Ever wondered what would happen if you were not able to get new parts for your computer instead of your old obsolete parts. If so there would have been only two options left, either one had to buy a whole new computer, which would definitely be a costly affair whole together or would stop using the computer, which again in this technological era is definitely not possible. So in the recent years a huge industry for these parts have emerged into two segments called the computer peripherals industry and the computer stationery market. Both are known to serve with accessories related to the main computer industry.

Computer peripherals include monitor, print cartridges, different types of computer mouse, mouse pads, Keyboards, scanners, toners, disk drives, web cameras, pen drives, CD writer, floppy, CDs, carbon ribbons and many more. While computer stationery comprises of different sizes of printable papers, labels, carbonless papers, fullscape paper, thermal sensitive papers, fax rolls and list is almost exhaustive. Though these markets, during the years have seen an upward curve, it's sales is mainly dependent on the computer device or PC and so the growing ratio of the industry is directly proportionate to the growth of the computer industry. It is assumed that almost 90% of sales in the peripherals segment are dependent on PC sales. The rest is the replacement market, which comes into the picture for peripherals like the monitors, printers and scanners.

Peripheral market review

The estimated total size of the current peripheral market is said to be fluctuating between Rs.1,500 - 2,000 crore a year. Though a small market in comparison to the huge PC industry, over the years the market demand for these goods is increasing day by day and the industry for these goods is said to be growing at the rate of 20 % every year. As companies, banks and government offices go for more computers and networking and when more houses buy PCs and access the Internet, the market for these products gets the natural fillip. Computer peripherals and computer stationery sector is in for a revolution of sorts in the country. According to industry estimates PC sales in India will reach 22 million units by 2010. When the PC market is poised to reach such a size, it is but natural that peripherals too will clock similar growth rates and no company can afford to ignore such a market.
Global & Local Competitive Scenario
With the growing demand more and more manufacturers and suppliers are born in this industry everyday resulting into tough competition. India is slowly becoming the biggest marketplace for computer peripherals and stationery. The industry is characterized by rapidly changing environment with new models appearing in a very short span of time. The market is made up of a blend of Indian and foreign brands.

Global companies such as Hewlett-Packard, Canon, Xerox, Samsung, Lexar, Kingston, PQI and LG are viewing India as an important market for peripherals as it is still nascent and holds tremendous potential. Major plans to garner a significant market share of the Indian computer peripherals industry have been drawn up by these players. High degree of technological obsolescence and absence of domestic technology have increased dependence on imported products. Foreign brands dominate the peripherals market with a 70 percent market share and the local companies fighting for the balance. Most producers operate on wafer thin margins and rely on volumes to generate profits. In computer stationery too, there are many renowned brands.

Industry Consumption Pattern

The hardware industry in future is expected to grow more with increased penetration of IT across India and once this transpires the industry is sure to flourish further. The IT enabled service sector is expected to surpass the noteworthy performance of the Indian software sector, and has being growing at a dizzy pace. With the opening of the insurance sector for foreign investment many world majors have entered the market and have serious IT peripheral requirements. The other industry sectors that are generating maximum demand for peripherals are banking & finance, insurance, telecom, education, manufacturing, and retail. The retail sector has witnessed the springing up of large malls major cities across India. Major e-governance and digital divide initiatives of the federal and state governments are also driving IT and peripherals consumption in the country. Big distributors and vendors are looking at consumer durable channels to increase sales. Using the consumer durable channels offers certain advantages. To begin with, this route would ensure a higher footfall compared to conventional IT retail outlets. This puts consumer-IT companies like LG and Samsung at a greater advantage compared to IT-only vendors. Another retail strategy is the sale of IT consumables at stationery stores.
If one is looking at sales ratio, customer choices and needs also controls the sales. Customer purchase decisions are influenced by factors such as initial cost versus recurring cost, For example: Products like Inkjets have a low initial cost but higher recurring cost. The average cost of an inkjet printer's refill cartridge is much higher than that of the refill cartridge for a dot matrix printer. But Inkjets deliver a much higher quality printing and offers color printing advantage. Also Lasers have a high initial cost. Other factors influencing the sales in the market are brand preference, technology, and after sales service. Over the last five years sales of Hard Disk Drives with a higher storage capacity has been seen to increase. CD-ROM drives are being gradually phased out of the Optical Disk Drives market and being replaced with CD-R/RW drives. These days, the demand for CD Writers has increased and CD-ROMs are a default feature in most big brand PCs. DVD-ROM drives though are gaining popularity, these are still in the up market category. Also Monitors, another important peripheral, is another major growth area. South Korean rivals, LG and Samsung, are aggressively fighting it out in this space, leveraging on their brand equity as leading consumer electronics companies in India.
As per Mr. Moninder Jain - Director Logitech Electronic India Pvt Ltd. "Logitech is in India at an exciting time. People are entering the digital lifestyle phase and will continue to get hooked on personal computing devices for work and entertainment. With the maturity in the market comes sophistication in consumer demand. This is positive for us, since we offer consumers an exciting range of peripherals for various needs. The gifting market too has evolved because of this and consumers chose to give their friends and loved ones more high-involvement & engaging products that more personal in nature."

Unfolding the prospects of peripheral industry

No doubt the industry is flourishing with new products but with the invention and advent of every new product there is a new dealer or supplier immerging with it which eventually increases the competition further in the industry resulting into thinner profit margins. With such kind of growing competition among existing suppliers today there is not much space for any player to open retail showroom unless they can withstand high gestation periods. But experts of this field predict that the following year will offer more hope and stability for both the PC as well as the peripherals industry. The factors, which will help the industry to boost further, are a redefinition of strategy, innovation, and strong competition. One significant development to affect the fortunes of the hardware and peripherals segment will also be of long-standing efforts by all players and the government to perk up the market in smaller cities and towns. More than half of India is rural and it is this part of the end-user segments that is expected to jumpstart major sales. Both, the Indian federal government and local state governments have adopted a wide range of programs to increase the reach of IT across India. Through incentives - ranging from tax holidays to government monetary assistance - the process of pushing IT to the masses has started a few years ago, and is expected to reach fruition by 2008-10. The consumption in these cities is expected to double. Though this still would be a small absolute number, it would be enough to alter the strategies of vendors in the peripherals segment.

The change in information availability, the change in the supply chain management structure, cost-effectiveness, process efficiency, the increasing number of virtual stores and e-tailing will additionally contribute to make selling different in this industry. Like earlier, the home customer would typically go to the nearest dealer, put forward his requirement and check out on the pricing. Today, the customer visits various dealer's Website from the luxury of his home, figures out the technical specifications that match his requirement, locates the dealer nearest to his home, touches and feels the product along with his family and brings it home. Besides cost savings, promotional campaigns focused on actual benefits instead of technical jargon makes the pitch more palatable and increases interest even in those not well versed with technology. The future for this industry is definitely bright if taken about in a systematic and rationalized manner.