Consumer PC sales holding up, but enterprise still down – IDC India

A strong performance in consumer laptops helped HP resist the onslaught of Acer and Lenovo in the third quarter and prevent a big erosion in its market share, according to the latest quarterly PC numbers from IDC.

Lenovo and Acer have benefited from the Tamil Nadu government’s massive program to distribute free laptops to students. Lenovo had snatched away HP’s PC crown, in part helped by the order. Dell, which was at one time the top PC maker in the country, has slipped to the fourth place.

Overall, PC sales were strong in the third quarter of 2012, but mainly because of robust consumer PC sales. Sales to companies was still down due to the overall downcast sentiment in the economy, IDC said.

Lenovo had a market share of 16.9%, followed by HP and Acer with 15.6% and 15.5% respectively. In an indication of the rising strength of brands, the three brands alone accounted for nearly half of the Indian PC market (48%).

Lenovo first became the top PC brand in India in the final quarter of 2011, thanks partly to the Tamil Nadu scheme.

“Fulfilments for the ELCOT Notebook project continued to drive Lenovo and Acer to take the top places in the India PC market respectively. HP sustained its dominance, specifically in the consumer PC market.

“Launch of new series of Notebooks in the entry and mid-price band segment, helped the vendor fuel its growth in Q3. Further, channel linearity and seasonality supplemented their marketing investments and channel engagement efforts to boost their growth in Q3 2012,” said Kiran Kumar, Sr. Analyst at IDC.

In terms of overall demand, however, it was a mixed story, with corporate sales continuing to be weak. However, consumer sales were still better than those of the second quarter, but flat when compared to a year ago.

Consumer PC sales rose 13.5% compared to the June quarter, but were down about 1% compared to a year ago.

“The Indian consumer continued to be resilient to challenges such as economic slowdown and high inflation,” IDC noted.

“Consumer demand for Notebooks is emerging as the sole bright spot in the India PC market, even as the Commercial PC market continues to be bucked down by economic slowdown. Uncertain investment environment continues to be a major letdown for commercial PC buyers who remained to be cautious with their spending in Q3 2012,” Kiran Kumar added.

The outlook for the festive season too was rather bleak.

“Despite having a well spread festive season in Q4, we expect the overall demand for PCs to be weaker and anticipate enterprise users to remain wary about their spending in Q4 2012,” said Venu Reddy, Research Director at IDC.

As people focus on items like TVs, PC sales may take a knock, he said. “A shift in the share of voice through ads and campaigns, for products such as TVs and other consumer goods is pretty evident owing to festive buying; And a fast approaching holiday season in the ending weeks of Q4 is expected to stall the growth of PCs in the coming weeks.”