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IT Industry Performance: Mid-Year Review 2002-03

IT Industry Performance: Mid-Year Review 2002-03. Press Conference New Delhi: January 10, 2003. I tops 2002 pro28. Eleventh in the Itops series of end-user surveys on IT hardware since 1996-97 With this : Six year time series database Annual trend for 6 consecutive years

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IT Industry Performance: Mid-Year Review 2002-03

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  1. IT Industry Performance: Mid-Year Review 2002-03 Press Conference New Delhi: January 10, 2003

  2. Itops 2002 pro28 • Eleventh in the Itops series of end-user surveys on IT hardware since 1996-97 • With this : Six year time series database • Annual trend for 6 consecutive years • Half-yearly trend for 9 consecutive periods

  3. Itops 2002 pro Coverage • Uniform methodology since 96-97 to facilitate comparison • Nearly 14,000 face-to-face interviews conducted in this round • Study represents ‘All India Urban Market’ • Sample allocation and universe projections extremely reliable and robust

  4. Itops 2002 pro Target group • Establishment having at least one telephone line. • 8000+ establishments covered • Establishments classified as per ACE (Principal activity performed at the establishment classified by number of employee) grid for representative sampling • Activities: • Manufacturing/ factory/ Warehouse • Office • Outlets • Government • Number of employees: • Less than 10 employees (Small establishments) • 10-50 (Medium establishments) • 50 + (Large establishments) Most robust way to project establishment information to the universe

  5. Itops 2002 pro Target group • Household – SEC A/ B (refer shaded portion in the grid below • Up market 6000+ households covered

  6. What is unique about the Itopsstudy design? • Data collected after ‘last mile’ - From location of installation • No undercounting/over counting of goods in transit as in shipment data • Includes direct imports by customers • Validation of the estimates based on Vendor data • Accurate assessment of ‘who’ bought and ‘where’ used • Not dependent on ‘perceptions’ of reseller/channel member/vendor • Emerging segments clearly identified as they ‘emerge’ • Acceptance of technology products depends on customers preparedness to accept them and innovative marketing by Vendors. • Thus need to monitor customer end-user perspective and obtain cues for innovative marketing • ITOPS meets this need by providing “Proactive” Market tracking rather than ‘reactive’ • Estimates most reliable and accurate as no vested interest to distort figures • Inputs from demand and supply side considered for final estimates • No vendor controversy

  7. 6½ year time series database-how does it help? • Validating figures through past trends • Forecasting accuracy • Identifying emerging trends

  8. Itops: Comprehensive coverage Product coverage: Computers - Desktop PC, notebooks, servers Printers - DMP, IJP, LJP Peripherals - Monitors, keyboard, scanner, zip drive, CD writer, Print server UPS - UPS, battery Networking - Incidence, size of networking (no. of nodes) Networking prod - NIC, hubs Internet - Active internet subscribers, modems

  9. And the findings are …

  10. PC Shipments: Half-yearly Comparison Units • 18% growth over H1/2001-02 • 10% growth in sales over H2/2001-02

  11. PC Shipments: 1997-2003 Units *Estimated • Expected Annual Growth over 2001-02: 20%

  12. PC Shipments Half-yearly Trend: Businesses Vs. Households Units • Business Sector accounted for major proportion - 82% of the market • Consumption in Businesses increased by 24% and households declined by 1% over H1/2001-02 • Consumption in Businesses improved by 16% and in households decreased by 11% over H2/2001-02

  13. Half-yearly PC Shipments : Enterprises % Units • Larger Businesses continued to contribute maximum sales: 47% but proportion dropped from 48% in H1/2001-02 and from 57% in H2/2001-02 • Sales to Small enterprises registered the maximum growth; 29% over H1/2001-02 and 51% over H2/2001-02 • Sales to Larger Businesses improved by 21% while in Medium it improved by 24% over H1/2001-02

