Seema Bhatnagar, regional business director, South Asia, Nexstgo, says the company sold one lakh units in India in CY20, and hopes to garner 15-17% market share this year. Nexstgo’s new products this year, such as Vaio Z and Cosmos 2-in-1, have been launched keeping students, SMEs and start-ups in focus. “These products are affordable, starting at Rs 25,000, and come with easy finance options,” adds Bhatnagar.
Nexstgo plans to expand its distribution network across India, as it has seen increased penetration in the tier II and III markets. The company has seen a 40% growth in revenue from its online channels during the pandemic; its direct-to-consumer (D2C) platform, Nexst Mall, was launched early this year.
Acer, meanwhile, has seen sales from its notebook segment double during the pandemic. The company sold 75% more units in the first half of CY21, compared to the same period last year. Sudhir Goel, chief business officer, Acer India, says, “Our focus is on premium products as we expect that the replacement (exchange) rate will be high this year.” Expanding its retail footprint is high on its agenda this year.
The supply-demand mismatch is likely to be redressed by the end of this year, says Madhumita Chaudhary, technology analyst, Grandview Research. Further, the government’s recent production-linked incentive (PLI) scheme may come as a respite to laptop manufacturers, helping them overcome the shortage of components, as the manufacturing of semiconductors and chips will move to India, analysts say.
The PC and laptop industry is slated to grow at 18-20% on a sustained basis in the coming years, according to Madhur Singhal, managing partner and CEO, Praxis Global Alliance. This will happen on the back of the hybrid retail model adopted by PC brands, partnerships with enterprises for delivery, service availability for both consumers and enterprises, and easy financing schemes.
While modern trade will continue to play a major part in PC sales in tier I towns, e-commerce will assume a significant role in tier II and III markets, Singhal adds. “These towns have huge potential. But, since the average selling price of a laptop is still very high for consumers in these markets, it will take time to reach a high number,” says Jaipal Singh, research manager, IDC.