India PC shipment to hit 12.5M in 2012

Government initiatives to give laptops to students help prop local PC market, but rising inflation and cost of living to soften consumer demand in coming months, states report.
Written by Kevin Kwang, Contributor

PC shipments in India are expected to grow 17 percent to 12.5 million this year, aided by state initiatives to provide students with laptops. However, inflation, cost of living and growing smartphone penetration will dampen consumer demand.

Gartner issued a statement Wednesday stating that the India PC industry is benefiting from the state government deal inked in Tamil Nadu to provide laptops to students in state-aided colleges and high schools. This adds an approximate 920,000 units to total shipments for 2012 and will be a major factor for the market's double-digit growth, it said.

That said, the research firm noted that high inflation, increased cost of living, and growing smartphone penetration are compelling consumers to hold off replacing existing computing devices with newer models.

"Consumers are not very enthusiastic about investing in new and advanced features and form factors which comes at a premium price," added Vishal Tripathi, principal research analyst at Gartner, in the report.

Ultrabooks, Windows 8 impact unknown
The report also stated that while ultrabooks are appealing in terms of its looks, style, battery life and being lightweight, its current price point is not going to be "persuasive" to Indian consumers, who are mainly driven by cost over technology innovations.

"It remains to be seen whether Windows 8 and ultrabooks will create the compelling offering that will get the early adopter of devices excited about PCs again," Gartner stated.

It also noted that certain enterprise sectors such as fast-moving consumer goods (FMCG) and banking, financial services and insurance (BFSI) are opting for tablets for their front-end sales force and adoption will be higher than 2011. However, this device category will not have "major impact" on PC shipment as it is still the second or third device choice for consumers, it added.

Tripathi pointed out that uncertainty in the global economy might soften IT spend on PCs in the coming months even if spending among large enterprises may remain stable for some time.

"Consumers were waiting for the annual budget with the hope of some cuts in PC prices, but with the increase in excise duty, the cost of PCs will go up," he noted. "This will result in some slack in consumer demand in the months to come."

The research firm had earlier stated that PC shipments in Asia-Pacific reached 30.4 million units in the fourth quarter of 2011, which represented a growth of 8.5 percent year-on-year. It was, however, below the projected 10.6 percent growth, with the weaker showing attributed to slowdown in China, India and Thailand, the report noted.

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