Computer Hardware

and Peripherals
Computer and Peripherals – Indian Market
• Market size - $15.87 bn (2015)
• Employment – 1.7 m
• Share of PC - 32% in 2014 & 21% in 2015
• Phones and Tablets – 44 % in 2014 & 63% 2015
• 62% of demand met through imports from china and Taiwan
• Indian PC manufacturing in global market – 2%
 PESTLE Analysis

Political Economic Social Technological Legal Environmental

• Domestic • Trade deficit • Employment

Industry Generation • Adoption of • Import barriers
with technology to • Disposal of
pressure groups electronics Electronic waste
• Lower cost and reduce costs • Regulatory
exporters
• Public opinion increased approvals and
regarding affordability • Falling prices of labor laws
• Low value electronic
Chinese imports addition in due to
domestic components
India
manufacturing

Major challenge is cheap imports and lack of competitiveness in Indian

manufacturing due to infrastructure constraints and lack of scale.
 Products and Services

• PC assembly

• 90-95 % components are imported, Value addition in India is merely 5-10%

• Computers, laptops and peripherals like mouse, UPS and CPU fans.

• After sales service and spare parts sourcing.

 Major Customers
• After assembly the products are distributed through following channels:
1. Online Retail
2. Dedicated electronics stores like Reliance Digital and Croma
3. Small Retail outlets
4. B2B Sales to private companies
5. Sale to Government Institutions
Electronics Value Chain
Raw Material Suppliers

Semiconductor Manufacturers/Suppliers

Sub Component Manufacturers/Assemblers

Component Manufacturers/Assemblers

Original Equipment Manufacturers

 Typical Business Model
Phased Manufacturing Program

• Sourcing components from abroad:- China, Japan, South Korea.

• Import duty on finished Electronics– 20%
• Import duties on accessories(Chargers, headphones, speakers) – 27-28%
• Import duties on components – up to 15% (PCB’s – 4%, additional components – 0%)
• Import of finished electronics down from 80% to 26% in 3 years.
TRENDS
•Retail volume sales of computers and peripherals decline by 6% in 2017 to 11 million units- Increasing
penetration of mobile phones
•Business volume sales of laptops decline by 13% in 2017 to two million units- Increasing replacement cycle of
laptops
•Retail volume sales of tablets decline by 5% in 2017 to two million units- Increase in the availability of larger-
screen mobiles

PROSPECTS
•Retail volume sales of computers and peripherals are expected to decline at a CAGR of 2% over the
forecast period, reaching 10 million units in 2022.
•Demand for business laptops is expected to decline over the forecast period thus, companies are
replacing their laptops less frequently, and also sometimes replacing them with tablets, which are cheaper.
•Convertible tablets are more compatible with other devices compared to laptops, having longer-lasting
batteries, which is encouraging consumers to opt for convertible tablets.
units 2012 2013 2014 2015 2016 2017 Sales of Computers and Peripherals by
Category: Volume 2012-2017

Computers 7,416.80 8,388.80 8,160.10 8,051.70 7,309.70 6,830.40

- Desktops 1,825.8 1,615.80 1,357.30 1,085.80 933.8 817.1

- Portable Computers 5,591.0 6,773.00 6,802.80 6,965.90 6,375.80 6,013.30

-- Laptops 3,069.2 3,192.00 3,741.00 4,302.20 3,872.00 3,639.60

-- Tablets 2,521.8 3,581.00 3,061.70 2,663.70 2,503.90 2,373.70

Peripherals 4,854.40 4,864.80 4,786.20 4,587.20 4,377.00 4,172.50

- Monitors 2,315.5 2,338.60 2,280.20 2,189.00 2,097.00 1,995.10

- Printers 2,538.9 2,526.20 2,506.00 2,398.20 2,280.00 2,177.40

Computers and
Peripherals 12,271.20 13,253.70 12,946.20 12,638.90 11,686.70 11,002.90
 TAX PATTERN

• Peak rate of Basic Customs Duty (BCD) is 10%.

• The Goods and Services Tax (GST) rates for most of the goods and services are 5%,
12%, 18% and 28%. Electronic goods are mostly at 18%. Cellular mobile handsets
are at 12%.

• Promotion of indigenous manufacturing of LED (Light Emitting Diode) Lights by

reducing to 5% in BCD

• Increase in Basic Customs Duty on identified electronic goods to promote their

indigenous manufacturing
 MAJOR MARKET PLAYERS

% retail volume 2013 2014 2015 2016 2017

Hewlett-Packard India Sales Pvt Ltd 16.2 16.8 18.1 18.7 18.9

Samsung India Electronics Pvt Ltd 11.6 10.4 9.6 10 10

Dell India Pvt Ltd 7 8.3 9.4 9.8 9.7

Lenovo India Pvt Ltd 8.3 9.2 10.1 9.9 9.6

Acer India (Pvt) Ltd 10 9.9 9.1 8.7 8.6

LG Electronics India Pvt Ltd 4.3 4.3 4.3 4.4 4.7

Epson India Pvt Ltd 2.2 2.9 3.7 4.2 4.3

Micromax Informatics Ltd 3.3 2.6 3.6 4.1 4.1

Canon India Pvt Ltd 3.5 3.5 3.4 3.6 3.7

Apple India Pte Ltd 3.1 3 2.8 2.8 2.8

HEWLETT-PACKARD INDIA’S PERFORMANCE
 CHALLENGES POSSIBLE
SOLUTIONS

• Shrinking Operating Margins • Continuous technology

development
• Complex Global Supply-
Chain • Reducing the distance between
suppliers and clients
• Service and Warranty
Management • Strategic Partnership
• Short Product Lifecycles • Providing new services (EMS)
• Uncertain Demand
• Sustainability
 Business strategy by Leaders

• Awareness and affordability of • Government focus on

digitalization
technology
• Growth in telecom
• Increasing spending from IT infrastructure

services industry • Small and medium businesses

segment
• Need for innovative products at
low cost
Thank You