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GST impact: PC shipments at pre-2010 levels

After recovery signs in March quarter, shipments enter slow lane

Arnab Dutta  |  New Delhi 


Fear of uncertainty and a massive destocking spree among manufacturers ahead of the goods and services tax (GST) have pushed personal computer shipments almost eight years back. In the June 2017 quarter, plummeted to the level it was eight years ago. The number plunged 18.2 per cent to 1.75 million units — close to 1.76 mn units in April-June 2009.

The segment fell 23 per cent from the corresponding quarter last year to 0.81 mn units. The previous time consumer had come this low was in the December quarter of 2009, when it declined to 0.83 mn. Commercial went down 14 per cent to 0.94 mn units — similar to 0.96 million shipped in the December quarter of 2008.

According to industry sources, the free fall on shipment was mainly due to a fear among companies that primary sales would remain low once started in July. “In anticipation of poor offtake during the initial phase of the regime, we had marked down our sales forecasts. Thus, the shipped numbers were also lower than the normal,” a senior executive from one of the top players said.

Manish Yadav, associate research manager, client devices, IDC India, said: “Outlook on discretionary spending remained optimistic. However, channel partners remained cautious and planned for de-stocking due to GST, which led to fewer sales in the quarter. implementation has impacted business even as the effect of subsided.” 

PC shipments
Analysts from IDC predicted the market would revive soon as the festive season was around the corner. State-sponsored educational projects and a massive procurement drive adopted by the Electronics Corporation of Tamil Nadu might help the commercial PC segment. “Demand for PCs would also be fuelled by small business as this segment of users would look to comply with norms electronically,” said Yadav.

Market leader HP strengthened its dominance by increasing its share to 33.8 per cent during the June quarter, 5.4 percentage points higher than 28.4 per cent during the year-ago period. Its share in the segment grew 35.4 per cent, the highest since September 2016. “Strong channel engagement and complete package offering of hardware, software and services for successful implementation made HP one of the preferred brands,” IDC noted. Dell held on to the second spot with a 17.5 per cent share. 

However, it took the opportunity to liquidate excess inventory. The third largest player, Lenovo, managed a 16.9 per cent market share. But it emerged as the second brand after HP in the segment. 

First Published: Wed, August 23 2017. 01:17 IST