A vast majority of the small scale industries, which was yet to embrace IT products and services, is planning to adopt the computing technology in a big way with their total demand for PCs estimated as over 4.8 million pieces by the end of 2005.
"Over half of India's non-PC small businesses located in major cities have expressed the intent to embrace the benefits of computing technology by the end of 2005. This translates to an enormous planned PC-hardware market of over 4.8 million computers," a recent study by New York-based IT consulting firm Access Market International Partners Inc, said.
Pointing out that only a sixth of the SSIs currently possessed a computer, it said "the situation will change quickly since India is unquestionably on its way to becoming a major IT power."
While low cost computers rolled out by PC makers may have contributed to the increased demand from the SSIs, "an overwhelming factor is a fear of being left behind in the race for business and technological superiority," it said.
Over 40 per cent of the SSIs admitted to "an apprehension that others will use PCs and the internet to gain a competitive edge."
More than one-third mentioned direct pressure by their business partners (suppliers and customers) as a motivation for purchasing PCs, it said.
However, despite introduction of low-cost PCs by branded PC makers, "the assembled or white-box computers still rule the mind space of small businesses intending to purchase a computer in the next 12 months," the study said.
Over half of prospective PC purchasers still expressed a desire to buy unbranded PCs.
"This is not due to only the price factor but to the efficient and personalised service offered by the value added resellers who mainly promote assembled computers," observed Dev Chakravarty, senior analyst at AMI-Partners.
Among the branded desktops, HCL, Lenovo and HP/Compaq had a slight edge over other manufacturers, the study said.
However, there was still a big question mark among the SSIs over the usefulness of IT in their businesses.
"Over 60 per cent of India's non-PC small businesses still maintain that computing technology has little relevance to their businesses or that the benefits are not worth the cost," it said.
Some were also reluctant to adopt computers due to a fear that data "may be stolen or copied" while two in every five SSIs admitted they were hampered by the "complexities" of PC installation, support and utilisation.
In this view, introduction of short-term training programmes by PC vendors and PC-financing or leasing options could go a long way toward overcoming the barriers and promoting PC penetration, it said.