NEW DELHI
FEBRUARY 25, 2007

In a year that witnessed all-round economic growth, the India client personal computer (PC) market witnessed a 25 percent year-on-year growth in unit shipments (CY2006 over CY2005), according to IDC's India Quarterly PC Tracker, 4Q 2006, February 2007 preliminary release.

On the findings, Kapil Dev Singh, Country Manager, IDC India said, "The five million PC shipments and 25 percent growth of the Indian PC market indicate the maturity it has attained. The market is characterized by the emergence of clear-cut segments, vendors running segment specific marketing programs and the market ceasing to be just price driven. The future of the PC market depends on how quickly and strongly new need drivers evolve."

In the overall client PC (notebooks and desktops combined) market the rankings remained unchanged. HP retained the top spot with a market share of 21 percent, followed by HCL at 14 percent and Lenovo at nine percent in terms of unit shipments.

In the total desktop PC market, HP led the market in CY 2006 followed by HCL and Lenovo. In terms of total commercial desktop PC shipments HCL and HP jointly shared the number one position in CY 2006 followed by Lenovo. In terms of total consumer desktop PC shipments HP led the market in CY 2006 followed by HCL and LG Electronics.

In the total notebook PC market alone, HP retained the top spot with a market share of 38 percent in CY 2006 in unit shipments. Lenovo and Toshiba were at second and third spots with market shares of 17 percent and 10 percent, respectively.

Among other findings, the survey found a positive growth in desktop PC average selling values (ASVs) and notebook PC shipments doubling within a year. The survey noted that client PC shipments are expected to witness increased traction in 2007, as IT retailing undergoes widespread experimentation.

According to Piyush Pushkal, Manager, PC Research, IDC India, "The year 2006 witnessed a three percent growth in ASVs of desktops, thanks to the increased adoption of LCD/TFT monitors and other accessories, by users seeking to future-proof their investments as well as experience enhanced functionality."

Incidentally, according to IDC's India Quarterly Monitor Tracker, 4Q 2006, February 2007 preliminary release, LCD/TFT monitor shipments grew more than 200 percent on a yearly basis (2006 over 2005) for branded desktop PC players.

The notebook PC market continued the growth momentum during CY 2006. Coupled with aggressive marketing by vendors, the notebook PC segment as a whole witnessed a massive growth of 104 percent year-on-year, touching a landmark of nearly one million unit shipments.

"With the falling prices of notebook PCs and increasing culture of mobility, the market witnessed a significant shift of consumer and commercial desktop customers opting for notebook PCs instead," stated Pushkal.

The notebook PC market growth was contributed in large measure by the buoyant Education segment buying, individual consumer/SOHO purchases and increased traction from the SMB segment.

With higher education institutes such as engineering colleges and management schools aggressively adopting the concept of Wi-Fi campuses and usage of notebook PCs in their learning tools and methodologies, a healthy surge in shipments was seen.

The survey said 2007 is also expected to be the year when overall client PC shipments through retail outlets, especially the notebook PC form factor would see a higher traction.

"The year will see IT vendors trying out many new approaches and go-to-market strategies for product retailing. The efforts will focus on wooing SOHO and individual/home customers for converting them into impromptu buyers.

Experimentations will also be seen in retail formats, in-store and on-site promotions, product bundling, and alternate payment options. IT retail outlets of HP, HCL Infosystems' Digi-Life stores and multi-brand IT product retail stores like Sahara's 'IT Junction' initiative, Pantaloon Retail's 'e-zone', Big Bazaar, etc. are already functional. Other big Indian retail players are expected to quickly follow suit, trying to reposition their offerings to customers by segmentation and a competitive approach," commented Pushkal.

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