IT Industry Performance Annual Review: 2007-08: Press Conference

IT Industry Performance Annual Review: 2007-08

Press Conference
New Delhi: July 08, 2008

About ITOPS
An Introduction

Industry
Validation of
the Market
Figures
Only DemandSide Study on

the Indian IT
Hardware
market
ITOPS
Largest
Tracker Study
on the Indian
IT Hardware
market
Longest
Running Tracker
Study on the
Indian IT
Hardware
market
Only Demand-Side
Hardware Market
Study
on
Indian
IT
Designed to deliver the much needed demand-side

insights
Data is collected
after Last Mile
S
P
O
IT
No undercounting/over
counting stock in
pipeline
Includes direct imports
by customers
Accurate estimation of
assembled market
Market/ Customer
Sentiments
Factors in the market/
customer sentiments and
opinion
along
with
industry level indicators
Accurate assessment
of Buyer Profile
Who bought, Where
usedNot dependent on
perceptions of reseller/
channel member/ vendor
Identification of
Emerging Segments
Need to monitor changes
in users perspective to
obtain cues for innovative
marketing
Identify and observe

Market Trends
Largest
Study
on
Hardware Market
Indian
IT
Coverage in 22 Cities
10,000+
Estabs
14,000+
Households
24,000+
Entities
The Study covers a sample of around 24,000+ entities per round
The study is conducted on a bi-annual basis covering the following time periods
H1 of FY: April to September
H2 of FY: October to March
across the Top 22 cities

Greater than 1 Million Pop Towns except Bhubaneshwar &
Guwahati
Longest
Study
on
Hardware Market
Indian
IT
Existence of over 11 Years

2005-06
ITOPS completes its 10th year, thus being the longest running IT
tracking study
2003-04
Coverage scaled up to 22 cities from 16 cities
2002-03
1998-99
Launch of
supplementary channel
survey for in between
quarters
ITOPS becomes a Bi-annual

study
1996-97
Launch
of ITOPS
as an
annual
Study
Industry Validation
Two Pronged Validation Process

Validation
Findings on
Market-size
Various
MAIT projected to
IT Players
All - India
Urban market
Validation
The findings from ITOPS is accepted as the official market

performance of Indian IT hardware market by Manufacturers
Association for Information Technology (MAIT), the nodal body for
IT hardware industry in India.
Information used by Govt. of India for all IT & allied planning.
Sampling & Projection
Sampling & Projection
Household
Using SEC A-C household population as obtained in the National

Readership Survey the largest household survey in the country
Establishment
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.
Principal Activity defined:

Manufacturing/
Office
Outlets
Government
factory/ Warehouse
No. of employees defined:

<
10 employees (Small establishments)

11-50 (Medium establishments)
50 + (Large establishments)
The Ace Grid has found application across researches involving

business segment across geographies
7
Some Insights that ITOPS has provided
Insights on IT market from ITOPS

Our Insights
What happened?
IT market moving towards the smaller cities

ITOPS 2001 Pro
Today, the smaller cities constitute close to

50% of the households. Vendor targeting a
wider canvass benefiting the most.
PC usage not restricted to upper and upper middle

class households only. It is increasingly percolating
to middle and lower middle class ITOPS 2002 Pro
Increased targeting of the segments through

price reduction, interest free loan schemes
helping in targeting the segment.
Students a key target segment in the households

ITOPS 2002 Pro
IT players launched PCs targeted at the

students community.
WiFi adoption in the country is expected to take

time! ITOPS 2002 Pro
Though many WiFi zones have come up in

major cities of the country, it is still not very
popular among the Internet users.
Education the key reason for purchasing PC in a

household students the main focus ITOPS 2002
Several PC vendors launched PCs targeted

specifically at students and running special
promotions for students. Universities a key
focus for most Notebook vendors.
ITOPS: Comprehensive coverage
Product coverage:
Computers
- Desktop PC, Notebooks, Servers
Printers
- DMP, IJP, LJP
Peripherals
- Monitors, keyboard, scanner, zip drive,

CD writer, Print server
UPS
- UPS
Networking
- Incidence, size of networking (no. of

nodes)
Networking products - NIC, Hubs
Internet
- Active internet subscribers, Modems
10
And the findings are..
Units
Total PC (Desktops & Notebooks) sales: 2002-2008
CAGR 2002-08: 26%
Growth over 2006-07: 16%

12
Total PC (Desktops & Notebooks) market: Regional spread

6,341,451 Units
7,344,306 Units
(-13%)
(39%)
(39%)
(10%)
2006-07
2007-08
PC consumption in both West and South grew by 39% each; in East it grew by
10% while in North it declined by 13%
Figures in the brackets represent

the growth in 2007-08 over 2006-07
13
Units
Notebook sales: 2002-2008
Annual sales grew by 114%; CAGR: 104%
Households accounted for 44% of the market growing 150%, Businesses accounted for
56% of the market growing 93%
14
Notebook sales: City-spread
Notebooks are fast penetrating beyond the top 4 metros; growth rate 152%
15
% Units
Notebook Consumption in Businesses - by employee size
Overall consumption in the business grew by 93%
Consumption in large and medium enterprises grew by 51% and 123%

respectively, in small enterprises it grew 174%
16
Units
Desktop sales: 2002-2008
CAGR 2002-08: 19%
Growth over the 2006-07: 1%

