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Home / India / Small towns fuel PC boom: study

Small towns fuel PC boom: study

Smaller towns will handhold the industry to close FY 06-07 with sales of 6.5 million desktop and about a million laptops, reports Prerna K Mishra.

india Updated: Feb 01, 2007, 03:34 IST
Prerna K Mishra
Prerna K Mishra

More than a billion Indians may be making do with 20 million personal computers, but things are set to change: Tier-two and three cities have joined the network, and are fuelling demand.

Smaller towns will handhold the industry to close FY 06-07 with sales of 6.5 million desktop and about a million laptops, it is projected.

Nearly 58 per cent of the 2.96 million PCs sold in the first half of the financial year came from smaller towns — a significant jump given that they contributed less than five per cent to the total sales in 1998-99.

In fact, the lower SEC B and C account for close to 50 per cent of the household PC market, having gone up from 6 per cent in 1999-2000. Total sales rose 19 per cent over the same period in FY05-06, according to bi-annual MAIT Industry Performance Review — ITOPs — conducted by research firm IMRB International.

And the price sensitive consumer in these smaller towns is buying more from the next-door assembler and not branded products. The proportion of Indian brands to the total sales fell from 31 to 23 per cent — a year-on-year decline of 20 per cent during H1. MNCs registered a 14 per cent growth over the same period last year.

Assembled, regional and unbranded systems witnessed a growth of over 27 per cent in absolute unit sales and with the market share touching 40 per cent. The study, nineteenth in the series, involved face-to-face interviews with over 24,500 respondents selected randomly from 22 cities in India.

“The sale of notebooks has been a great enabler in the increased offtake of PCs in the HI. The proportion of notebooks in the overall PC sales accounted for over 15 per cent in H1 2006-07 compared to 6 per cent a year ago,” according to MAIT executive director Vinnie Mehta.

The number of active Internet entities increased to 5.27 million units in September 2006 from 4.12 million units in March 2006. Internet penetration in the top 22 cities was 45 per cent among businesses and 14 per cent among households. The businesses segment now accounts for 33 per cent of the total active Internet entities (entities are establishments or individuals with Internet connection; an entity could house multiple users) and households account for the remaining 67 per cent. 

“The internet entities having a broadband connection have gone up from 12 per cent in September 2002 to 38 per cent,” said MAIT president Mukul Singhal.

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