NEW DELHI, Dec 23: The share of domestic personal computer (PC) brands is expected to shrink to 20 per cent in 1998 due to polarisation of the market between global brands and assemblers, a study by Skoch Consultancy Services states.

The share of these brands has come down to 30 per cent during this year from 50 per cent. Likewise, in terms of sales value, the share of the Indian brands has dropped to 26 per cent from 40 per cent last year, the study states.

The study points out that the trend seen in the market is in line with that observed in other markets which are going through liberalisation process.

In these markets, with little or no tariff barriers, the polarisation of the market has left a thin strip for domestic brands, often resulting in one or two domestic brands surviving.

This has already happened in Singapore, China and South Africa, the study says.

The market analysis, based on feedback for the first 10 months of the current year, has concluded that the overall size of the market would be marginally lower than that in 1996. The sales for the year is expected to hover around 5 lakh PCs as against the targeted 7 lakh.

The Skoch study further said the target of achieving sales of three million PCs in year 2000 is now an absolute impossibility.

It has also predicted break-ups of more joint ventures between Indian and multinational companies in the the coming year due withdrawal of incentives for manufacturing. Most multinational principals are looking at the erstwhile Indian manufacturers as just another channel rather than considering as joint venture partners, the study reports.

The year also saw companies cut jobs and put freeze on recruitments. In addition, there was reduction or stoppage of typical business operations of manufacturing, trading and distribution. The information technology companies increased their focus on services and software business, while making only a half-hearted attempt for hardware business.

The channels servicing various market segments too underwent changes during the year with "a new breed of systems integrators coming up and addressing even very large corporate requirements, which was earlier the domain of top four-five PC vendors in the country."

The study further found the distribution companies emerging stronger and filling the vacuum caused by the rollback of Indian brands with global brands.

Among the multinational brands, Compaq was the single biggest gainer, while Digital was a notable beneficiary.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.