New Delhi
July 23rd, 2007

Manufacturers' Association for Information Technology (MAIT) announced the findings of its Industry Performance Review for fiscal 2006-07. The total PC sales between April 2006 and March 2007, with desktop computer and notebooks taken together, were 6.34 million (63.4 lakh) units, registering a growth of 26 percent over the previous year. The buoyant mood in IT consumption was led by significant growth in notebook sales, which grew by 97 percent, while purchases of desktop units grew by 19 percent. PC sales are projected to touch eight million units in fiscal 2007-08, given the strong macroeconomic conditions and buoyant buying sentiment in the market, led by demand from various industry verticals.

Demand was highest from the telecom, banking and financial service sectors, education and BPO/ITeS, and rose also on account of e-governance initiatives of the union and state governments. Further, significant consumption in the small and medium enterprises contributed to the industry growth and consumption in the home market remained buoyant. The southward trend in pricing continued during the year due to technology reasons.

Commenting on the need for a strong domestic IT market to strengthen India's hardware manufacturing industry, Vinnie Mehta, Executive Director, MAIT said, "Domestic demand is likely to gain further momentum in 2007, which has been declared the 'Year of Broadband'. We welcome the slew of encouraging policy measures announced by the government to promote development of content in the local languages. MAIT is committed to ensure that the growth in market translates into manufacturing opportunities and, in this context we welcome the Fab policy. The industry is also eagerly awaiting the long overdue policy for the manufacture of IT and electronics products. This could play a critical role not only in boosting highly capital-intensive activities like the manufacture of semiconductors, LCDs, storage devices and other related products, but also in expanding the consumption of IT goods and services in the country."

Emphasising the need for robust infrastructure to boost manufacturing, Mukul Singhal, President, MAIT added, "Clearly, apart from a stable policy regime, a strong infrastructure base is the need of the hour. We need reliable power, and a logistics and transportation infrastructure that can make India a viable manufacturing destination, ensuring timely delivery of goods produced. For our electronics industry to take its contribution to the Indian economy to the next level, and for these firms to be globally competitive, it is imperative to create competitive infrastructure."

Salient findings
Desktop
The North followed by the West led the desktop consumption accounting for 31 percent and 27 percent of the market respectively. Sales in the North grew by 59 percent, while in West it grew by five percent over 2006-07. Desktop consumption in the East increased by 53 percent accounting for 18 percent of the market, a reflection of heightened IT activities in the region. The Southern states witnessed a decline of 12 percent in desktop sales, they accounted for 24 percent of the market.

Multinational brands accounted for 39 percent of the total desktop market in 2006-07, registering a growth of 33 percent over the 35 percent share last year. The proportion of Indian brands fell from 28 percent to 23 percent; registering a decline of two percent. Assembled PCs and unbranded systems witnessed a growth of over 22 percent in absolute unit sales accounting for 38 percent of total PC sales in 2006-07, up from the earlier 37 percent.

The business segment accounted for 74 percent of sales, registering an 18 percent growth on a year-on-year basis. While sales to factory locations and also to small and medium enterprises were poor, sales to the large establishments witnessed a robust growth of 69 percent. Heightened e-governance activities led to 126 percent increase in government consumption. Household consumption of desktops grew by 23 percent, accounting for 26 percent of the total desktop market, with sales crossing 1.40 million (14 lakh) units.

The top four metros accounted for 32 percent of the total desktops purchased with 15 percent growth in consumption. Desktop purchase in B-class cities accounted for eight percent of the market, witnessing a decline of 26 percent. In smaller towns, PC purchases increased by 33 percent to account for 60 percent of the total PCs sold. Smaller towns accounted for 54 percent of the market in the last fiscal.

Notebook
Accounting for over 13 percent of the total PC market in 2006-07 compared to nine percent a year ago, notebook sales recorded a high growth of 97 percent. Consumption of notebooks by the business segment grew by 41 percent. With notebooks becoming increasingly affordable, consumption of notebooks in households grew fivefold accounting for more than a fifth of the total notebooks market.

Server
Servers registered a growth of one percent over the last financial year, making for a compound annual growth rate (CAGR) of 12 percent over the last five years. Consumption in small and medium enterprises declined by 36 and 40 percent respectively; however, this was made up by increase of sales to large enterprises, which grew by 112 percent.

Server sales declined by 5 percent in the four metros Delhi, Mumbai, Chennai and Kolkata and by 53 percent in the class INext four cities (Bangalore, Hyderabad, Ahmedabad, Pune); however, it grew 23 percent in other smaller cities across the country. The Metro cities accounted for 35 percent of total sales, while the Class INext four cities accounted for seven percent of the sales and the other smaller cities for 58 percent.
Peripherals

Overall printer sales, at 1.49 million (14.9 lakh) units, declined one percent during 2006-07. Printer sales are forecast to cross 1.8 million (18 lakh) units in fiscal 2007-08.

Page(s)   1