HP regains top position in India's PC market

Dell had taken the lead for the first time over HP in the second quarter of 2010

Hewlett-Packard regained the top position in India’s PC market in the fourth quarter of last year, after falling behind Dell in the previous two quarters, according to data released by research firms Gartner and IDC India.

HP has held the top position in the country since 2005, according to IDC India.

The company had a 17.3 percent share of the market in the fourth quarter as compared to Dell’s 14.2 percent share, and Acer’s 11.5 percent share, IDC India said on Wednesday.

Gartner has also placed HP ahead of Dell in the fourth quarter. HP regained market share because of a new distribution strategy, and a new sales team for enterprise and small and medium business, said Vishal Tripathi, principal research analyst at Gartner.

Dell still gets more of its business from the corporate market than HP, which is also strong in consumer, said Sumanta Mukherjee, lead PC analyst at IDC India. The growth in business from the corporate sector in the fourth quarter was slower than in the consumer market and other segments like the public sector, he added.

HP also appears to have stabilized its channel strategy, after it moved from a national distribution model to a network of regional distributors, Mukherjee said. The new channel strategy is much more structured now, and has helped HP get more partners which has translated into improved sales, Tripathi said.

Dell took the number one slot for the first time in the Indian PC market from HP in the second quarter, after doing well across all market segments. But Dell may have gained an edge over HP also because of disruptions in HP's consumer business as the company changed its distribution model, analysts said.

Dell appeared undisturbed about losing market share to HP in the fourth quarter. The company does not sacrifice profits for market share, and is not going after every deal, a spokeswoman for Dell said on Thursday. The company is also focusing more on deals that involve selling Dell’s hardware with software and services, to drive up profitability, she added.

Some variations in market share from quarter to quarter will also arise because of changes in the inventory in the channel, particularly in the consumer business, the spokeswoman added.

Dell reported on Wednesday that its revenue from India in its fiscal fourth quarter had grown by 37 percent over the same quarter in the previous year. Revenue from its consumer business rose 47 percent, while revenue from its public sector business grew 41 percent, and its small and medium business increased 52 percent.

PC shipments by vendors in India touched 2.5 million units during the fourth quarter, recording a 26 percent increase over the same quarter in the previous year, despite high inflation and low industrial growth rates, IDC said.

Shipments in the fourth quarter dropped 11 percent compared to the previous quarter because of seasonality in consumer demand, and a winding down of pent-up demand by the corporate sector, Mukherjee said.

Gartner has a more conservative estimate of growth in India's PC market. Nearly 2.7 million PCs were shipped in the fourth quarter of 2010, a 16.2 per cent increase over the fourth quarter of 2009, it said.

John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is john_ribeiro@idg.com

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