Changing Dynamics of PC demand in the country

S Mohini Ratna, Editor, VARINDIA

The overall PC market which consists of desktops, notebooks, and workstations is stable in India. During the first wave of the pandemic, the demand for laptops arose from the need to move from “one PC per home” to “one PC per person”. The second wave of the pandemic saw demand accelerating as organisations and consumers were compelled to adapt to remote work, online education, and other day-to-day requirements.

The PC market  has gone through an amazing growth trajectory over the last 18 to 24 months. The India PC market actually shipped around 4.3 million units only in calendar Q1 of 2022. If you compare in terms of just growth rates, the commercial PC segment, over year terms grew more than 40 per cent. The growth was attributed to the hybrid way of working, which means companies will have to do a refresh of their existing installed base. 

The recent quarter shows, most of the PC makers including HP, Dell, Lenovo and Microsoft experienced business declined in double digits, whereas the worldwide PC shipments were down 19.6%. Total shipments of desktops and notebooks fell 18% to 69.4 million units, as existing weakness in the consumer and education segments was exacerbated by more cautious IT spending by businesses. 

The PC vendors are facing the hit by rising PC part pricing, supply and logistical issues, and moreover, as the employees are returning to office, now those laptops are returned to the company, hence there is a surplus of PCs with the organisations, this is also the reason for no bulk purchase from the corporate world but the surprising part is Corporates must acknowledge the increased sales during the pandemic and made huge profit from the crisis. Tech giants have reported soaring profits as consumers upgraded their devices and sought cloud storage during lockdowns.

Secondly, back-to-school PC purchases also showed disappointing results, despite massive promotions and price drops, due to a lack of need as many consumers had purchased new PCs in the last two years. On the business side, geopolitical upheavals, such as the war in Ukraine, and economic uncertainties led to more selective IT spending, and PCs were not at the top of the priority list.

As per Canalys, adverse macroeconomic and industry factors including high inflation, rising interest rates and bloated channel inventories have dented the PC market’s momentum and are likely to persist into 2023. Notebook shipments suffered the most, posting a year-on-year decline of 19% with 54.7 million units shipped. Desktop shipments proved more robust due to less reliance on consumer spending, falling 11% year-on-year for a total of 14.7 million units. Lower spending in the education sector is a major factor in PC shipments — including tablets falling 14% to 105 million units in the second quarter of 2022. 

Total shipments of desktops and notebooks fell 18% to 69.4 million units, as existing weakness in the consumer and education segments was exacerbated by more cautious IT spending by businesses. PC manufacturers are banking on gaming PCs to prise open new markets across the country. India is the fastest growing games market in the continent and is on track to become a $1-billion market for video games by 2025. As a result the demand for gaming laptops among students and young working professionals witnessed increasing. In the last few years, India’s online gaming business has expanded dramatically. 

During the challenging times, the online sales, which is purely driven largely by price points, offline sales was driven by experience. Brands are now focussing on their own website stores where they can bundle accessories and get good traction, and pull traffic which will build a base for future sales. 

Going forward, the gaming ecosystem is expected to grow further with competitive esports tournaments on the rise, the gaming laptop segment is going to be an exciting space in the country.