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.”