Local PC production soars as brands push for incentive schemes and govt contract

India has surpassed the 5 million mark for a third consecutive quarter. The country now accounts for 5% of global PC shipments, up from 3% in Q1 2020.

Analysts have attributed the growth to the expansion in local PC manufacturing. Jash Shah, research analyst at Canalys said, “18% of all PCs sold in India are now manufactured locally.” This has minimized the impact of events in China on the supply of PCs in India.

Several PC brands, including HP and Acer, announced plans to expand local manufacturing in the last year to meet local demand, especially to qualify for large government contracts that require over 50% of the supplied devices to be manufactured in India. Last November, Acer announced that its laptops will be manufactured at Dixon’s Noida factory, which will produce up to 500,000 Acer laptops annually.

Shah further added that India remained open for business to a large degree when most countries remained under lockdown. “This helped the economy resurge, creating additional demand for PCs and other IT infrastructure.”

According to the Canalys report, the total PC shipments during the first quarter grew by 48% year-on-year (YoY). Despite the pressure on the global electronics supply chain due to the pandemic and the restrictions in China due to the increase in covid-19 cases, India has seen an average growth of 44% in PC shipments in the last six quarters.

Tablet was the fastest-growing category with 1.6 million unit shipments growing at 69% YoY on the back of commercial orders, especially from the government sector.

Notebooks grew at only 36% YoY, however, they accounted for 3.4 million unit shipments during the quarter. With many offices returning to work, demand for desktops has also grown. Canalys report shows that desktop shipments surpassed 880,000 units at a 64% YoY increase.

In terms of overall PC market share, HP was the market leader with 1,449,000 unit shipments accounting for 24.9% of the market share. Chinese brand Lenovo was the second leading brand with 1,122,000 unit shipments and a 19.3% market share. Acer (10.7%), Dell (10%), and Samsung (7.4%) were the other leading vendors in the top 5.

Shah said the PC market in India will remain strong for the next few quarters, despite the slowdown expected in other global markets.

Having said that, Shah warned that the ongoing inflation will eventually impact the PC demand.

“With the Reserve Bank of India pushing up base lending rates, which are expected to continue to increase through the year to battle wholesale inflation, businesses in debt will feel the crunch, as they have less capital to work with,” he added.

As a result, consumers will stop making discretionary purchases, while companies, both small and large, will freeze budgets and hiring, which will impact IT procurement and PC demand.