17
Desktop market: Regional spread

5,490,591 Units
5,522,167 Units
(-14%)
2006-07
(10%)
(4%)
(7%)
2007-08
Desktop consumption in West grew by 10%; in East it grew by 7% each; in South it

grew by 4% while in North it declined by 14%
Figures in bracket represent the

growth in 2007-08 over 2006-07
18
Desktop Market: Share of Indian, MNC & Informal
2006-07
2007-08
Consumption of Indian brands decreased 4% in absolute terms
Sales of MNC Brands grew by 16% however that of Informal sector PCs declined
by 12% in absolute terms
19
Desktop sales: City-spread
Consumption in Top 4 metros declined by 28% while sales outside the Top 4
metros grew by 14%
20
Desktop sales: 2002-08
74%
60%
Units
75%
77%
72%
40%
81%
19%
23%
28%
25%
26%
Desktop market growth over 2006-07: 1%
Consumption in households grew by 55%; in Businesses it declined 18%

21
% Units
Annual Desktop sales: Business by employee size
Overall sales to the Business segment declined by 18%
Sales to small and medium enterprises grew by 25% and 8% respectively,

however in large establishments it declined 33%
22
% buyers
Profile of Desktop buyers: Principal activity of the

establishment
Consumption in Government grew by 7% and in factory locations by 47%
Consumption declined in office locations by 21% and in retail outlets by 29%

23
% buyers
Profile of PC buyers in Households by Socio-economic class
Overall Households consumption grew by 55%
Consumption in SEC A grew by 50%, in SEC B by 68% and in SEC C by

43%.
24
Units
Server sales: 2002-2008
Annual sales increased: 35%; CAGR (for 6 years): 17%
25
% Units
Server sales: Business by employee size
Overall sales increased by 35%
Sales to small and medium enterprises grew by 127% and 121% respectively,
however in large establishments it declined 37%
26
Server sales: City-spread
Consumption in Top 4 metros declined by 17% while sales outside the Top 4
metros grew by 64%
27
Active Internet entities: March99 March08
000 Units
Translate
s to 52
million
internet
users
(Entities are establishments/individual with internet connection; an entity may house/ be multiple user/s)
Overall entities with internet grew by 20% over March 2007
Businesses accounted for 29% of the entities growing 6% while Households

accounted for 71% of the market growing 27%
28
Internet penetration: March 2008
Internet Penetration by Town class and Socio-Economic Classification (SEC) among

Top 22 Cities
Business Segment
Internet
penetration by
Town class
Overall
Top 4 Metros
Next 4 Metros
Other 8 Metros
Remaining 6 Metros
Internet penetration
among households
by SEC
46%
50%
42%
46%
28%
Home
21%
25%
17%
16%
11%
SEC A SEC B SEC C-
43%
16%
6%
29
Mode of Internet access in Businesses: March 2008
DSL inching ahead.
Data Card
DSL
Data Card fast growing in popularity
30
The Market of 2007-08 Vs 2006-07
31
The expected Market for 2008-09
32
Thank you!
33

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IT Industry Performance Annual Review: 2007-08

Only DemandSide Study on

Designed to deliver the much needed demand-side

Identify and observe

The Study covers a sample of around 24,000+ entities per round

H1 of FY: April to September

H2 of FY: October to March

across the Top 22 cities

Existence of over 11 Years

Coverage scaled up to 22 cities from 16 cities

ITOPS becomes a Bi-annual

Two Pronged Validation Process

The findings from ITOPS is accepted as the official market

Information used by Govt. of India for all IT & allied planning.

Sampling & Projection

Sampling & Projection

Using SEC A-C household population as obtained in the National

No framework for sampling and projection were available

Principal Activity defined:

No. of employees defined:

10 employees (Small establishments)

The Ace Grid has found application across researches involving

Some Insights that ITOPS has provided

Insights on IT market from ITOPS

IT market moving towards the smaller cities

Today, the smaller cities constitute close to

PC usage not restricted to upper and upper middle

Increased targeting of the segments through

Students a key target segment in the households

IT players launched PCs targeted at the

WiFi adoption in the country is expected to take

Though many WiFi zones have come up in

Education the key reason for purchasing PC in a

Several PC vendors launched PCs targeted

ITOPS: Comprehensive coverage

- Desktop PC, Notebooks, Servers

- DMP, IJP, LJP

- Monitors, keyboard, scanner, zip drive,

- Incidence, size of networking (no. of

Networking products - NIC, Hubs

- Active internet subscribers, Modems

And the findings are..

Total PC (Desktops & Notebooks) sales: 2002-2008

CAGR 2002-08: 26%

Growth over 2006-07: 16%

Total PC (Desktops & Notebooks) market: Regional spread

Figures in the brackets represent

Notebook sales: 2002-2008

Annual sales grew by 114%; CAGR: 104%

Notebook sales: City-spread

Notebook Consumption in Businesses - by employee size

Overall consumption in the business grew by 93%

Consumption in large and medium enterprises grew by 51% and 123%

Desktop sales: 2002-2008

CAGR 2002-08: 19%

Growth over the 2006-07: 1%

Desktop market: Regional spread

Desktop consumption in West grew by 10%; in East it grew by 7% each; in South it