Hyderabad:

With many PC vendors campaigning aggressively, PC sales may shoot up by 15-20 per cent during the financial year 2002-03 — the figure is against the growth rate of 12 per cent projected by the Manufacturers’ Association of Information Technology (MAIT) this year in the country.

Says L R Gandhi, president, Twin Cities Computer Dealers’ Association (TCCDA): “The Hyderabad market alone witnessed a growth rate of 10 per cent in the previous year despite the fact that there was no significant IT consumption, particularly in general manufacturing, banking and finance. In the year 2003 it is expected to grow by 15-20 per cent as the home and the small office/home office (SOHO) segment is emerging as a growth engine.”

PC vendors HCL, Wipro, Zenith and PCS, which achieved their targets during the slowdown in South, have drawn roadmaps to tap new markets — small towns. In fact, all players are focusing on time-to-market besides expanding their presence to smaller towns. This development is followed by printer and other peripheral companies, including Xerox.

Wipro Andhra Pradesh regional sales manager Shiladitya Som says at present his company is on an expansion spree. This is mainly because of the positive sales in the previous year. Wipro is focusing on the market reach at C&D (components and display devices) level towns through its channel partners. At present, the company has presence in Hyderabad, Visakhapatnam and Warangal. Armed with 40 channel partners, it wants to reach smaller towns for aggressive sales.

LG Electronics India is another player that focuses on this model. The company, which launched its new brand PCs in the last quarter, is marketing them online (www.lgezbuy.com) and is delivering through its network of seven regional distributors and 80 resellers in Andhra Pradesh.

“There is a great demand for PCs. Our idea is to meet the market needs,” says S Prasanna, branch manager, IT division, Andhra Pradesh, LG Electronics India.

Anand Swaroop, general manager, Andhra Pradesh for HCL Infosystems, says: “The slowdown has not affected our business. We have done considerably well and achieved our targets. We expect to growth further in 2003.”

Focused market HCL has a largest network in Andhra Pradesh and Karnataka. It is currently focusing on government and SME (small and medium enterprises) segment, while Wipro is concentrating on defence, home and SME segments besides small towns.

PCS is a new player focusing on similar areas for its growth this year. Zenith is not behind in the race. However, multinational corporations (MNCs) like IBM, Compaq, Dell, HP, Apple and Acer, which have so far confined to Indian metros, are expanding their reach to small towns, too, through authorised dealers in South. Currently, they are organising roadmaps to tap more semi-urban customers.

According to market observers, branded PCs are ruling the market with a 60-per cent share, while 40 per cent comprises assembled systems. HCL holds a strong presence with a 25-per cent market share, followed by Wipro with 6 per cent. However, HP, Compaq and IBM, by and large, have an equal share in MNC brands segment in the two states.

Andhra Pradesh is, indeed, in the forefront, driving the PC sales. Says Randeep Sudan, special secretary to the state chief minister: “We have expedited all our IT projects, particularly sales, during the recession in order to get a better price and productivity. This way, the government saved nearly 8-12 per cent revenues.”

Col Vijay Kumar, director of STPI, Hyderabad, echoing similar feelings, says the state has a huge potential in the PC market. Suresh Chanda, managing director, AP Technology Services, says they are speeding up the government’s IT projects and have signed memorandums of understanding (MoUs) with several PC vendors, including MNCs.

Currently, the Hyderabad PC market sells around 10,000 units a month as against 15,000 in Karnataka. Gandhi says for a market like Andhra Pradesh will need to have a different approach. “New strategies of various companies will fetch good results in the coming days.”

With competition increasing among the companies, the buyer would get products at a better price, says Uday K Agarwal, director, Utkarsh Infotech, Hyderabad.

But there is a snag. The IT hardware sector is demanding an 8-per cent cut in excise duty, thus affecting further development of the sector in the country. The Indian IT hardware sector has been pining for a cut in excise duty for the last three years. And they are hoping that the bext budget (2003-04) will yield some initiatives for the hardware sector.