The mobile computer boom

Analysts and industry pundits forecast that the notebook market, which has been growing faster than the desktop market for the past three years, is expected to overtake the desktop market by Q4 FY2011-12. A fall in prices, large deals from governments and institutions, and demand from consumers and sectors such as education are expected to help the notebook numbers.
According to both IDC and Gartner, Q3 FY2010-11 saw notebook volumes rise, and for the first time a million-plus notebooks were sold in India in a single quarter. The research agencies put the notebook numbers at around 1.11 million. As per Gartner, desktops grew by 5 percent in Q3 FY2010-11 whereas notebooks grew by 41 percent as compared to the same quarter last year.
“The last quarter has been historic in many ways,” states Gopal Swaminathan, Director, Sales and Marketing, Intel India. “I remember in 2006 we were striving hard to do a million mobile processors in India for the entire year. The market has grown nearly four times for notebooks. The demand is driven by all sectors and a very buoyant consumer market, which is preferring mobile computers.”
Enterprises in India, both small and big, are in the midst of a technology refresh cycle. “Notebook numbers are helped by the fact that many SMB and enterprise entities are replacing their desktops with notebooks,” says Rajeev Mehta, MD, Zest Systems, Delhi.

Entry-level notebook prices have dropped below the Rs. 25,000 mark; this has helped break the ice with new customers. Acer, which has driven new price-points in notebooks for nearly a decade, created a new price bracket of Rs. 20,000 with its e-machines brand. Explains S Rajendran, CMO, Acer India, “For every thousand-rupee bracket in the sub-Rs. 25,000 market, you are creating a new set of aspirants who want to buy a computer, or who are willing to buy a notebook instead of a desktop.”
The drop in notebook prices has been helped by the drop in the prices of the building blocks that make a notebook. According to Display Research, which tracks key components such as LCD screens, the average price difference between mobile and desktop TFT screens was down to 2 percent in Q2 FY2010-11 from around 16 percent in 2008. Even in hard disk drives and memory, the price difference is less than 20 percent now—three years ago it used to be nearly double. “It’s simple. With notebook volumes growing, the prices of the components are also bound to come down,” points out Rajesh Khurana, Country Manager, India and Saarc, Seagate.
All this has resulted in a noticeable change in a number of large government tenders; these were traditionally for desktops, or notebooks plus desktops, but now they are mostly for notebooks. For example, the Kerala IT Schools tender, which was originally drafted for 20,000 notebooks and 50,000 desktops, was changed to an all-notebook order. The first tender for 15,000 netbooks and 12,000 notebooks was opened in early November. The next round is for 50,000 notebooks, and is expected to be completed around early February 2011.
Similarly, 17 states have earmarked purchases that will end up in the sale of almost 6,00,000 notebooks to the government and education sectors over the next nine months.
Credit needs to be given to the PC vendors who tried to grow the market by introducing niche products and models targeting specific user communities. In addition, vendors have been positioning notebooks as a fashion accessory, and investing in promotional campaigns with fashion brands and events. HP was a sponsor of Miss India 2010, and Dell launched a series of notebooks with shades matching the colors of nail-polish maker OPI.
“The launch of multi-color models complemented by aggressive promotions and discounted bundling schemes augmented consumer PC spend, especially in the portables segment,” comments Sumanta Mukherjee, Lead PC Analyst, IDC India. “Vendors have been quick to introduce new models that appeal to a young generation of PC buyers who are purchasing notebooks.”
Despite the home desktop market getting a new lease of life with the introduction of all-in-one PCs a year back, the volumes are said to be far from inspiring. Vendors have noted that notebooks are being purchased in place of the traditional multimedia home desktop. “Many first-time buyers are comfortable buying notebooks, especially young urban couples who are sharing a notebook at home,” says Amar Babu, Managing Director, Lenovo India.
Vishal Tripathi, Principal Research Analyst, Gartner India, predicts that in the second half of 2011 the Indian PC market will witness more notebooks being shipped than desktops. “In 2010, the ratio between notebooks and desktops for the first two quarters was 34:66; by Q3 FY2010-11 it had become 40:60. In India many first-time buyers are buying a notebook as their first PC. With value products and competitive prices, vendors are able to meet the expectations of price-sensitive buyers, and this is accelerating the growth of notebooks.”