India PC sales may fall in 2014 amid lack of govt projects: IDC

PC shipment rose 4.8% in 2013 mainly aided by govt projects

Personal computer (PC) market in India, which grew 4.8% in 2013, is likely to decline in 2014 amid no big announcements around education projects and delay in decision making due to general elections, market intelligence and advisory services firm International Data Corporation (IDC) today said.

While the decline in commercial PC segment in India is expected to be “steep” in 2014, the consumer segment will take a hit as buyers continue to drift towards phones and tablets.

“With general elections around the corner, the focus is expected to be on populist measure and hence the buying decisions in state-owned organisations and e-governance projects is expected to be much delayed,” IDC said. “The refresh buying on Windows XP might drive volumes amongst enterprises but we expect the same to be negated by lack of buying from the Government vertical.”

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In 2013, PC shipments to India stood a 11.5 million units, as the overall market improved on account of buying across different state governments for their initiatives relating to distribution of free laptops to students.

Aided by such special programs, the commercial PC segment hit a high of 6.7 million units during 2013, up 15.8% from a year ago. However, excluding these special initiatives, demand conditions “worsened” during the year due to several factors such as depreciation of rupee, weak economic growth, slowdown in new hiring and fears of layoffs in large companies.

“There was a lot of uncertainty amongst investors and businesses. Buying decisions were noted to be typically stretched over two-three quarters.” said Manish Yadav, market analyst at IDC.

The consumer PC market witnessed a 7.4% decline in 2013 at 4.8 million units, due to soaring inflation, and drift towards smartphones and tablets.

Hewlett-Packard (HP) held the largest share in the Indian PC market at 28.5%, backed by the execution of the largest education deal in the state of UP. “Price competitiveness remained HP's biggest strength mixed with their well spread partner coverage across the country,” IDC said.

HP was followed by Dell and Lenovo, respectively. Dell captured the second spot with a market share of 13.2% in 2013 and a year-on-year growth of 5.7% in absolute volumes. Lenovo had a market share of 12.2% during the year.

“Dell benefits from a high brand recall that it has retained amongst the Indian consumers. Further, the vendor has been aggressive and re-investing its efforts and focus on the end-user computing business post their privatisation announcement,” IDC said.

“Lenovo is strongly placed in the enterprise business and in the all-in one desktop category. With the new line of business towards tablets and phones, we anticipate Lenovo to leverage their reach and grab more consumer mind share in the days to come.”