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Consumer PC market falls 14% in Q2 2019; commercial sales drive overall growth

The consumer PC sales in India fell 14% year-on-year (YoY) in Q2 2019, according to a report by the International Data Corporation (IDC). However, overall PC segment registered a strong 49.2% YoY growth driven by commercial sales. “Strong performance from the SMB sector and corporates because of Windows 10 refresh coupled with a strong performance from the BFSI sector and increased global refresh orders helped commercial segment stay positive,” said Bharath Shenoy, Market Analyst, PC, IDC India.

IDC said deal fulfilment by Electronics Corporation of Tamil Nadu Limited (ELCOT), where it plans to distribute 1.5 million laptops to students, was behind the robust growth.

According to the report, notebook category sales grew 81% YoY, thanks to the ELCOT deal and contributed 74.3% to the overall “traditional PC market” in India. The ultra-slim laptop category, with a share of 21.1% of the total notebook category, grew 92.7%.

IDC said the “overall pessimism” of the previous few quarters remained in April-June and the expected revival after the elections were sub-par. Here, the online channels “picked up towards the end of the quarter”, whereas the footfalls in Large Format Retail (LFR) stores and branded shops remained low. “Back to school” campaigns also yielded less than expected results. These are campaigns where companies target school and college going students during when the educational session begins.

Unsurprisingly, the gaming PC segment in India registered a 41.1% growth in India, which has been the trend for a while now. In an earlier interview with Mint, P. Krishnakumar, senior VP and GM of Asia Pacific at Dell, had said the gaming segment was driving sales for the overall PC segment in India. The same has been said by companies like Lenovo, HP and more.

IDC called the gaming segment a “bright spot” in the struggling consumer PC market. Though the overall PC market grew 108% in Q2 2019, the overall shipment of 2.43 million units was driven by the 1.11 million units coming from the ELCOT deal. The commercial market did well even outside the ELCOT deal, according to IDC, registering a 12.6% YoY growth.

Lastly, the traditional PC market in India is being led by Lenovo with a 46.2% market share overall. The company registered a 283% growth in the commercial segment because of the ELCOT deal and also “fared well” in the BFSI (Banking Financial Services and Insurance) and education segments. However, even the market leader faced a YoY decline of 14% in the consumer segment.

On the other hand, HP registered 22.4% market share, posting a strong quarter in both commercial and consumer segments in Q2 2019, but fell behind Lenovo at number two. IDC said Dell had a weak quarter because of credit issues in tier 2 and 3 channel partners and took the third spot in April-June.

IDC expects the traditional PC market in India will continue to fall in Q3 2019 while the commercial market is expected to grow because of government and education projects that are yet to materialise.

Source: Livemint