IT Industry Performance Annual Review: 2009-10

Press Conference
New Delhi: July 28, 2010
 The Longest The Largest
• Conducted in 17 cities of India.
• Findings projected to All India urban
• Tracking the Indian IT Hardware
market for over 12 years. Market.

• Covers a sample of
8,500 + Households
6,500 + Establishments

• Completed 26 successful rounds • Conducted twice a year

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

Desktop PCs DMP UPS, Keyboard, Monitor

   

   
   

Notebooks IJP LCD projectors, Webcam

Server LJP Scanner, Zip Drive
Thin-Client Workstation MFD OA (FAX, Photocopiers)

4.Networking Products 5.Storage 6.Software

NIC, Hubs, Modems

   

SAN
  

LAN Packages

 
NAS
Intranet/Extranet/Internet Customized
DAS
Wi Fi
And the findings are…..
 Total PC (Desktops & Notebooks) sales: 2004-2010

8,034,556
8,000,000 7,344,306
6,796,107
7,000,000 6,341,451
6,000,000
5,046,558
5,000,000
3,809,724
4,000,000
3,000,000
Units

2,000,000
1,000,000
0
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

• CAGR 2004-10: 16 %
• Growth over 2008-09: 18 %

8
 Total PC (Desktops & Notebooks) Quarterly sales

2,500,000
2,294,931
2,076,177 1,996,026 2,022,701
2,000,000
1,668,286 1,720,898
1,615,999
1,500,000 1,436,125

1,000,000
Units

500,000

-
AMJ 08 JAS 08 OND 08 JFM 09 AMJ 09 JAS 09 OND 09 JFM 10

 FY 2009-10: Sales lowest in JAS 2009, sales improved in JFM 2010 by 38% (Q on
Q)

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 Notebook (including net books) sales: 2004-2010

3,000,000
2,508,564
2,500,000

2,000,000 1,822,139
1,516,459
1,500,000
Units

1,000,000 850,860

431,834
500,000
177,105
0
2004 -05 2005 -06 2006 -07 2007 -08 2008 -09 2009 -10

 Annual sales increased 65% compared to 2008-09; CAGR: 70%

 Over 185K Net-books sold in 2009-10
 H1/2009-10 accounted for 44% of the consumption, while H2 for 56%
 Households accounted for 56% of the market growing at 83%, Businesses
accounted for 44% of the market growing at 47% on an annual basis
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 Notebook sales: City-spread

Top 4 Next 4 Rest of India

100%
24% 18%
80% 36% 7%
47% 7%
68%
60% 6%
10%
40% 75%
69% 4%
58%
20% 43%
29%
0%
2005-06 2006-07 2007-08 2008-09 2009-10

• Consumption in top 4 metros grew by 173%, rest of India by 48% , however

consumption in Next 4 cities declined by 16%.

11
 Notebook sales in Businesses & Households
2500000 H o u se h o ld s
E sta b lish m e n t
2000000
1 ,4 0 9 ,7 8 5
1500000 7 9 4 ,9 4 2
7 6 9 ,7 6 0
Units

1000000
3 1 8 ,4 8 6
500000 5 5 ,2 5 7 1 ,0 2 7 ,1 9 7 1 ,0 9 8 ,7 7 9
2 2 ,0 11 7 4 6 ,6 9 9
3 7 6 ,5 7 7 5 3 2 ,3 7 4
1 5 5 ,0 9 4
Units

0
2 0 0 4-0 5 2 0 0 5-0 6 2 0 0 6-0 7 2 0 0 7-0 8 2 0 0 8-0 9 2 0 0 9-1 0

• Overall Notebooks market grew by 65% in 2009-10

• Households accounted for 56% while Businesses accounted for 44% of the Notebook
sales in 2009-10
• Consumption in Households grew by 83% and in Establishments by 47%

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Notebook Consumption in Businesses - by employee size

Larg e M e diu m S m all

100%
80% 32%
52% 47% 43% 44%
56%
60%
40% 22% 29% 50% 35%
27% 25%
% Units

20% 31%
21% 19% 28% 18% 21%
0%
2 0 0 4-0 5 2 0 0 5-0 6 2 0 0 6-0 7 2 0 0 7-0 8 2 0 0 8-0 9 2 0 0 9-1 0

• Overall consumption in the business increased by 47%

• Consumption in large and small enterprises increased by 102% and 72%
respectively, in medium enterprises the growth was flat at 1%.

