Personal Computer Industry Feels The Pinch Of Credit Squeeze

Despite optimistic projections by the industry last year, the personal computer (PC) market registered a dramatic slowdown in growth in 1996-97, according to industry researchers International Data Corporation (India).

A severe credit squeeze combined with the political instability to arrest this markets growth, said Ravi Sangal, general manager, IDC (India).

The industry grew by only 28 per cent this year against an overall growth of more than 40 per cent last year.

International Data Corporation s latest survey of the computer industry shows that in all, 486,188 PCs were sold this year compared to 374,420 last year. This number included desktops, portables and PC servers.

 

In value terms, the desktop and portables market size grew from Rs 2,491.9 crore in 1995-96 to Rs 2,685.6 crore in 1996-97, representing a mere 7.5 per cent growth, the survey said.

The PC servers, on the contrary, registered a better growth, with 13,188 units sold this year compared to 8,420 units last year, representing a 57 per cent growth.

In value terms, PC servers accounted for Rs 256.8 crore, representing a 10 per cent growth over last years Rs 233.7 crore.

Industry experts had projected PC sales to cross the 500,000 mark this year.

The slow growth came despite some major buying in the home segment after computer companies slashed prices drastically. Most of the benefit of this buying accrued to domestic companies like PCL and HCL.

More than the overall slow growth, however, the survey indicates the slow death of domestic brands in both the PC and PC server markets.

The survey also unveils a very interesting trend in the buying habits of the country: more people are buying higher priced international brands.

In the PC server market, for example, multinational (MNC) brands accounted for 52 per cent of all the units sold. This is a dramatic jump when compared to almost zero market share for the MNCs three years ago.

Among the international brands, Acer, Compaq and International Business Machines (IBM) are the top three brands. Acer, the Taiwanese PC giant sold 39,381 PCs capturing 8.1 per cent of the market. Compaq sold 33,547 PCs cornering 6.9 per cent of the market and IBM sold 22,364 PCs with 4.6 per cent of the market.

The rest of the market is divided between Hewlett Packard, Digital, Dell, AST, Apple, Gateway 2000 and a few other brands.

PCL is the single largest PC company in the country. It sold 62,232 PCs and has a 12.8 per cent share of the market. HCL is close behind with a 10.9 per cent share of the market, having sold 52,994 PCs.

In the PC server segment, Compaq has the largest share 25 per cent of the market in terms of value worth Rs 64.2 crore.

Though it sold only 16 per cent of the total number (representing 2,110 units). Compaq has been selling only its high value PC servers, said Sangal.

HCL-HP is the largest PC server vendor with 20 per cent (accounting for 2,638 units) share. Though in value terms it has only 16 per cent of the market (worth Rs 411 crore).

Wipro Acer is number three both in volumes and units with 14 per cent share in both units and value.