In the overall Client PC (Notebooks and Desktops) market, the rankings remained unchanged - HP retained the top slot with a market share* of 17%, followed by HCL at 13%, and Lenovo at 7% in terms of unit shipments. In terms of total desktop shipments* HCL led the market, while in terms of total notebook PC shipments* HP was the top vendor.

However, the four major trends were visible through the year:

• Branded PC vendors increasing their channels reach and retail presence in the upcountry markets (B, C and D class cities and towns) and metros, respectively
• On the commercial desktops front, all major vendors revealed an enhanced go-to-market spend on the SMB segment, which recorded a 21% year-on-year growth* in unit shipment terms
• Introduction of ‘sub-Rs. 10,000’ PCs in the Indian market and the resultant impact
  A 148% year-on-year growth* in Notebook PC shipments

Increase in regional/upcountry footprint and retail thrust in major metros: “Players like Acer, HCL, HP, Lenovo and Zenith signed up new channel partners in upcountry markets besides launching ‘branded’ retail stores in the major metro cities”, said Piyush Pushkal, Senior Analyst, PC Research, IDC India.

Sustained growth in commercial desktop shipments: Government along with the IT services and financial services sectors were the prominent buyers contributing to the growth in the commercial desktops segment during 2005.

The commercial desktops category witnessed a 14% year-on-year growth* with HCL maintaining the top rank in terms of unit shipments, followed by HP and Lenovo. Apart from large enterprises, the Small and Medium Business segment also contributed to a significant portion of shipments in the category.

Introduction of ‘sub-Rs. 10,000’ PCs in the Indian market: IDC data shows that the ‘sub-Rs.10,000’ PCs (as promoted by PC vendors) actually reach the customer premises at a landed cost of ‘sub-Rs.13,000’ after adding taxes, freight and handling. These 'sub-Rs. 13,000' PCs have not sold very large numbers since their launch in JAS 2005, contributing to just 2% of total desktop shipments during the July-December 2005 period, according to IDC’s India Quarterly PC Market Programme, 4Q 2005, February 2006.

Since the entry level PCs usually come with very basic features, at the point of final decision buyers tend to migrate to the next higher configuration, keeping in mind the life of the machine and technological obsolescence besides enhanced features.

“Nevertheless, the news coverage and media hype surrounding the introduction of ‘sub-Rs. 10,000’ PCs will definitely help to expand the consumer base for PCs, by bringing in more middle-income families into the ambit of those considering a PC purchase for their homes. However, much remains to be done by the entire IT community to boost the relevance of owning a PC for a middle class Indian home”, added Piyush.

Riding on these sentiments the consumer desktop category witnessed a 29% year-on-year growth* in unit shipments in 2005 over 2004. HCL led this category over HP, with LG following the market leaders at the third slot.

148% year-on-year growth in Notebook PC shipments: The notebook PC market took another great leap in India during 2005. The change in the customs duty structure resulted in overall prices dropping considerably. This generated greater demand for the form factor. Coupled with aggressive marketing by vendors, the notebook PC segment as a whole witnessed a massive growth of 148% year-on-year, recording landmark sales of 474,000 shipments*.

HP continued to lead this category with a market share* of 40% in unit shipments. Lenovo and Acer were at second and third slots with market shares* of 17% and 14%, respectively (in terms of unit shipments).

Year 2005 also witnessed a very high offtake of ultra-portable notebook PCs**, which recorded a 173% year-on-year growth* in terms of unit shipments. According to Piyush, "The growth in ultra-portable notebook PCs is a clear indication that notebooks are becoming a lifestyle statement, apart serving as convenience and productivity enhancement tools.”

*According to IDC's India Quarterly PC Market Programme, 4Q 2005, February 2006
**According to IDC, an ultraportable is a Notebook PC that has a 12in. class or smaller [12.1in. or 30.7cm, diagonal 4:3 or wide-aspect] display. An example of an ultraportable is the ThinkPad X.