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IT Industry Performance Annual Review: 2009-10

Press Conference New Delhi: July 28, 2010

ITOPS The largest and longest IT hardware tracking study in India

The Longest

The Largest
Conducted in 17 cities of India.

Tracking the Indian IT Hardware


market for over 12 years.

Findings projected to All India urban Market.

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

Completed 26 successful rounds


of the study.

Conducted twice a year H1 FY: Apr to Sept. H2 FY: Oct to March

ITOPS The only demand study on Indian IT hardware market

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.

ITOPS Edge

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
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.

Establishment

Principal Activity defined Manufacturing/ factory/ Warehouse Office Outlets Government


No. of employees defined < 10 employees (Small establishment) 11-50 (Medium establishments) 50 + (Large establishments)

ITOPS Comprehensive product coverage

1.Computing products Desktop PCs Notebooks Server Thin-Client Workstation

2.Printers DMP IJP LJP MFD

3.Peripherals UPS, Keyboard, Monitor LCD projectors, Webcam Scanner, Zip Drive OA (FAX, Photocopiers)

4.Networking Products NIC, Hubs, Modems LAN Intranet/Extranet/Internet Wi Fi SAN NAS DAS

5.Storage

6.Software

Packages Customized

And the findings are..

Total PC (Desktops & Notebooks) sales: 2004-2010

8,034,556 8,000,000 7,000,000 6,000,000 5,000,000


Units

7,344,306 6,341,451 5,046,558 3,809,724 6,796,107

4,000,000 3,000,000 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 %
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Total PC (Desktops & Notebooks) Quarterly sales


2,500,000 2,076,177 2,000,000 1,668,286 1,720,898 1,996,026 2,022,701

2,294,931

1,615,999 1,500,000
Units

1,436,125

1,000,000

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)

Notebook (including net books) sales: 2004-2010


3,000,000 2,508,564 1,822,139 1,516,459 1,500,000 1,000,000 500,000 0 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 431,834 177,105

2,500,000
2,000,000
Units

850,860

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
Next 4 Rest of India

Top 4 100%

80%
60%

47%

36% 6%

24% 7%

18% 7%
68%

10%
40% 20% 0% 2005-06 2006-07 2007-08 2008-09 2009-10 43% 58% 69% 75%

4%
29%

Consumption in top 4 metros grew by 173%, rest of India by 48% , however consumption in Next 4 cities declined by 16%.

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Notebook sales in Businesses & Households


2500000 2000000 Households Establishment

1,409,785 1500000
Units

794,942 769,760

1000000
Units

500000

55,257 22,011 155,094 2004-05


376,577

318,486
1,027,197 532,374 746,699

1,098,779

2005-06

2006-07

2007-08

2008-09

2009-10

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


Large Medium Small

100%

80% 60%
% Units

52%

47% 22%

56%

43%

32%

44%

40%
20%

27% 21%

29%

50%

25% 31%
19% 28%

35% 21%

0%

18%

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


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


Govt. Locations 100%
% buyers

Outlets 1% 9%

Office locations

Factory locations 5% 20% 13% 12%

7%

1% 6%

2% 7%

80% 60% 40% 20% 0% 2004-05 23% 10% 2005-06 70% 84%

81%

88%

62%

82%

5%
2006-07

8% 2007-08

5% 2008-09

1% 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 5,000,000 4,000,000 3,000,000
Units

5,490,591 5,522,167 4,614,724 3,632,619

5,279,648

5,525,992

2,000,000 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%
40% 20% 0%
2005-06

35% 28%

39% 23%

45% 22%
2007-08

51%

52%

Informal MNC India

18%
2008-09

21%
2009-10

2006-07

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

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Desktop sales: City-spread


Top 4
100%

Next 4

Rest of India
23 25 7

80%
60% 40% 20%

38 11

33

32

31

13

12

51

54

60

65

68

61

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 6,000,000 5,000,000 4,000,000 3,632,619
72% 26% 28% 25%

