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