MUMBAI, March 30: The prevailing price wars and the depreciation benefit of buying before March seems to have had practically very little impact on the sluggish demand for PCs. According to companies, corporates, which are typically the biggest buyers during this period, have not invested the way they were expected to do.Analysts attribute the softness in corporate demand to the recent bout of political uncertainty. "Also, corporate India has had a rough time last year and even they don't seem too keen to invest in computers at this point of time," an analyst said.
"The two quarters preceding the January-March quarter were better. However, during this quarter, we can at best expect only a marginal growth," said Varun Prasad, director in charge of PCs, CMS Computers, which distributes brands like IBM, Hewlett Packard, Compaq and Toshiba.
"Political uncertainty, which has stabilised only recently, has meant that corporate demand has remained sluggish," said Bipin Ahuja, senior vice president, ZenithComputers which, apart from its own brand, also distributes IBM and Hewlett Packard.
According to companies, it has mainly been the financial institutions and banks that have invested in computers during the last couple of months. "As globalisation has affected them the most, they are really reaping the benefits of investing in IT. Also, we are seeing a lot of new concepts and solutions such as telebanking, on-line banking and automated teller machines (ATMs) emerging in the Indian banking industry, which are essentially powered by computers," Prasad said.
In spite of buying by financial institutions and banks, two other large segments namely corporates and homes have been active buyers during this time. "The home segment is anyway not a major buyer during this period as they usually lack the resources due to tax liabilities," says Ahuja.
However, what has come as a major surprise to many is the continued lack of demand in spite of price cuts announced by major PC vendors like Compaq, Hewlett Packard,Digital and HCL. "The recent price wars seem to have had no impact on demand," an analyst said.
According to analysts, as this is the first time multinational brands have entered price wars, customers could be waiting for more players to join and thus pulling the price further down. "Customers have seen these kind of wars before and probably they have started seeing these wars quite often," Prasad said.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
