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December 23, 1998


Christmas pie: 'Twas the night b'fore Christmas, and all through the shop / The computers were whirring; they never do stop. / The power was on and the temperature right, / In hopes that home PC buyers would troop in that night.

Priya Ganapati in Bombay

Email this story to a friend. Bombay based Zenith Computers has emerged as the single largest brand in the home market during April-September this year and HCL has retained its overall leadership. And most importantly, the grey market share continues to slip.

That's what the findings of a bi-annual industry survey by the Indian Market Research Bureau tell us.

But wait a minute! Haven't we heard this before... A few months ago? Correct me if I am wrong. I think it was at the Directions 99 seminar of IDC India.

Well here is another expensive survey telling us the same thing all over again. But well it is the season to forgive...

(Psst: insiders will tell you that IDC is perceived as a survey doctored by the multinational brands and IMRB's figures are what the desi brands are more comfortable with).

Well, the latest IMRB figures say HCL leads with a 12.3 per cent share followed by Compaq with 9.6 per cent, and then Zenith and IBM.

IMRB Vice-President Bhupendra Mathur has been reported to have claimed that the "The survey has been able to pick up facts that can help companies prepare a blueprint for resource planning and carry out a midcourse correction if the facts call for it."

"Until now IT companies have had some idea about the big corporations. But when it comes to the small and the medium-size offices there is no data on them," he has claimed.

He points out that "Three fourths of business establishments have under 10 employees and occupy less than 1,000 square feet of office space and that one out of five are located in residential areas and one out of three are in shopping complexes!"

ITOPs '98 is a syndicated study conducted by the IMRB as background work for the bi-annual survey. It is co-sponsored by the Manufacturers Association for Information Technology.

ITOPs point out that the emerging household market is the most price-sensitive of all market segments.

This is evident from Zenith's performance. The company has been offering attractive price schemes in the past few months.

Zenith is ahead than any other company in the established brands. However, the survey says that Wipro has the highest awareness among intending buyers in households due to the aggressive campaign it has embarked upon.

However, in the overall market, HCL continues to enjoy the "highest awareness".

IT companies can benefit from other striking facts that the survey has identified: Nearly a third of the household markets is still going for 386/486 machines and "pure households" are the second most important segment after "offices", ahead of factories, outlets, government and home offices.

Two thirds of the sales in this segment are to households with employed professionals as the chief wage earner. The balance is to the self-employed.

The "most affluent" accounts for half the volume of PC sales in the home segment. Sixty per cent of the sales in this sector took place in the first quarter in contrast to the business sector that shows a reverse trend of higher sales in the second quarter.

Also, MAIT Director Vinnie Mehta told Rediff "I think the growth is a little less than what had been envisaged. But this is a reflection of the poor performance of the economy.

"We have been waiting for the implementation of the report on hardware that was submitted by the Prime Minster's Task Force of Information Technology. I think with the implementation of this report the scenario will change for good."

He expects the implementation to happen in early January.

The survey says that the share of the assembled brands has dropped but continues to account for 48 per cent of the market.

Mehta is quick to comment on that. He feels "I think this is an unhealthy finding. Personally, we would be comfortable if the share of the grey market is around 15 per cent. We hope that with the implementation of the report of the task force, the duty on all imported parts and components will come down to zero. This would bring the branded segment on par with the assembled market."

With this Mehta, hopes that the price of an average, entry-level PC will plummet to Rs 20,000!

He believes that the single most important trend that has emerged from the bi-annual survey is that the home market is set for a boom. And the Internet will drive the home market sales.

During this April-September period, the upgradation of PCs was about 5.5 per cent of the installed base, putting the total chip sales at above 600,000 for the full year.

ITOPs '98 estimates the market for PCs at 460,000 machines. According to Mathur "The top four metros account for 310,000 PC sales of the all-India market."

But there is a noticeable shift of demand to nine other cities that follow in terms of size, town class, etc.

To find out the penetration of IT products, the survey made 54,000 personal contacts in 23 cities, all of which had a population of over 100,000.


Science and prescience
IDC India made mathematics do some astrology at Directions 99. Rediff sifts out the essentials.

1.8 / 1,000
Figures don't cloak India's poor PC penetration. But there are kinder numbers in MAIT's first survey.

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