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IT Industry Performance Annual Review: 2008-09

Press Conference
New Delhi: July 14, 2009
The Longest The Largest
• Conducted in Top 22 cities of India.
• Findings projected to All India urban
• Tracking the Indian IT Hardware
market for over 12 years. Market.

•Covers a sample of
14,000 + Households
10,000 + Establishments

•Completed 24 successful rounds


• Conducted twice a year
of the study.
H1 FY: Apr to Sept.
H2 FY: Oct to March
Factors in Market/customer
•Data is collected after the last mile


sentiments

Complete & Accurate Profile of the buyers.


Identification of key market trends and emerging segments helps in identifying
market expansion opportunities.
Captures changes in users perspective to give cues for innovative marketing.
Gauge buying and usage behavior to give cues for product development.
Accurately gauge the extent of replacement and up gradation taking place.
Accurate data
A two pronged approach involving primary surveys among end user and validation of
the data from vendors and channel ensure accuracy of the findings.
Equal focus on all segments
Equal focus given to Household, SOHO and Establishment segment, thus giving a
complete understanding of the entire marketplace.
Actionable insights
Reports can be customized as per Key Business Matrices to provided the much needed
actionability of the research findings.
Regular market feedback
Bi-annual reports along with the quarterly channel feedback provide a regular assessment
of the dynamic Indian IT hardware market. It also provides cues for necessary course
correction if required.
ITOPS – Sampling & Projections

Household
 Using SEC A-C household population as obtained in the National Readership
Survey – the largest household survey in the country
Establishment
 No framework for sampling and projection were available
 Thus, a new framework called Ace Grid was developed by the ITOPS team
 This Grid stratified the establishments by Principal activity performed at the
establishment classified by number of employee.

Principal Activity defined No. of employees defined


 Manufacturing/ factory/ Warehouse
 Office  < 10 employees (Small establishment)
 Outlets  11-50 (Medium establishments)
 Government  50 + (Large establishments)
1.Computing products 2.Printers 3.Peripherals
UPS, Keyboard, Monitor

DMP

Desktop PCs

LCD projectors,

IJP
 
Notebooks
Webcam
LJP

Server


Scanner, Zip Drive
MFD

Thin-Client Workstation

OA (FAX, Photocopiers)

4.Networking Products 5.Storage 6.Software

NIC, Hubs, Modems



SAN

LAN Packages
 
NAS

Customized

Intranet/Extranet/Internet

DAS

Wi Fi

And the findings are…..
Total PC (Desktops & Notebooks) sales: 2003-2009
Units

• CAGR 2003-09: 17 %
• Growth over 2007-08: - 7 %

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Total PC (Desktops & Notebooks) Quarterly sales
Units

 FY 2008-09: Sales lowest in OND 2008, sales improved in JFM by 16% (Q on Q)

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Total PC market: Regional spread
7,334,306 Units 6,796,587 Units

 2007-08  2008-09

• PC consumption in West and the East grew by 12% and 18% respectively; in North
and in South it declined by 34% and 22% respectively

10
Units
Notebook (including net books) sales: 2003-2009

 Annual sales declined 17% compared to 2007-08; CAGR: 76%

 Over 73K Net-books sold in 2008-09

 H1/2008-09 accounted for 51% of the consumption, while H2 for 49%

 Households accounted for 51% of the market declining 3%, Businesses accounted for
49% of the market declining 27% on an annual basis
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Notebook sales: City-spread

• Notebooks are fast penetrating beyond the top 4 metros


• Consumption in top 4 metros declined 39%, in next 4 by 19%and in rest of
India by 9%.

