Gartner: India PC market hit by low consumer interest

Indian consumers do not consider PCs to be a priority purchase

India's PC market was flat in the second quarter, reflecting the low importance Indian consumers attach to PC purchases, according to research firm Gartner.

The market was 2.5 million units in the quarter, up by 2.5 percent over the same quarter a year earlier, Gartner said on Wednesday. The growth rate in the previous quarter was 6.2 percent.

Inflation, particularly rises in food and fuel prices, reduced disposable incomes. But it did not hit as hard on purchases of consumer durables such as television sets and mobile phones, said Vishal Tripathi, principal research analyst at Gartner.

PCs just do not figure very prominently in the list of priorities of Indian customers, he said.

In contrast, India added about 11 million mobile phone subscribers in June, taking the total number of subscribers to 852 million, according to data from the Telecom Regulatory Authority of India.

Mobile phones are cheaper, and are also seen as a necessity, Tripathi said. Mobile phones may also be taking away PC business, as consumers who want to be on social networks like Facebook and Twitter find mobile phones to be a cheaper and more convenient option, he added.

Buying a PC involves a larger outlay, and customers usually use that as a pretext for deferring purchases, Tripathi said.

Consumers accounted for about 40 percent of PC sales in the second quarter. Business buying was also affected to some extent in the quarter because of high interest rates, Gartner said.

Dell led the market with a 16.7 percent share by shipments, followed by a 12.1 percent share for Acer, according to Gartner. Hewlett-Packard with 11.2 percent share lost its second place to Acer. The company, which is going through a major restructuring including in its distribution channel, was the second largest PC vendor in the country in the previous quarter, Tripathi said.

The growth in the market in the second quarter was primarily driven by the mobile PC market which grew 17 percent year-on-year, Gartner said. The research firm includes laptops, mini-notebooks, and ultraportable computers under this classification.

Except for HP, the major multinational brands, which account for over 50 percent of the market, posted double-digit growth in the quarter.

HP did not immediately respond to a request for comment.

PC sales are likely to pick up in the current quarter because of the local festival season, and unit sales may reach 3.0 million, Tripathi 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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