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‘Hybrid work demand, govt contracts will be key to future growth of PCs in India’: Ketan Patel

‘Hybrid work demand, govt contracts will be key to future growth of PCs in India’: Ketan Patel
8 Jun, 2022
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The covid-19 pandemic brought a much-needed boom for the PC industry in India over the past two years. However, with the pandemic receding and most operations returning to normal, original equipment manufacturers (OEMs) are looking at alternate avenues to fuel this growth. In an interview, Ketan Patel, managing director of Hewlett-Packard (HP) India, said that factors like adoption of online education in tier II markets and beyond, enterprise refurbishing, and more could be key to growth of device shipments in the next year. Edited excerpts:

Will there be a dip in PC demand, now that the pandemic-driven boost has slowed down?

There will be a natural slowdown from the boost in shipments that happened over the past two years, but we still expect the market to grow at around 10% year-on-year (YoY) going forward. We grew at 59% YoY in terms of PC shipments in India in 2021, while the overall growth of PCs in India was 40% YoY last year. In the first quarter of 2022, we shipped more than 1.4 million devices in India – with a share of 33.2% in consumer, and 34.3% in enterprise markets. This shows that demand for PCs is still strong.

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A big part of this demand comes through leasing of devices to enterprises, which have significant market demand due to the growth of hybrid work mandates. Digitization of government departments is also a key area that will boost demand for PCs in India over the next one year. We’re also focusing on refurbishing our leased enterprise devices, which gives us a big scope of growth in the enterprise segment.

Is local sourcing and manufacturing a part of HP's plans in India?

We have expanded our manufacturing operations in the country through a partnership with Flex Industries, at a new production line in Chennai. Currently, we make products like our EliteBooks, ProBooks and the HP G8 series notebooks, as well as monitors in the country. We have expanded local manufacturing of commercial desktops in India, and a larger number of mini towers, mini desktops and all-in-one PCs are today made in India.

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Given that the demand for online education has subsided with schools reopening, could there be a slowdown in demand from that sector in the near future?

When a user is given a budget tablet with basic configuration, the customer experience is mostly poor, and such products hardly last beyond six months. This is where laptops come in, and various digitization efforts in fringe areas by governments and private players have helped in establishing a demand for PCs in such markets. India is expected to get over 240 million new, first-time internet users by 2025 – and many of them will drive demand for remote education in the next three years. Even if we get 10% of these users, that is a big user base to address.

Why does India not have a contract purchasing model for consumers – the way international markets do?

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The key issue lies with the financing part, and establishing a reliable model for creditworthiness. When I’m offering a software as a service, it is easy to offer such plans to customers – if a user defaults, the plan can simply be suspended. For hardware, there is a significant cost that a company would incur, which is why the gauging of a person’s credit rating is more important. We already offer contract-based product leasing for enterprise customers, and are presently evaluating such plans for consumers as well.

What role do services play for a hardware-first company such as HP?

Services are key to gaining clients in the enterprise hardware market. For instance, managed end-to-end IT services for a distributed workforce became very important for companies during the pandemic, since they needed to onboard employees across the country – and not at select cities and offices. The hardware being supplied is only one layer of the deal, and such services help improve customer experience for client retention in future.

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We also offer industrial services, such as managed 3D printing services, though it is still a very small industry in India.