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Units
Notebook sales in Businesses & Households

• Overall Notebooks market declined 17% 2008-09


• Households accounted for 51% while Businesses accounted for 49% of the Notebook
sales in 2008-09
• Consumption in Establishments declined 27% and in Households by 3%
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Notebook Consumption in Businesses - by employee size
% Units

• Overall consumption in the business declined 27%


• Consumption in large and small enterprises declined by 47% and 53%
respectively, in medium enterprises it grew 27%

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Profile of Notebook buyers: Principal activity of the establishment
% buyers

• Sales in Establishment: H1/2008-09 accounted for 54% while H2 for 46%


• Over 6 folds increase in Govt. consumption
• Consumption in retail outlets grew by 42% and in factory & Office segments it
declined by 54% & 46% respectively.
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Desktop sales: 2003-2009
Units

• Growth over 2007-08: - 4%; CAGR 2003-09: 12%


• H1/2008-09 accounted for 55% while H2 for 45% of the desktop sales

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Desktop Market: Share of Indian, MNC & Informal

• Sales of MNC Brands grew by 8%


• Consumption of Indian brands decreased 22% in absolute terms and that of
assembled by 10%

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Desktop sales: City-spread

• Consumption in Top 4 metros increased by 5%, in next 4 it declined by 44%,


while in other smaller towns it remained flat.

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Desktop sales in Businesses & Households

Home Business Total DTPs

6,000,000 5,490,591 5,522,167


5,279,648
5,000,000 4,614,724
74%
4,000,000 3,632,619 75% 60% 66%
3,035,591
3,000,000 72%
77%
Units

40%
2,000,000 34%
26%
28% 25%
1,000,000 23%

0
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

• Desktop market declined by 4% over 2007-08


• Consumption in Establishments grew by 5%; in Households it declined 18%

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Annual Desktop sales: Business by employee size
% Units

• Overall sales to the Business segment grew by 5%.


• Sales to small, medium and large enterprises grew by 3%, 17% and 2%
respectively.

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Profile of Desktop buyers: Principal activity of the
% buyers establishment

• Sales in Establishment: H1/2008-09 accounted for 59% while H2 for 41%


• Consumption in Government grew by 35% , in retail outlets by 31% and in factory
locations by 17%; Consumption declined in office locations by 1%

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Profile of Desktop buyers in Households by Socio-economic class
% buyers

• Households consumption: H1/2008-09 accounted for 49%, H2 for 51%;


Overall consumption declined 18% over 2007-08
• Consumption in SEC A declined by 26%, in SEC B by 19% and in SEC C it
remained flat

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Server sales: 2003-2009
Units

• Annual sales declined: 2%; CAGR (for 6 years): 19%

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Server sales: Business by employee size
% Units

• Overall declined 2%
• H1/2008-09 accounted for 61%, while H2 accounted for 39% of server sales.
• Sales to small and medium enterprises declined by 1% and 29% respectively,
however in large establishments it grew 35%

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Server sales: City-spread

• Consumption in Top 4 metros grew 96%,it declined 78% in next 4 cities and
4% in the other smaller towns and cities.

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Active Internet entities: March’09
Translates
to 60
million
internet
users
’000 Units

(Entities are establishments/individual with internet connection; an entity may house/ be multiple user/s)

• Overall entities with internet grew by 20% over March 2008


• Businesses accounted for 28% of the entities growing 14% while Households
accounted for 72% growing 22%

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Internet penetration: March 2009

• Internet Penetration by Town class and Socio-Economic Classification (SEC) among


Top 22 Cities

Business Segment Home

Overall 47% 24%


Internet Top 4 Metros 52% 28%
penetration by
Town class Next 4 Metros 40% 20%
Other 8 Metros 47% 20%
Remaining 6 Metros 32% 14%

SEC A SEC A - 50%


Internet
SEC B -
penetration among
households by SEC SEC B - 19%
SECSEC C - 7%

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Mode of Internet access in Businesses: March 2009

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The Market of 2007-08 Vs 2006-07

Total installs Total Revenue (in Rs Crores)

% %
Product 2007-09 2008-09 2007-08 2008-09
Growth Growth

Computers

Desktop PCs 5,522,167 5,279,648 -4% 10,216 10,325 1%


Notebooks 1,822,138 1,516,459 -17% 7,289 5,886 -19%
Servers 122,178 119,591 -2% 2,016 1,886 -6%

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The expected Market for 2009-10

Total Sales

2008-09 2009-10 % Growth

Desktops 5,279,648 5,400,000 2%

Notebooks 1,516,459 1,900,000 25%

Total PC 6,796,107 7,300,000 7%

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Thank you!

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