The next billion PC users will come from emerging markets,” said Michael Dell back in October 2013, when he privatised his eponymous computer company. Eventually, Dell was bought back by its founder in a $25-billion deal. Once a global PC sales leader, the company had read the writing on the wall after ceding ground to Lenovo in a shrinking international market.
At that point, the Dell management decided that it was wiser to walk away from the constant public glare, take a long-term view of the business, rid Dell of its hardware-only image and shift focus to emerging markets. Of course, PC sales in India, too, more or less reflected the global reality of a shrinking market. The Indian PC market has degrown over the past couple of years from 11.5 million units in 2013 to 9.6 million units in 2014 after remaining flat between 2011 and 2013 (see: Low on power).
Low on power
The domestic PC market is grappling with shrinking demand
“The market records either a declining or a flat performance. All you sell is between 10 million and 11 million PCs every year. This is because of various reasons, one of which is the emergence and dominance of smartphones,” says Vishal Tripathi, a research analyst at Gartner.
When Michael was privatising his company in 2013, Dell’s share in India’s PC market at the end of calendar year 2013 was — as per IDC figures — stuck at an unimpressive 13.2%, far behind the 28.5% of HP; Lenovo was then just a percent shy of Dell.
The company managed to improve this figure by 9% by the next year and its share in the first quarter of CY15 stands at 23.4%, barely 2.6% shy of market leader HP, thanks in no small part to the exit of some of the existing players. So, to keep its head above the water in a shrinking market, Dell enforced two major changes — one, focus on the enterprise market, where customer relationships are stickier and two, venture deeper into smaller towns and cities, where PC penetration is not high.
Dell’s ambition is to establis