PC

The PC mar­ket went through a chal­leng­ing phase dur­ing 2016. The year ahead looks bet­ter given the gov­ern­ment’s dig­i­tal ini­tia­tives

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If we look at CY 2016, it’s not a very good year for the PC mar­ket in India. Ac­cord­ing to IDC, the over­all India PC mar­ket for CY 2016 stood at 8.58 mil­lion units - a year on year drop of 15.2% over CY 2015. The over­all mar­ket de­clined ini­tially ow­ing to re­duced con­sumer de­mand and high in­ven­tory in H1 2016. How­ever, PC sales re­cov­ered start­ing June ow­ing to strong con­sumer sen­ti­ment backed by sea­son­al­ity and in­crease in fes­tive de­mand.

As we drill down fur­ther, as per IDC the con­sumer PC mar­ket recorded 4.22 mil­lion units in CY 2016, with a year on year de­cline of 12.9% over CY 2015. IDC says that high in­fla­tion and on­go­ing fis­cal con­sol­i­da­tion, con­sumer sen­ti­ment re­mained frail un­til H1 2016. How-

ever, with sub­sid­ing in­fla­tion and ben­e­fit from the Pay Com­mis­sion award, con­tin­ued low com­mod­ity prices and mea­sures an­nounced in the Union Bud­get to trans­form the ru­ral sec­tor cre­ated just the right buzz for PC pur­chase in CY 2016.

Mean­while, the over­all com­mer­cial PC mar­ket recorded 4.35 mil­lion units in CY 2016, with a year on year drop of 17.4% over CY 2015. “Bar­ring ful­fill­ment of limited large ed­u­ca­tion projects, the year wit­nessed muted in­vest­ment and de­layed spend­ing from gov­ern­ment seg­ment in H2 of CY 2016. En­ter­prises con­sump­tion had been the main­stay in hold­ing up the ag­gre­gate de­mand dur­ing the same pe­riod,” says IDC.

Ac­cord­ing to an IDC press re­lease, it made the fol­low­ing com­ments on the Top 3 PC vendors in the coun­try:

HP INC.: HP Inc. recorded a mar­ket share of 28.4% in the over­all India PC mar­ket in CY 2016, the ven­dor took the top spot with 3% point growth over CY 2015. The ven­dor con­tin­ues to dom­i­nate in the con­sumer PC busi­ness with 26.8% mar­ket share for the third year in a row; HP Inc. has recre­ated its brand in India PC mar­ket with strong prod­uct place­ment and ag­gres­sive mar­ket­ing cam­paigns sup­ported by new in­no­va­tive prod­ucts like Spec­tre. The ven­dor also led the com­mer­cial cat­e­gory with the ex­e­cu­tion of spe­cial projects and strong hold in en­ter­prise ver­ti­cal as well. DELL:

Dell recorded an over­all mar­ket share of 23.3% in over­all India PC mar­ket in CY 2016 and took the sec­ond spot. The ven­dor con­tin­ues its in­vest­ment in ex­pand­ing chan­nel strength and re­mained fo­cused on ad­dress­ing new op­por­tu­ni­ties in seg­ments like gov­ern­ment and ed­u­ca­tion. Ow­ing to which Dell gained around 4.9% growth year on year to record 24.5% mar­ket share in CY 2016 in the over­all com­mer­cial cat­e­gory against CY 2015.

LEN­OVO:

Len­ovo held on to the third spot, with an over­all mar­ket share of 17.6% in CY 2016. The ven­dor de­clined by 5.8% point in CY 2016 over CY 2015 in over­all India PC mar­ket. With changes in GTM strate­gies and in­ter­nal struc­ture, the ven­dor’s con­sumer busi­ness did ob­serve a drop of 2.5% per­cent­age points year on year in CY 2016, fur­ther, the drop was aided ow­ing to lack of spe­cial pro­ject ex­e­cu­tion against CY 2015. How­ever, the mar­ket be­lieves Len­ovo will bounce back in CY 2017 by lever­ag­ing its im­proved mar­ket­ing strate­gies and chan­nel strength backed by in­no­va­tive prod­uct line-up.

HOW JFM 17 STACKED UP?

While CY 2016 was a damp­ener for the PC mar­ket, there seems to be to an uptick in Q1 2017.Ac­cord­ing to the IDC Quar­terly Per­sonal Com­put­ing De­vice Tracker May 2017, the over­all India Tra­di­tional PC ship­ment for Q1 2017 stood at 2.16 mil­lion units ( a quar­ter on quar­ter growth of 12.5% over Q4 2016 and year on year growth of 8.5% over Q1 2016).

The over­all con­sumer PC mar­ket reg­is­tered a ship­ment of 1.05 mil­lion units in Q1 2017, with a healthy 14.5% growth from the same pe­riod last year and 19.4% quar­ter on quar­ter growth. “Post de­mon­eti­sa­tion re­form, mar­ket ob­served an up­beat de­mand ow­ing to an op­ti­mistic shift in dis­cre­tionary spend­ing from con­sumers in the first quar­ter of 2017,” says Man­ish Ya­dav, As­so­ciate Re­search Man­ager, Client De­vices, IDC India.

The over­all com­mer­cial PC mar­ket recorded a ship­ment of 1.11 mil­lion

units in Q1 2017. On the back­drop of sea­son­al­ity, ex­e­cu­tion of sta­te­owned man­i­festo deals and in­crease spend­ing from BFSI ver­ti­cal, Q1 2017 ob­served a quar­ter on quar­ter growth of 6.7% and 3.3% year on year over Q1 2016. “Com­mer­cial spend­ing re­mained op­ti­mistic about the eco­nomic sce­nario and the po­ten­tial for growth, de­spite un­cer­tainty sur­round­ing the sta­bil­ity of the global econ­omy,” says San­jeev Sharma, Re­search Man­ager, Client De­vices, IDC India.

Ven­dor wise, HP Inc. led the mar­ket with a 29.5% share of the over­all India tra­di­tional PC mar­ket in Q1 2017. In ad­di­tion to their suc­cess in the con­sumer seg­ment, HP Inc. picked up some key wins and ex­e­cuted a few state-owned ed­u­ca­tion projects along with ful­fill­ment of projects in the bank­ing and fi­nan­cial sec­tor. This led to a 5.8% growth quar­ter on quar­ter in the over­all India tra­di­tional PC mar­ket in Q1 2017. Mean­while, Dell took the sec­ond spot with 22.5% and Len­ovo held on to the third spot, with a 17.7% mar­ket share.

OUT­LOOK

IDC India an­tic­i­pates a short-term post­pone­ment and re­sis­tance by traders dur­ing GST im­ple­men­ta­tion phase. But in the long run ow­ing to this struc­tured tax regime the ef­fect will get neu­tral­ized and will pro­pel growth ow­ing to the fes­tive sea­son. “With fo­cus, around en­rich­ing gam­ing as the po­ten­tial seg­ment in the con­sumer busi­ness, OEMs are look­ing to re­vamp their prod­uct port­fo­lio and up­sell in mid to premium range. On the other hand, com­mer­cial busi­ness is ex­pected to grow over the next few quar­ters driven by state owned ed­u­ca­tion

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