1. IT Industry Performance Annual Review: 2007-08 Press Conference New Delhi: July 08, 2008

2. ITOPS Only Demand-Side Study on the Indian IT Hardware market Industry Validation of the Market Figures Longest Running Tracker Study on the Indian IT Hardware market Largest Tracker Study on the Indian IT Hardware market About ITOPS… An Introduction

3. Only Demand-Side Study on Indian IT Hardware Market… Designed to deliver the much needed demand-side insights Data is collected after ‘Last Mile’ Market/ Customer Sentiments No undercounting/over counting stock in pipeline Includes direct imports by customers Accurate estimation of assembled market Factors in the market/ customer sentiments and opinion along with industry level indicators Accurate assessment of Buyer Profile Identification of Emerging Segments Identify and observe Market Trends “Who bought”, “Where used”…Not dependent on ‘perceptions’ of reseller/ channel member/ vendor Need to monitor changes in user’s perspective to obtain cues for innovative marketing ITOPS

4. The Study covers a sample of around 24,000+ entities per round The study is conducted on a bi-annual basis covering the following time periods H1 of FY: April to September H2 of FY: October to March … across the Top 22 cities Greater than 1 Million Pop Towns except Bhubaneshwar & Guwahati 10,000+ Estabs 14,000+ Households 24,000+ Entities Largest Study on Indian IT Hardware Market… Coverage in 22 Cities

5. 1996-97 1998-99 2002-03 2003-04 2005-06 Launch of ITOPS as an annual Study ITOPS becomes a Bi-annual study Launch of supplementary channel survey for in between quarters Coverage scaled up to 22 cities from 16 cities ITOPS completes its 10th year, thus being the longest running IT tracking study Longest Study on Indian IT Hardware Market… Existence of over 11 Years

6. Industry Validation… Two Pronged Validation Process MAIT Findings on Market-size projected to All - India Urban market Various IT Players Validation Validation The findings from ITOPS is accepted as the official market performance of Indian IT hardware market by Manufacturers Association for Information Technology (MAIT), the nodal body for IT hardware industry in India. Information used by Govt. of India for all IT & allied planning.

7. 7 Sampling & Projection Household Using SEC A-C household population as obtained in the National Readership Survey – the largest household survey in the country Establishment No framework for sampling and projection were available Thus, a new framework called Ace Grid was developed by the ITOPS team This Grid stratified the establishments by Principal activity performed at the establishment classified by number of employee.  Principal Activity defined:  Manufacturing/ factory/ Warehouse  Office  Outlets  Government  No. of employees defined:  < 10 employees (Small establishments)  11-50 (Medium establishments)  50 + (Large establishments) The Ace Grid has found application across researches involving business segment across geographies Sampling & Projection…

8. Some Insights that ITOPS has provided …

9. 9 Insights on IT market from ITOPS Our InsightsWhat happened? IT market moving towards the smaller cities – ITOPS 2001 Pro Today, the smaller cities constitute close to 50% of the households. Vendor targeting a wider canvass benefiting the most. PC usage not restricted to upper and upper middle class households only. It is increasingly percolating to middle and lower middle class – ITOPS 2002 Pro Increased targeting of the segments through price reduction, interest free loan schemes helping in targeting the segment. Students a key target segment in the households – ITOPS 2002 Pro IT players launched PCs targeted at the students community. WiFi adoption in the country is expected to take time! – ITOPS 2002 Pro Though many WiFi zones have come up in major cities of the country, it is still not very popular among the Internet users. Education the key reason for purchasing PC in a household – students the main focus – ITOPS 2002 Several PC vendors launched PCs targeted specifically at students and running special promotions for students. Universities a key focus for most Notebook vendors.

