PREPARED BY: HITESH VACHHANI

IT – HardWare Market in India

Indian Hardware Market

More than 3 million PCs are sold in Indian Market today since 2004. (The major reason being the subsidized rates and duties)

Entry level PC prices have dropped to Rs.20,000; and those for notebooks to Rs.50,000, and servers to less than Rs.1 lakh. The prices of inkjet and laser printers have also declined.

Assembled PCs have been ruling the market since 2003.

Threat from New Entrants: In this booming industry, there is a constant threat from the new entrants who emphasize on the low price structures in order create a market for themselves. The new entrants like Zenith PC, Acer India have adopted this strategy.

Threat of Buyers: Due to the high availability of various products & tight competition the consumers have a lot of options to select as per their requirements.

Threat of Suppliers: Company like Intel are supplying the microprocessors to the maximum market which leads them to dominate the hardware market.

Threat of Substitute: Now with the developing technology & constant innovations the hardware industry is also facing threat. Like substitute for PCs are laptops, & Floppy is substituted by CDs & Pen drives.

Threat of Internal Competition: There are a lot of companies in this industry. Companies like IBM, Dell, Intel, Wipro etc. are facing competition from the new entrants like Acer, Zenith & HCL in PC as well as other hardware sectors.

Porter’s 5 forces

Strength Weaknesses

OpportunitiesThreats

StrengthsGood Production CapacityInnovationDiversity in Product Range

WeaknessesAvailability of Duplicates.Less control over the price

OpportunitiesConstant increase in customer demandOpportunity for higher quality cost efficient productsOpportunities available for expansion of business

Utilising capacity and providing the market with the high quality low cost goods by penetration.

Trying to manufacture the goods with specific identity.

ThreatsIncrease in input costOpen Door PolicyFast Changing Technology

Following the ECONOMIES of SCALE phenomena to produce more with lower input costs.In house R & D Department

Getting goods PATENTEDGetting support from Government by spreading awareness of the sector and its advantages to the government society on the whole

TOWS

WIPRO : In India

ACER: In India

Acer records highest growth of 566% in notebook segment Acer was the first vendor to adopt an aggressive pricing strategy

for their notebook segment Gains top third position according to latest IDC results Acer introduced their entry level Celeron notebook, TravelMate

240 series, at sub Rs. 50,000 in September 2003. They launched their Pentium based TM243-FXP4 at sub Rs.

50,000 in December 2003. They reduced the prices to 45,000 in mid 2004 and today the notebooks are available for around 35,000 with standard configurations.

Companies, both Indian and MNCs, are beginning to take, some serious first few steps towards setting up manufacturing operations in the IT hardware sector in India, however, a lot more needs to be done for opportunities are immense and time is short. The most important imperative for focusing on manufacturing comes from significance of world trade and its linkages to economic development.

The IT hardware sector has potential of employing over 5 million people in India, against current employment level of about 1.5 million.

20 million mobile phones are added every year and unfortunately, none of them are made in India.

With both domestic and global demand going strong, India has potential to build 100 billion plus hardware industry, over the next few decades including the exports.

India : Growth Perspective

We should try to capitalize on the reduction of time, to design a product. When we can do that, we get a competitive advantage over our competition.

There were 700 million cell phones sold in the world, last year. Only about 30 million of them, sold here in India. There's a much greater potential than a 100 million per year.

But cell phones aren't the only thing that is hot, computers are still hot, white band, Wi-Fi, Wi-Max, evolution of white bank data communications is just starting, only 2% of the world's population has access to high speed data, that number has to increase and should increase to a high percentage of the world's population and it has a unifying affect in data and communications and video.

India has so many advantages and a great workforce.

India : Growth Perspective

Findings

Continuous change in Technology. More and more new products. Reduced prices because of strong R&D.

Government Support &Technology. Distribution Network. India has Huge Potential of manufacturing

and has started to play on this sector for home as well as for the exports.

Findings: Contd…

Problem of Piracy: TOO BIG TO HANDLE Employment Generation. Various Technological Parks are developed for

manufacturing of the Hardware eg. Gandhinagar GIDC has a few manufacturing Cos. That manufacture products like circuit systems, cables, CDs, to name a few.

Conclusion

Huge market to be Tapped. Good manufacturing Potential. Can become Global Hub in not only Software

but in Hardware manufacturing as well. General awareness about the PCs and other

Gadgets has led to substantial growth in the sector.