Date:23/01/2005 URL: http://www.thehindubusinessline.com/2005/01/23/stories/2005012301470500.htm

Back Consumer desktop segment notches 30% growth year-on-year

Moumita Bakshi

New Delhi , Jan. 22

A mix of duty revisions, price cuts and aggressive promotions buoyed the consumer desktop segment in the third quarter of 2004 with unit shipments touching 2,83,000 units, translating into a 30 per cent year-on-year growth.

"The growth was faster than expected at 10 per cent sequentially and 30 per cent year-on-year. While the AMD-Linux combination generated generous enthusiasm in the market in 2003, duty revisions, price cuts and year-round promotions have kept the market buoyant in 2004," according to a recent IDC report.

It said that characteristic back-to-school demand in third quarter, coupled with promotions in the run-up to the festival season, delivered an effective concoction to perk up the market.

The close race between HP (40,112 units) and HCL (38,686 units) continued into third quarter with HP maintaining a marginal lead over HCL, it said.

"Noteworthy was the robust double-digit sequential growth of 30 per cent registered by both vendors. Entry level models in the sub-Rs 25,000 category once again accounted for a sizeable chunk of both vendors' shipments," it said.

A notable feature of the report was that LG's performance outshone all other consumer desktop players during the quarter, as the Korean Chaebol displaced veteran Zenith to occupy the third position with 18,063 units.

"Paramount to LG's growth was the strategic expansion of its channel partner base across all three tiers of distribution. Furthermore, attractive bundled offers were timed to take advantage of local festivals such as Onam in the South and Ganesh Mahotsav in the West. The vendor also capitalised on the models introduced with a three-year warranty in place of the customised one-year warranty, a concept that, until then, had primarily been limited in commercial desktops," the report said.

During the period, the share of assembled PCs and other small regional brands in the consumer desktop space dropped to 57 per cent in third quarter from 64 per cent in second quarter, demonstrating the impact of sustained aggression on the part of branded PC vendors.

"These PC vendors made strong inroads into the consumer segment on the back of a strong product positioning, which was favoured further by the Central Government's duty rationalisation measures. The truck operators strike in third quarter also placed more pressure on the procurement processes of small assemblers than that of the branded PC vendors," it added.

Meanwhile, the commercial desktop segment stood at 5,42,100 units, which represented a 9-per cent sequential growth and a 22-per cent year-on-year increase.