  14. Apr 01-Sep 01 Oct 01-Mar 02 Apr 02- Sep 02 Total PCs bought 803,057 867,821 950,885 Pentium 4 1.5 – 2 GHz Configuration: Pentium 4 upto 1.5 Ghz - 21% 30% Pentium III 550 MHz and above 47% 45% 28% 24% Pentium III upto 450/ 500 MHz 10% 10% 7% 11% 12% Pentium II 200/233/266 MHz /MMX Pentium II 300/350 MHz and above 5% 4% 2% 2% 1% 1% Pentium /Pentium Pro - - Cyrix / AMD/Others/ not specified 21% - 11% 10% PC Shipments by Configuration • P-4 dominated the market with 51% market share followed by P III with 36% • AMD/Cyrix etc. making their presence felt; Market share: 10%

  15. The PC Market: Indian, MNC & Assembled H1/2001-02 H1/2002-03 • Assembled PC market share increased to 48% from 44% • Share of MNC Brands decreased from 36% to 30%

  16. Half-Yearly: Share of Indian, MNC & Assembled Market share (%) • Share of Indian Brands increased to 22% in H1/2002-03 from 18% in H2/2001-02 • MNC brands shared dipped 4% but remains significant over H2/2001-02 • Assembled PC market share remained constant, but sales grew by 11%

  17. PC Shipments: The City-spread • Market concentrated in Top 4 cities but proportion dropped significantly over H2/2001-02, however sales dropped by only 1% • Proportion of ‘Next Four’ fell sharply to 11% from 16% (H2/2001-02) with sales dropping 27% • Robust consumption growth in smaller towns: 30% over H1/2001-02 and 56% over H2/2001-02

  18. Enterprises PC Market: The City-spread • Overall Establishment/Business market grew by 24% over H1/2001-02; and 16% over H2/2001-02 • Market concentrated in Top 4 cities; while proportion dropped over H2/2001-02, the consumption remained constant • Proportion of ‘Next Four’ cities fell sharply from 12% in H2/2001-02 to 9% • Proportion of Smaller towns increased significantly to 38% marking a 63% increase in consumption over H2/2001-02

  19. Profile of PC buyers: First time Vs. Repeat % Buyers • First time buyers accounted for 51% of PC sales • In the business segment, repeat buyers accounted for 59% of sales while in households first time buyer accounted for 88% of sales

  20. Profile of Household PC buyers:Socio Economic Classification % buyers • Sales to SEC A declined by 23% over H1/2001-02 and by 26% over H2/2001-02 • Sales to SEC B increased by 56% over H1/2001-02 and by over 2% H2/2001-02 • Gradual penetration into SEC C: accounted for 8% of the total households

  21. Half-yearly Note book Shipments Units • Growth declined by 5% over H1/2001-02 and by 14% over H2/2001-02 • Top 4 cities accounted for 70% of sales • Share of smaller towns increased to 23% from 9% in H1/2001-2 and 8% in H2/2001-02 growing 139% and 137% respectively.

  22. Notebooks Enterprise Market: Half yearly % Units • Notebook sales remained concentrated in Large businesses; sales grew by 5% over H1/2001-02 and by 8% over H2/2001-02 • Consumption in small and medium enterprises recorded negative growth: (-)10% in small and (-)15% in medium over H1/2001-02

  23. Half-yearly Market: Servers Units • Server sales grew by 4% over H1/2001-02 and by 17% over H2/2001-02 • Top 4 cities accounted for 89% of sales growing 64% over H2/2001-02 • Sales to smaller and medium businesses grew by 87% and 53% over H1/2001-02 respectively; however consumption in larger businesses dropped by 44% • Small enterprises accounted for 35% of the sales while medium and large accounted for 34% and 31% respectively.

