Govt projects fuel PC sales, up 24% in June quarter

Overall growth in the PC has remained weak with a sharply depreciating rupee adding to industry's woes

On back of huge government orders for personal computers (PC) in states such as Uttar Pradesh, the overall PC shipment in the country jumped by 24% to 3.53 million units in the three months ended June 2013 against the same period last year, market research and consultancy firm IDC India said in a note.

However, the overall growth in the PC has remained weak with a sharply depreciating rupee adding to the industry's woes.

Kiran Kumar, research manager at IDC India said that special projects currently being executed in states like UP, Rajasthan and Tamil Nadu accounted for roughly one-third of the total PC market size in the quarter but the organic demand for PCs outside special projects has weakened, which remains a cause of concern for PC vendors.

"Rupee slide derailed enterprise spending, as the investment decisions remained seemingly delayed across most of the verticals.”

The note also added that the consumer market in witnessed a marginal growth over during the June quarter compared to the March quarter. While the months of April and May were weak, "June largely reversed this stillness aided by back-to-school campaigns and loading of stocks across partners in preparation to the impending price hike on account of rupee volatility,” said Manish Yadav, Market Analyst.

The outlook for the current July to September is positive said the note. "Quarter three has historically witnessed strong consumer buying in lieu of forthcoming festive season in various parts of the country."

Even as July and August witnessed strong growth, Yadav added a word of caution: “PC business continues to thrive on wafer thin margins and it is still early to comment on the success of new form factors, which were anticipated to drive the overall value of this business."

He also said that outside special projects, demand from enterprises and government remain largely suppressed painting a gloomy scenario on commercial PC business, in the near future.

Figure 1: Vendor Share - India Overall PC Market, Q2 2013 (% of Shipments)
	Hewlett-Packard	34.1
Dell	11
Acer	10.4
Lenovo	9.3
Others	35.2
Total	100
Source: IDC's Asia Pacific Quarterly PC Tracker, Q2 2013