Dominance of multinational brands in laptops and desktops will increase further with top two Indian players HCL Infosystems and Wipro exiting personal computer manufacturing.
The top four multinational brands have nearly 65 per cent market share in the PC sales in the country.
In fact, the multinational brands made a big dent into the Government sector, which is now the biggest buyer of PCs. Tamil Nadu, Uttar Pradesh and Karnataka have procured PCs in large volume for educational purpose, and they were supplied by multinational companies such as HP and Lenovo.
“The exit by HCL Infosystems and Wipro may be purely a business decision. However, nowadays we cannot differentiate between Indian company and a multinational as most of foreign brands have manufacturing in India,” said Anwar Shirpurwala, Executive Director, Manufacturers’ Association for Information Technology, the apex body representing the interest of IT hardware industry in India. “Emotionally, yes, it is sad to see that Indian brands are exiting,” he told Business Line .
Soumitro Ghosh, Senior Vice-President, and Head of Wipro Infotech, in a statement said “our vision is to strengthen our position as a leading system integrator. Manufacturing our own PCs was not giving us a competitive differentiation in our system integration solution offering.”
HCL Infosystems too had a similar view stating that “manufacturing of PC is becoming less and less a part of our business. It is not our focus for future at all.”
The combined desk-based and mobile PC market in India totalled nearly 3.2 million units in the third quarter of 2013, a 7.9 per cent increase over the third quarter of 2012, according to research firm Gartner.
The market was driven by some large Government orders in an otherwise sombre economic atmosphere.
Lack of support Wipro should have taken this decision long ago when IBM decided to exit from the PC business, which gave a clear market direction that the future will be in software and services.
Also, lack of Government support to encourage technology hardware industry in the country was an indication enough that PC manufacturing will never be a high margin business for players. said Manish Bahl, Vice-President and Country Manager, India, Forrester Research.
According to MAIT, the sale of desktops and notebooks is expected to grow from 11 million in fiscal 2013 to 15 million in three years at annual growth of 6 per cent.
HP became the No. 1 vendor in the India PC market by doubling its market share in the country, as it accounted for 32.5 per cent of PC shipments in the third quarter of 2013, according to Gartner.