IDC Identifies Sign PC Market Improved in CY 2014

Calendar year 2014 proved to be an interesting phase for the India PC business. The results for the consumer business turned out to be unexpected both in the beginning and towards the end of the year (i.e. Q1 and Q4 2014).

While the first quarter recorded a new low, fourth quarter results turned out to be very positive, beating forecasts substantially.

Overall India PC shipments for CY 2014 stood at 9.6 million units, down -16.5% year on year from CY 2013. Outside special deals, the overall market witnessed a marginal year-on-year revenue decline of -0.4% in CY 2014.

The overall market declined initially in the run-up to the 16th general elections held in the first half of 2014.

However, PC sales recovered starting in June owing to innovative pricing actions by vendors mixed with festive buying and pent-up demand boosting the overall sales.

The consumer PC market stood at 4.9 million units in CY 2014, with year-on-year growth of 1.7% over CY 2013.

“Continuing from CY 2013, consumer sentiments remained frail until the elections.

However, stable government in the center aided hopes on reforms and economic progress boosting overall end-user confidence. Also, subsiding inflation and rapid growth of online trade coupled with the introduction of sub-$400 devices created just the right buzz for the PC business in CY 2014,” said Kiran Kumar, Research Manager, IDC.

The overall commercial PC market clocked 4.7 million units in CY 2014, with a year-on-year decline of -29.6% over CY 2013.

“The primary reason for the plunge was that barring fulfilments for ELCOT Phase III, the contribution of large education projects was not exciting in CY2014 as compared to CY2013. Also, enterprise users have been cautiously optimistic by pinning their hopes on the direction of reforms, which are still quite ambiguous. This is with the exception of BFSI, where IT spending returned to a rapid surge in CY 2014 for both capacity expansion and hardware refresh,” commented Manish Yadav, Market Analyst, IDC.‎
                                                                                            
Top 3 PC Vendor Highlights:

HP
HP recorded a market share of 25.6% in the India PC market and took the first spot yet again.

The vendor remains dominant in the consumer PC business for the third year in a row. Introduction of sub-$400 notebooks proved to be a shot in the arm as they continued to thrive in the consumer PC business, in both the desktop and notebook categories.

They have equally led the commercial segment in the last two years by clinching major volumes in special projects such as ELCOT/UP.

Dell
Post privatization, Dell’s focus on growing their business in emerging markets has been made evident and they have recorded substantial year-on-year gains in the India PC business.

They have outstripped the industry average as they gained around 9% year-on-year to record a 22.1% market share in CY 2014 in the overall PC business.

Their investments towards expanding channel strength continue to swell, supported by both distribution and partner led GTMs.

In addition, their growth in the tier 2 and 3 cities is  a welcome sign for increasing overall PC penetration.

Lenovo
Lenovo holds on to the third spot, with sizeable volume growth in both consumer and commercial segments.

They have gained 3.5 % year-on-year to record a market share of 15.8% in CY 2014 in the India PC business. Similar to their competitors, they have grown primarily through market consolidation supported by their strong marketing and channel engines.

In the short term, inventory issues and constrained buying from end users is likely to impact Q1 2015 sales.

However, IDC anticipates the overall PC market to witness growth in CY 2015 over CY 2014.

Special education projects and improved business sentiments in the enterprise business will continue to drive commercial PC volumes in CY 2015. Government and government aided education buying will hold the key to growth in the commercial PC business.

“On the consumer business, opportunity is ripe for vendors to drive penetration and improve overall business. We expect new entry level price points to be created for full-blown PCs with innovative form factors and that will continue to drive excitement in this category,” added Kumar