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 Profile of Notebook buyers: Principal activity of the
establishment
G ovt. Locations O utlets Office locations F actory locations
1% 1% 2% 5%
100% 7% 9% 6% 7% 20% 12%
80%
13%
% buyers

60%
70% 84%
81% 88%
40% 62% 82%

20%
23%
0% 10% 5% 8% 5% 1%
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

• Sales in Establishment: H1/2009-10 accounted for 39% while H2 for 61%

• Consumption in offices grew by 73% and in factory, & outlets segments it grew by
1% & 17% respectively.
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 Desktop sales: 2004-2010

6,000,000 5,525,992
5,490,591 5,522,167
5,279,648
5,000,000 4,614,724

4,000,000 3,632,619

3,000,000

2,000,000
Units

1,000,000

0
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

• Growth over 2008-09: 5%; CAGR 2004-10: 9%

• H1/2008-09 accounted for 47% while H2 for 53% of the desktop sales

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 Desktop Market: Share of Indian, MNC & Informal

100%
80% 37% 38% 33% 31% 27%
60%
35% 39%
40% 45% Informal
51% 52%
20% 28% MNC
23% 22%
0% India
18% 21%
2005-06
2006-07
2007-08
2008-09
2009-10

• MNC Brands accounted for the largest share, sales grew by 7%

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 Desktop sales: City-spread
Top 4 Next 4 Rest of India
100%
23 25 31
80% 38 33 32
12 7
8 8
60% 11 13

40%
60 65 68 61
51 54
20%

0%
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

• Consumption in Top 4 metros increased by 30%, in next 4 by 21%, while in

other smaller towns it declined by 61%.

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 Desktop sales in Businesses & Households

Home Business Total DTPs

6,000,000 5,490,591 5,522,167 5,525,992
5,279,648
5,000,000 4,614,724

4,000,000 3,632,619 74%

66%
3,000,000 75% 60% 58%

2,000,000 72%
Units

40% 42%
34%
1,000,000 26%
28% 25%
0
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

• Desktop market increased by 5% over 2008-09

• Consumption in Households grew by 30% while that in Businesses declined
8%
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 Annual Desktop sales: Business by employee size
Large Medium Small
100%

80% 43
47 48
57 55
70
60%

40% 31 28 42
25 27
% Units

20% 18
22 24 18 18
12 15
0%
2004 -05 2005 -06 2006 -07 2007 -08 2008 -09 2009 -10

• Overall sales to the Business segment in 2009-10 Declined by 8%.

• However, H2 2009-10 signaled recovery for this segment as the sales grew
by 25% during this period over the corresponding period in last year.
• Sales to small and large enterprises declined by 24% and 28% respectively,
while that in Medium enterprises grew by 43%.
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 Profile of Desktop buyers: Principal activity of the
establishment
F a cto ry loca tion s O ffice locatio n s O u tlets G o vt. Lo ca tion s
10 0% 3% 3% 6% 8%
1 0% 9%
7% 12 % 7% 6% 7% 4%
8 0%
% buyers

6 0%
7 9% 7 4% 8 4% 8 1% 7 7% 8 1%
4 0%

2 0%
10 % 11% 6%
0% 3% 5% 6%
20 04-0 5 20 05-0 6 20 06-0 7 20 07-0 8 20 08-0 9 20 09-1 0

• Sales in Establishment: H1/2009-10 accounted for 43% while H2 for 57%

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Profile of Desktop buyers in Households by Socio-economic class
SE C A SE C B S EC C
100%
21% 16% 20% 18% 22% 29%
80%
29%
28% 36% 39%
60% 39%
42%
40%
% Units

51% 55%
20% 44% 43%
% buyers

39%
30%
0%
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

• Households consumption: H1/2009-10 accounted for 53%, H2 for 47%;

Overall consumption grew 30% over 2008-09
• Consumption in SEC A remained flat, while that in SEC B & SEC C grew by
40% and 72% respectively.
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 Server sales: 2004-2010

140,000
122,178 119,591
120,000
101,827
100,000 89,161 90,189
Units

80,000

60,000 49,165

40,000

20,000

0
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

• Annual sales declined: 15%; CAGR (2004-2010): 3%

22
 Server sales: Business by employee size
Large Medium Small
100%
22 16
26 26
80% 35
55
60% 34 42
39 37
27
40%
23
% Units

20% 44 37 38 42
35
22
0%
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

• Overall sales declined by 15%

• Growth in H2 2009-10 over H2 2008-09: 14%
• Sales to small and large enterprises declined by 6% and 61% respectively,
however in medium establishments it grew 32% in 2009-10 over the last year.