10. 10 ITOPS: Comprehensive coverage  Product coverage:  Computers- Desktop PC, Notebooks, Servers  Printers- DMP, IJP, LJP  Peripherals- Monitors, keyboard, scanner, zip drive, CD writer, Print server  UPS- UPS  Networking- Incidence, size of networking (no. of nodes)  Networking products- NIC, Hubs  Internet- Active internet subscribers, Modems

11. And the findings are…..

12. 12 Total PC (Desktops & Notebooks) sales: 2002-2008 CAGR 2002-08: 26% Growth over 2006-07: 16% Units

13. 13 Total PC (Desktops & Notebooks) market: Regional spread Figures in the brackets represent the growth in 2007-08 over 2006-07 (-13%) (39%) (10%) (39%) 7,344,306 Units 2007-08 PC consumption in both West and South grew by 39% each; in East it grew by 10% while in North it declined by 13% 6,341,451 Units 2006-07

14. 14 Notebook sales: 2002-2008 Annual sales grew by 114%; CAGR: 104% Households accounted for 44% of the market growing 150%, Businesses accounted for 56% of the market growing 93% Units

15. 15 Notebook sales: City-spread Notebooks are fast penetrating beyond the top 4 metros; growth rate 152%

16. 16 Notebook Consumption in Businesses - by employee size % Units Overall consumption in the business grew by 93% Consumption in large and medium enterprises grew by 51% and 123% respectively, in small enterprises it grew 174%

17. 17 Desktop sales: 2002-2008 CAGR 2002-08: 19% Growth over the 2006-07: 1% Units

18. 18 Desktop market: Regional spread Figures in bracket represent the growth in 2007-08 over 2006-07 (-14%) (10%) (7%) (4%) 5,522,167 Units 2007-08 Desktop consumption in West grew by 10%; in East it grew by 7% each; in South it grew by 4% while in North it declined by 14% 5,490,591 Units 2006-07

19. 19 Desktop Market: Share of Indian, MNC & Informal 2007-08 Consumption of Indian brands decreased 4% in absolute terms Sales of MNC Brands grew by 16% however that of Informal sector PCs declined by 12% in absolute terms 2006-07

20. 20 Desktop sales: City-spread Consumption in Top 4 metros declined by 28% while sales outside the Top 4 metros grew by 14%

21. 21 Desktop sales: 2002-08 Desktop market growth over 2006-07: 1% Consumption in households grew by 55%; in Businesses it declined 18% Units 23% 28% 26% 81% 72% 60% 75% 25% 40% 74% 19% 77%

22. 22 Annual Desktop sales: Business by employee size Overall sales to the Business segment declined by 18% Sales to small and medium enterprises grew by 25% and 8% respectively, however in large establishments it declined 33% % Units

23. 23 Profile of Desktop buyers: Principal activity of the establishment % buyers Consumption in Government grew by 7% and in factory locations by 47% Consumption declined in office locations by 21% and in retail outlets by 29%

24. 24 Profile of PC buyers in Households by Socio-economic class % buyers Overall Households consumption grew by 55% Consumption in SEC A grew by 50%, in SEC B by 68% and in SEC C by 43%.

25. 25 Server sales: 2002-2008 Annual sales increased: 35%; CAGR (for 6 years): 17% Units

26. 26 Server sales: Business by employee size Overall sales increased by 35% Sales to small and medium enterprises grew by 127% and 121% respectively, however in large establishments it declined 37% % Units

27. 27 Server sales: City-spread Consumption in Top 4 metros declined by 17% while sales outside the Top 4 metros grew by 64%

28. 28 Active Internet entities: March’99 – March’08 (Entities are establishments/individual with internet connection; an entity may house/ be multiple user/s) Overall entities with internet grew by 20% over March 2007 Businesses accounted for 29% of the entities growing 6% while Households accounted for 71% of the market growing 27% ’000 Units Translates to 52 million internet users

29. 29 Internet penetration: March 2008 Business Segment Home Overall46%21% Top 4 Metros50%25% Next 4 Metros42%17% Other 8 Metros46%16% Remaining 6 Metros28%11% SEC A -43% SEC B -16% SEC C- 6% Internet Penetration by Town class and Socio-Economic Classification (SEC) among Top 22 Cities Internet penetration by Town class Internet penetration among households by SEC

30. 30 Mode of Internet access in Businesses: March 2008 DSLData Card DSL inching ahead. Data Card fast growing in popularity

31. 31 The Market of 2007-08 Vs 2006-07

32. 32 The expected Market for 2008-09

33. 33 Thank you!