NEW DELHI, December 18: For the computer industry, 1997 was a very disappointing year. Not only did the growth was less than projected, there was a fall in the total sales of computers. While the total market was expected to grow to have grown to Rs 3720 crore from Rs 2525 in 1996m, the final figure was much lower. The computer industry could manage sales of only Rs 2,450 crore in 1997, says a study done by New Delhi-based Skoch Consultancy Services.

``It was an year of erosion for the IT industry in India. Erosion in business, margins, loyalty, cash flows and channels,'' says the study. While the opening up of the market hurt the profitability of Indian companies, the industrial downturn depressed demand.

Indian brands suffered the most in the industry and lost their market share from 40 per cent to 26 per cent in value terms compared to 1996. The Skoch Study says that this may come down to 20 per cent next year. In number terms Indian brands market share fell from 50 per cent to 30%. MNC brands on the other hand raised their market share from 32 per cent to 40 per cent in value terms while the grey market also increased its share from 28 to 40% in value terms. ``With duty differential between components and finished products coming down substantially, the incentive to manufacture in India is all but gone,'' says the study.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.