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One in every 50 Indians owns a PC today

June 15, 2007

The growth in the PC market here in India is making everyone sit up. According to research firm IDC, India already has 22 million PC’s. Ofcourse the number is negligible compared to our billion plus population, but well, the figures show a strong upward trend.

IDC figures show that last year overall (2006 over 2005) the PC market as a whole grew by 25 per cent in India – 5 million units were sold. Expected growth this year (2007-2008) is to be another twenty per cent. This may be lower by 5 percentage points than the previous year, but its double that of global growth figures…this is according to the research firm Gartner.

Future growth in India? The technology research firm Forrester has predicted that India will add another 157 million PCs by 2015. Considering that we have a 300 million strong middle class market, these figures are not surprising.

PC Penetration in the world (2006)
How do we stand as compared to the world? Well, while our PC penetration is just about 2 percent, the United States has a PC penetration of 73.4 percent, Sweden 56, Brazil 19.6, China 7, Russia 12 and Pakistan 1.3.

Which segments are driving the sales in India?
Business ofcourse. And the government sector. Interestingly, laptops are selling like hot cakes! The fact that the more expensive laptop (as compared to desktops) is selling very well shows that the corporate sector is investing here.

In the first quarter of 2007, 20 per cent of PC sales were of laptops. Also if you take year on year growth figures in sales of PC’s from April 2006 to March 2007, laptops sales have grown by over 85 per cent.

Growth in the household sector
Not that other markets aren’t showing a healthy growth. They are. In fact the household sector is showing better growth than the business segment. The latter may account for about 77 percent of sales (2006-2007) and households just 23 percent of the total (desktops) but household sales of PC’s increased by 12 percent, higher than the 7 percent growth of the business sector.

Who buys home PC’s?
Expectedly, its the higher socio-economic catetgory (SEC A)…but there’s a 2 percent drop in sales to this segment (of desktops) this year, and on the face of it seems as if the market is saturated. It isn’t really, because the higher classes are buying laptops. The sales of laptops showed a growth of steep growth curve.

SEC B has a lower (37 percent) market share, but showed a higher (33 percent) growth. SEC C showed 12 percent growth with 20 percent market share.

The home segment is doing well not just because incomes are rising, but also because prices of pc’s are falling. In fact the price differential between a branded PC and an assembled one has lessened substantially. This is partly due to the government’s lowering levies and duties.

And you can get some fairly inexpensive PC’s too – for Rs 10.000 ($250 USD) onwards. For the educated upwardly mobile salaried Indian, thats the average salary he gets when he starts out in his career. Students are taking soft loans to buy PC’s.

Actually, mindsets are changing. Today, no one denies the importance of having a PC at home. Middle class people have realised that to own a TV (everyone has a TV, even slum-dwellers) and not a PC is a matter of shame. Specially if you have a child in the house.

High Internet penetration driving sales of PC’s
Another factor which is driving up home pc sales is the widely available and inexpensive broadband. For just Rs 250 ($6.25 USD) to Rs 500 ($12.5 USD) – you can get a broadband connection (with limited downloads). In fact India’s internet usage is the fastest growing in the world according to a March 2007 news report of the IAMAI (Internet Usage and Mobile Association of India). India’s internet population grew by 33 percent and the country today has over 21 million users of the internet, as compared to 16 million 16 million a year ago.

What does the future hold?
Well, China seems to be galloping ahead. We have a large illiterate population and that is holding us back.

The real growth lies in the semi-urban and rural areas. The urban will keep growing steadily, but for the semi-urban to grow our country needs to take that big leap forward and take technology (computerisation, telephony and broadband internet) to small towns. And as for the rural, unless we educate our masses, they are going to be left out…and countries like China, Brazil and Mexico are going to beat us. In fact, by 2010, Mexico’s computer penetration is slated to touch 46 per cent!

One Comment leave one →
  1. June 15, 2007 10:35 pm

    Surely Bharti-WalMart signifies it.

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