PC Market beats the Economy, grows 33% in 1998-99*
New Delhi, May 1999 - IDC (India)'s PC Tracking Program reveals that the Indian PC market recorded a healthy growth in 1998-99, despite the economy being in the doldrums for a major part of the year. Units shipments of PCs recorded a growth of 33% in unit terms and 20% by value, reaching a figure of 844,550 units and Rs.4009 Crores during the period April 1998 to March 99.
Between the various form factors, Desktop PCs grew commensurate with the market growth. After staying virtually stagnant in 1997-98, PC Servers grew at a robust 27% in unit terms. Growing demand from banks and financial institutions, especially in the latter half of the year fuelled the growth in the PC Server market. The Notebook market, on the other hand, remained constrained, registering a growth rate of only 10% in 1998-99. IDC believes that demand for Notebook PCs is still a corporate-only phenomenon. High prices vis-à-vis similarly configured Desktop PCs remain the main deterrent.
In a year when the economy was at its worst and corporate investment was constrained, the Home segment turned out to be the saviour for the PC industry. The segment grew by an astounding 89%, with shipments crossing the 200,000 mark. Small Business and Small Offices were the other segments that recorded growth rates higher than the market average. These three segments captured more than 51% of the market in 1998-99, up 12 percentage points since 1997-98.
*April 1998 to March 1999
^1Crore = 10 Million
Table 1: Indian PC Market by Form Factor, 1997-98 & 1998-99
Form Factor 1997-98 1998-99
Units Value (Rs. crore) Units Value (Rs. Crore)
Desktop 604,687 2,814 806,910 3,371
PC Server 13,681 253 17,352 344
NoteBook 18,408 268 20,288 294
Total 636,776 3,335 844,550 4,009
As the market becomes more segmented, vendors need to devise segment-specific strategies to win in the market place. Vendors who have taken the lead in targeting the growing segments are the ones who have emerged as winners.
HCL continued to be the market leader in terms of number of PCs sold, followed by Compaq and Zenith. Both HCL and Zenith did well because of a good presence in the fastest growing segments of the market viz. Home, Small Office and Small Business. Low price-points together with promotional blitzkrieg enabled these vendors to capture the imagination of the home buyer, who still shows a very strong tilt towards local assemblers.
Table 2: Market Shares of Leading PC Vendors, 1998-99
Vendor Share by Units Share by Value
HCL 8.4% 7.9%
Compaq 7.9% 15.6%
Zenith 7.0% 5.1%
IBM 4.2% 7.7%
Acer 3.7% 4.4%
Hewlett-Packard 3.5% 5.6%
Wipro 3.3% 2.8%
Vintron 1.9% 1.2%
SNI 1.6% 2.3%
Dell 1.0% 2.5%
Others* 57.5% 44.9%
Total 844,550 Units Rs.4,009 Crores
*Includes Local Assemblers and GIDs
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