Redington forecasts AI-enabled personal computer rebound in India

AI-enabled PCs: Chennai-based global tech goods distributor Redington anticipates a significant resurgence in the demand for personal computers (PCs) in the upcoming fiscal year, driven by the integration of artificial intelligence (AI) features into new devices, according to a top executive.

In the wake of a prolonged period of sluggish PC sales due to consumer reluctance caused by inflation, Redington's CEO for the Singapore, India, and South Asia (SISA) region, Ramesh Natarajan, expressed optimism about the potential for growth. He stated, "The advent of AI in PCs will also drive tech refresh," indicating the company's expectation of single-digit percentage growth in the PC business for fiscal 2025, following declines observed over the last six quarters.

The term "AI-enabled PCs" refers to machines equipped with chips capable of processing large-language models and AI-powered applications directly on the device, eliminating the need for cloud-based processing.

Neil Shah, Vice President of Research at Counterpoint Research, said "Considering the replacement cycles for PCs have averaged around three to four years, we believe 2024 will be the year that will see some rebound," highlighting the potential for a significant uptick in PC upgrades.

Despite a recent 7 per cent decline in revenue from Redington's end-point solutions unit, responsible for distributing PCs and printers, there is a sense of opportunity for growth, especially in the wake of the COVID-19 pandemic, during which businesses and individuals heavily invested in home office setups. However, a substantial portion of potential upgrades remains unrealized.

Furthermore, Natarajan foresees promising growth prospects in Redington's mobile phone business, particularly in the higher-end smartphone market segment, where affluent consumers are increasingly willing to spend on devices priced above 30,000 rupees ($361.30). The mobile phone segment in the SISA region witnessed a remarkable 61 per cent revenue surge in the first nine months of fiscal 2024.

To diversify its revenue streams beyond gadget distribution, Redington has been strategically focusing on its cloud services business, recognizing its potential to contribute significantly to the company's overall revenue portfolio.

(With Reuters inputs.)