Slower growth in PCs in new year, IDC warns

IT market research firm IDC India warned of a slow down in the Indian Personal Computer (PC) market in the new year. Against a growth of 31% this year, 2011 is likely to see the market expand by just 22%, according to the Gurgaon-based firm.

The trend is a continuation of the moderation of PC growth in India. PC sales surged 33% in the first quarter of 2010, followed by a 34% growth during the quarter ended June. However, growth in PC numbers dipped to 27% in the September quarter. For the full year, IDC expects growth to average around 31% -- crossing the 10 million units per year mark. The growth was led by consumer PC sales, which continued to increase its share in the overall pie.

While 2010 may have benefited from the release of purchase orders 'held back' during the recession of 2008 and 2009, next year will not have the luxury of either compensatory buying or a low base. "[We] attribute the relatively slower PC sales growth expected in 2011 to the effect of a larger base," it said in its year-end review of the market.

2011 may also be the year which is likely to challenge IDC's measurement methods. While computers have traditionally been built on 'x86' architecture promoted by Intel and AMD, the new year will see the emergence of tablets -- nearly all of which are based on a simpler architecture known as RISC or Reduced Instruction Set Computing. RISC systems, which include embedded devices and phones, have traditionally not been counted among PCs by market research organizations. However, thanks to the recent emergence of RISC chips that rival Intel and AMD chips in power, tablets such as the iPad have emerged as PC-replacements for some. x86 tablets, meanwhile, are at least three quarters away.

“Media tablets in their present form and currently prevailing price points are unlikely to excite the large majority of consumers, though different products are expected to be launched at various price brackets in 2011," said Sumanta Mukherjee, Lead PC Analyst, IDC India. "These would remain devices used largely for content consumption, as the virtual keyboard is likely to present a problem for users who are used to creating content.”

2011 is also likely to see the final rites being performed for the 'netbook' segment as AMD empowers the low end devices with power comparable to mainstream notebooks through its new 'Fusion' range of chips.

IDC India too pointed towards an impending revolution as newer and newer 'form factors' such as tablets come on the scene in 2011. It said the market will be redefined by the introduction of 3G services and bundling with existing and new PC form factors, increase in functionalities in mini noteboook PCs and wider adoption of IT or PC in the education sector.