Channels in India should rethink their PC business strategy: Rohan Thomas

Shraddha Singh October 20, 2016
Channels in India should rethink their PC business strategy: Rohan Thomas

The decline of PC sales is directly proportional to the rise in mobility in the SMB space and hence the channel partners should change their current strategies, says Rohan Thomas, Manager Research at AMI Partners. 

With the evolution of smart devices and ever changing technology, PC sales in India are headed southwards. Reports by various firms indicate that it’s high time PC vendors either innovated or face extinction. According to a report while the overall PC shipment for Q2 2016 stood at 2.14 million units implying a quarter-on-quarter growth of 7.2 percent over Q1 2016, there was a year-on-year decline of 2.2 percent over Q2 2015.

While the larger companies are adopting mobility more rapidly, SMBs are still heavily dependent on desktops or PCs. ChannelWorld India spoke at length with Rohan Thomas of AMI Partners about the current scenario of PC sales market, mobility and the next big step which channel partners should take.  

 

With a consistent downfall in sales, how are PC vendors coping? 

When you look at the entire PC ecosystem in comparison with notebooks and tablets, the volume of the desktop market is rather big. According to our analysis, sale in desktops has declined between 8 to 10 percent and this is going to continue for another year based upon the discussion we had with vendors, channel partners and end users. We have noticed that the share of assembled desktops has also reduced substantially by 20 to 30 %. The general desktop configuration, the preference for the SMBs, last time we checked included 2GB RAM powered by Intel i3 dual core processor. Therefore we expect to see desktops witness a slump in adoption in the next three years.  

What about mobile proliferation? Is it impacting desktop sales?

The decline of PC sales is directly proportional to the rise in mobility in the SMB space. Based on a few surveys that we have done, we noticed that half of the SMB employees prefer to work from home as it is more productive. An increased proportion of the businesses are using smart devices on a large scale, as their employees prefer to use smart devices for their work. Some of the SMBs have a policy where they give mobile devices to their employees whereas in other cases, organizations allow the employees to use any kind of device for personal or business use.

How are other devices like tablets impacting the growth of desktop sales?

The assembled laptops have been replaced by branded laptops with narrow price margins. If you look at the BFSI and the retail market, there is a greater potential for thin client. As far as the portables are concerned they are supposed to show a positive trend. They could witness a growth of 7 to 8 % in the next year. Tablets on the other hand are expected to have a lot more healthier growth and are expected to grow at 20%.  When we talk about portables, we include traditional laptops, notebooks and ultra-books as well. The sale of PCs amongst SMBs are clearly driven by portable computers and tablets.

      

Is there any vertical specific pattern in PC sales?

The major verticals can be quite eclectic when we look at tier 1, tier 2 and tier 3 cities. But we have prioritized eight cities based on a revenue perspective namely Mumbai, Delhi, Bangalore, Chennai, Hyderabad, Ahmedabad, Pune and Kolkata and within these cities the verticals for desktop technologies also vary. For e.g., in Mumbai, BFSI, textile and retail are dominant verticals. Similarly Delhi has automotive and retail and Bangalore has manufacturing.

Undoubtedly channel partners are affected the most with the downfall of PC sales. What new strategy should they adopt in order to sustain in the business?

If you go to a POS or a retailer outlet, a lot of the times, they don’t approach the vendor. They mostly get in touch with the channel partners who in most cases are the system integrators. These system integrators bring all the components and build a turnkey solution which consists of the POS, the desktops, the monitor and they source an equipment from an eclectic range of solutions and hardware. The channel partners should change the market strategy instead of moving out from PC sales. One way of it could be to provide bundled offering to the users which would consist of the entire solution. A lot of times the vendors have to reach out to the end users through channel partners which makes the channel partners a crucial part of the PC sales ecosystem.