Laptop sales stagnate as enterprise deals slow

Analysts expect sales to improve this year, driven by more affordable products and helped by the central government’s production-linked incentives (PLIs) for IT hardware. However, challenges lie ahead for India’s laptops market.

Data collated from three analysts for the personal computer (PC) sector showed laptop sales in 2023 were nearly flat for a second straight year, with shipments of these devices seeing a very slim year-on-year (YoY) growth. Overall, an estimated 10.8 million laptops were shipped in India through 2023—mostly unchanged from 2022.

Net revenue earned by brands by selling laptops in India was around $6.5 billion last year, sold at an average selling price (ASP) of ₹50,000 per unit. Both revenue and ASP of laptops in 2023 remained unchanged from 2022.

HP, Lenovo and Dell are the top three brands selling laptops in India and have a combined market share of over 60% here.

Industry analysts attribute the muted laptop sales to weak demand from enterprises. “Big enterprises are not buying much, because of which the commercial demand for laptops has fallen. This is because companies are reducing IT spending to cut costs due to macroeconomic concerns," said Bharat Shenoy, senior market analyst at market researcher IDC India.

The enterprise market, to be sure, is a bulk volume contributor to the overall laptop sales in India, and is seen as a key driver of incremental sales of laptops every year—with a higher buying frequency than individual consumers. However, 2023 has been a tough year for India’s largest IT services firms—Tata Consultancy Services, Infosys, HCL Technologies and Wipro. Put together, the four companies, which employed nearly 1.4 million people as of 31 December, reduced their overall headcount by 3.5%, or nearly 50,000 people, between April and December. While this is due to a slowdown in tech services businesses globally due to inflationary and geopolitical concerns, the market for laptops is seeing a ripple effect.

Shenoy added that the enterprise segment for laptops has seen a mid-single digit annualized decline in shipments, which further contributed to the weak market for laptops. “Combined with this, the first half of the year saw low shipments since brands were consolidating leftover inventory of products. This led to a shipment decline in the first half of the year, which revived in the second half due to the festive period," he said.

Harmeet Singh Walia, senior analyst at Counterpoint India, said that the pandemic had fuelled a dramatic growth in demand for laptops and other devices in 2020 and 2021, as remote work became the norm. Once the pandemic ebbed, demand for laptops, particularly the pricier ones, subdued. “If you look at various price brackets, only the price ranges of sub-$200 and $600-800 in laptops saw marginal growth in shipments. Other categories, which include $200-400, $400-600 and above $800 remained practically the same in terms of shipments. This shows that there’s no significant organic growth in laptops, and that the pandemic-induced slowdown in laptop demand is persistent," he said.

Going forward, a revival in enterprise demand for laptops, as well as the the PLI scheme for laptops to localize assembly of these products may help bring in incremental growth over the next couple of years. “PLI-driven demand is hard to gauge right now, and it is also not clear as to how localization may affect brand margins and costs. But, a revival of enterprise demand is likely to boost growth for laptops through 2024 and 2025," IDC’s Shenoy said.

As of the September quarter, HP remained the long-term leader in laptop shipments, with an overall PC market share of 29.4% during the quarter. Lenovo and Dell continued to be in the second and third spots, with 17% and 14.6% market share, respectively.