Fuelled by growing notebook consumption, personal computer sales has crossed 7.3 million units in FY08, a 16 per cent increase over last year, according to a MAIT study. An industry performance review by Manufacturers Association for Information Technology (MAIT), the apex body representing India’s IT hardware sector, projected the PC sales to touch up to 8.5 million units in FY09. While releasing the study, MAIT Executive Director Vinnie Mehta said, ”the overall consumption in the PC market was led by telecom, banking and financial service sectors, education and BPO/IT-enabled services, and the e-governance initiatives of the Union and the State Governments.” The southward trend in pricing for all IT products continued during the year due to technology advancements and competition.

Notebook sales grew by 114 per cent to 18,22,139 units during FY08 as compared to 8,50,860 units last year, the study said. Desktop sales increased a mere one per cent to 55,22,167 units during 2007-08 from 54,90,591 units a year ago. Notebooks now account for a quarter of the total PC market in the country, up from less than three per cent four years ago–a clear indication of consumer preference towards mobility. Households accounted for 44 per cent of the market growing 150 per cent; while business accounted for 56 per cent of the market growing 93 per cent.

Mr Vinnie Mehta, said.

Almost three-fourth of the notebook consumption happened outside the top metros. Driving the consumption are factors like drop in entry level notebook price-points and mobility,” MAIT Executive Director,

Multinational brands accounted for 45 per cent of the total desktop market in 2007-08 (compared to 39 per cent share last year). The proportion of Indian brands fell from 23 per cent to 22 per cent. The share of assembled desktops and unbranded systems also shrunk to 33 per cent of the total desktop sales (38 per cent in FY07).

The number of active Internet entities (establishments or individuals with Internet connection) increased to 7.2 million subscriptions by March 2008, while the figure was six million units on March 2007. With this, the Internet users exceed 52 million.

Computer makers are feeling the heat and what else to blame but inflation and weak enterprise demand. Even as PC prices were hiked last month, a good monsoon may again boost demand and ease prices. The flat growth in Desktops has been attributed to inflation and flat IT budgets, which have stagnated due to US slowdown and less demand from some sectors. Overall, there has been a rise in unit sales but a decline in revenues by 2%. This is because the average cost of a desktop PC fell from Rs 19,000 to Rs 18,500. Notebook sales, however, grew at 114%. PC prices increased by 5-10% last month. Transport costs have also increased due to a rise in crude prices. About 70% of PC components are imported and hence increase in transport costs impacts the cost of a PC. In future, companies may play the price game carefully. Companies, which want to increase market share at the cost of profitability, may not increase prices in the short term.

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