  24. Networking Products Shipments Units • Hubs Market grew by 256%; NIC market grew by 51% over H1/2001-02 • Modems market declined by 19% over H1/2001-02 • Modems: Household accounted for 53% of the modem market while Businesses accounted for 47%; Households market declined by 32% while the Businesses market declined by 3% over H1/2001-02

  25. Printers - DMP Vs. Inkjet Vs. Laser 474,206 445,473 390,650 379,858 Units • Total Printer sales declined by 3% over H1/2001-02 and by 15% over H2/2001-02 • Sales of Dot-Matrix declined by 8%; and Inkjet by 7% over H1/2001-02; Sales of Laser printers grew by 63% • Sales of Inkjet printers grew 33% in the Business Segment but declined 42% in the Households sector as compared to H1/2001-02; while that of Dot-Matrix in Business segment declined by 4% and by 36% in Households

  26. Printers - Where are we headed ? 836,122 477,305 827,820 844,000 590,335 % Units * * Estimated • 2002-03: Overall Printers sales expected to remain flat

  27. UPS Shipments: Half-yearly trend Units • Sales grew by 26% over H1/2001-02 • Businesses accounted for 66% and Households for the rest 34% of Market • Top 4 cities accounted for 56% with consumption growing 65% over H1/2001-02 • Overall consumption in the Business segment grew by 132%; while in Large Businesses it grew by 276% • Consumption in Households declined by 34%

  28. Other peripherals Sales Units • Keyboards and Monitors have grown by 16% and 17% respectively over H1/2001-02

  29. Monitor Market by Size April -Sept.2002 April -Sept.2001 Units: 834,031 Units: 977,154 • 14” & 15” continued to dominate the market • Market share of 17” increased marginally, but sales grew by 32%

  30. Active Internet entities: 1998 - 2002 March 98 March 99 March2000 March 2001 March 2002 Sept. 2002 150,000 350,000 651,000 1,127,125 1,29,3806 1,306,356 • CAGR: 120% CAGR: - Business: 93% - Home: 220% (Definition: Entities are establishments/individual with internet connection; an entity may house/be multiple user/s)

  31. Mode of Internet Access in Businesses September 2002 March 2002

  32. Internet owning House-holds by location and by SEC • Break up by Town-Class: Town Class March 2001 Sept. 2001 March 2002 Sept. 2002 Top 4 72% 68% 63% 68% Next 4 18% 23% 25% 19% Other 8 10% 9% 12% 14% • Break up by Socio-Economic Profile: SEC March 2001 Sept. 2001 March 2002 Sept. 2002 SEC A 73% 79% 71% 77% SEC B 17% 21% 29% 23%

  33. Internet Penetration September 2002 • Internet Penetration by Town class and Socio-Economic Classification Business Segment Home Overall 40% 11% Top 4 Metros 42% 13% Next 4 Metros 41% 9% Other 8 Metros 29% 9% SEC A - 20% SEC B - 4% • Break-up of Internet Connection in Business Entities: Indian Pvt. 91% MNC 2% Govt./PSU 7%

  34. Summary Product Units Value (Rs. Crs.) H1/02-03 H1/01-02 % H1/02-03 H1/01-02 % Computers Desktops 950,855 803,055 18 2,355 2,210 7 Notebooks 20,199 21,170 -5 145 169 -14 Servers 28,046 27,005 4 404 432 -7 Printers Dot-matrix 144,330 157,205 -8 124 147 -16 Laserjet 42,927 26,330 63 108 74 46 Inkjet 192,601 207,112 -7 80 83 - 4 Line 1,754 1,840 -5 24 28 -14 Others Keyboards 975,310 837,430 16 ** ** ** Monitors 977,145 834,030 17 597 490 22 UPS 221,227 176,100 26 ** ** ** Networking NIC 751,074 498,775 51 - - - Hub 301046 84,525 256 - - - Modem 178,271 255,045 -30 - - - Internet 1,306,356* 1,293,806**10% * September 2002; ** March 2002

  35. Forecast for second-half of 2002-03 • Product Total Market Market forecast for Forecast for 2002-03 Oct. 02-March.03 • PCs 2,010,000 1,060,000 • Dot-matrix 325,000 180,000 • Inkjet 432,000 240,000 • Laserjet 87,000 45,000 • UPS 480,000 260,000

  36. Thank you!

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