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 Server sales: City-spread

Top 4 Next 4 Rest of India

100%
22 19
80% 36 35 43 6
55
7 26
60% 16 6
% Units

40% 9 75
58 52 51
20% 48
36
0%
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

• Consumption in Top 4 metros declined by 62%, It declined 15% in next 4 cities

and grew by 25% in the other smaller towns and cities.

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 Networking products sales - Establishments

Units
• In 2009-10, NIC market declined by 12% on account of slower Desktop
offtake among the Establishments.
• Modems & Hubs registered a growth of 18% & 2% respectively.
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 Printers – DMP, Inkjet & Laser

1,600,592 1,721,789
1,617,656
1,493,507
Units

2009-10 over 2008-09:

• Total Printer sales registered a growth of 6%

• Consumption of Laser printers & Inkjet printers grew by 11% & 8%

respectively while that of Dot Matrix Printers declined 3%

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 UPS consumption: Yearly trend

Units

2009-10 over 2008-09:

• UPS Sales registered a growth of 53%, driven by the strong sales of DTPC among the
Household segment.
• Household consumption accounted for 70% of market, whereas Businesses accounted for
another 30% in terms of Units.

27
 Sales of other peripherals
Units

• Market for Keyboards and Monitors grew by 8% & 5% respectively over

2008-09.

28
Monitor market by size

2008-09 2009-10

Units: 5,490,425 Units: 5,754,091

• Overall growth over 2008-09: 5%

• Growth in consumption of 20”/21”, 17” by 9% & 12% respectively; decline in
consumption of 14” by 30% .

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 Active Internet entities: March’10
Entities 10,068
10500
8,600
9000
7,200
7500 6,009
6000 4,124
4500
’000 Units

3,127
2,504
3000 1,848
1,456
1500 1,127
651

0
Mar Mar Mar Mar Mar Mar Mar Mar' Mar' Mar' Mar'
'00 '01 '02 '03 '04 '05 '06 07 08 09 10

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

• Overall entities with internet grew by 17% over March 2009

• Businesses accounted for 26% of the entities growing 11% while Households
accounted for 74% growing 19%

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 Internet penetration: March 2010

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

17 Cities

Business Segment Home

Overall (17 Cities) 53% 21%

Internet Top 4 Metros 55% 25%
penetration by
Town class Next 4 Metros 46% 15%
Other Towns 39% 14%

Internet
SEC A - 38%
penetration among SEC B - 17%
households by SEC
SEC C 9%

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Mode of Internet access in Businesses: March 2010

32
 The Market of 2009-10 Vs 2008-09
Total installs Total Revenue (in Rs Crores)

Product April 08 – March April 09 – March % Growth April 08-March 09 April 09-March % Growth
09 10 10

Computers
Desktop PCs 5,279,648 5,525,992 5% 10,325 11,267 9%
Notebooks 1,516,459 2,508,564 65% 5,886 9,577 63%
Servers 119,591 101,827 -15% 1,886 1,836 -3%
Printers
Dot matrix 393,951 383,597 -3% 263 257 -2%
Inkjet 751,683 812,310 8% 155 177 14%
Laser 472,022 525,882 11% 594 660 11%
Line 5,274 4640 -12% 60 54 -10%
Other Peripherals
Key boards# 5,333,717 5,756,923 8%
Monitors 5,490,425 5,754,091 5%
UPS systems# 1,518,433 2,324,480 53%
Networking Products
Network Interface Card# 3,912,191 3,454,721 -12%

Hub# 159,178 161,602 2%

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 The expected Market for 2010-11

Total Sales

2010-11 2009-10 % Growth

Desktops 6,200,000 5,525,992 12%

Notebooks 3,150,000 2,508,564 26%

Total PC 9,350,000 8,034,556 16%

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Thank you!

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