But there were always the brighter spots that kept things moving—the PC components shortage was resolved and India emerged as the only APAC country to have double-digit positive growth in this segment. Internet penetration spiraled upwards, but increased competition again led to massive price cuts. Then there were free ISPs functioning in the same space and providing the same services—value-adds emerged as the ISPs’ only milch cow, as mere Net access was not enough to sustain operations. Private international gateways were allowed and the bandwidth stranglehold, though still painful, was no longer near-fatal.

All in all, it was a year of action. Viewed segment-wize, most of IT India ended the year healthy, but you’d better this adjective with a pinch of salt—the impact of the slowdown on balance sheets will be reflected only in the next two quarters. Remember the profit warning by Infosys Technologies chairman NR Narayana Murthy that broke the stock market’s back, and Ketan Parekh and his shenanigans… the Sensex is yet to recover from the dual shock. It’s been a year that has tested to the limit the mental toughness and adaptability of those that run Indian IT companies. It’s been a year that has provided a clear warning—to consolidate, widen the horizons, cut down flab, plan for the future and implement…

PCs and desktops

With components shortage a thing of the past, India was the only country in the region to post a positive double-digit growth rate in the last quarter. The old and faithful home and the small-office-small-business (SOSB) segments, which were driving sales over the last two years, drove demand even harder. All but one top vendor, Dell, focused strongly on the fast-growing market, leading to a price war that had buyers buying branded PCs for only a little more than an assembled one would cost. In the commercial desktop segment, it was banks and insurance companies that led the demand drive. Compaq, which did so well this year in server sales, was a strong force in the notebook segment as well, upstaging last year’s leader IBM to the top slot this time around. Toshiba, under HCL’s strong sales force, managed to grow by over 50%.

It became clear to the big names in the market that the potential was huge, if only they could take on the assemblers. Companies like Zenith and PCS continued to lower prices until they threatened other big brands, and assemblers as well. While MNCs and domestic players have slugged it out, the assemblers remained a strong force. However, while PCS did really well and all but doubled its numbers, Zenith seemed to have lost its way and seems destined to remain rudderless for some time still. The real battle is happening up there—between the two Big Guns, Compaq and HCL. As for the assemblers, they ended as the kings, retaining their over-50% hold on the SOSB market and over 75% of the home-user segment.

Packaged software<