Business

Total DTPs
5,522,167

5,490,591 4,614,724
74% 75%

5,279,648

5,525,992

60% 40%

66%

58% 42%

Units

3,000,000 2,000,000 1,000,000 0

34%

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 100% 80% 60% 47 43 Medium Small

48 70

57

55

% Units

40% 20%

31

28 25
18

27 18 2008-09

42

22 0% 2004-05

24 2005-06

12 2006-07

18 2007-08

15 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


100% 80% Factory locations 3% 3% 7% 12% Office locations 6% 7% Outlets 8% 6% Govt. Locations 10% 7% 9% 4%

% buyers

60% 40% 20% 0% 10% 2004-05 11% 2005-06 3% 2006-07 5% 2007-08 6% 2008-09 6% 2009-10 79% 74% 84% 81% 77% 81%

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


SEC A 100% 21% 80% 60%
% Units % buyers

SEC B 20%

SEC C 18% 22% 29%

16% 29%

28%

36%

39%

39% 42%

40% 20% 0% 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 51% 55% 44% 43% 39% 30%

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
120,000 119,591 101,827

100,000

89,161

90,189

Units

80,000

60,000
40,000

49,165

20,000
0

2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

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

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Server sales: Business by employee size


Large 100% 22 80% 60%
% Units

Medium 26

Small 16 35 42

26

55
34 39 23 44 35 37 22 2006-07 2007-08 2008-09 2009-10 38 42 37 27

40% 20% 0% 2004-05 2005-06

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%

80%
% Units

36

35
7

22 43 26 6

55 16
9 36 48

19 6

60% 40% 20%


0%

58

75
52

51

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

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


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

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% 26

UPS consumption: Yearly trend

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.

Units

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Sales of other peripherals

Units Market for Keyboards and Monitors grew by 8% & 5% respectively over 2008-09.

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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% . 29

Active Internet entities: March10


10500 9000 7500
000 Units

Entities

10,068

8,600 7,200
6,009

6000

4,124
2,504

4500 3000
1500 0

3,127

651

1,127

1,456

1,848

Mar '00

Mar '01

Mar '02

Mar '03

Mar '04

Mar '05

Mar '06

Mar' 07

Mar' 08

Mar' 09

Mar' 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 Overall (17 Cities) Top 4 Metros Next 4 Metros Other Towns 53% 55% 46% 39% Home 21% 25% 15% 14%

Internet penetration by Town class

Internet

penetration among households by SEC

SEC A SEC B SEC C

38% 17% 9%

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Mode of Internet access in Businesses: March 2010


Internet connections Contribution to the total by Access type Dial up ISDN March 2010 10% 11% 9% 62% VSAT Data Card 5% Others 2% 1%

Leased line
DSL/Cable Link

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The Market of 2009-10 Vs 2008-09


Total installs April 08 March 09 April 09 March 10 Total Revenue (in Rs Crores) April 08-March 09 April 09March 10

Product

% Growth

% Growth

Computers
Desktop PCs Notebooks Servers 5,279,648 1,516,459 119,591 5,525,992 2,508,564 101,827 5% 65% -15% 10,325 5,886 1,886 11,267 9,577 1,836 9% 63% -3%

Printers
Dot matrix Inkjet Laser Line 393,951 751,683 472,022 5,274 383,597 812,310 525,882 4640 -3% 8% 11% -12% 263 155 594 60 257 177 660 54 -2% 14% 11% -10%

Other Peripherals
Key boards# 5,333,717
5,490,425 1,518,433

5,756,923
5,754,091 2,324,480

8%
5% 53%

Monitors UPS systems#

Networking Products
Network Interface Card# Hub# 3,912,191 159,178
3,454,721 -12%

161,602

2%

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The expected Market for 2010-11

Total Sales 2010-11 Desktops 6,200,000 2009-10 5,525,992 % Growth 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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