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Rediff.com  » Business » Tech giants to prop up local PC brands, assemblers

Tech giants to prop up local PC brands, assemblers

By Bipin Chandran in New Delhi
November 21, 2003 11:09 IST
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When you can't beat them, join them. Better still, join hands with them. Leading technology companies like Intel, Hewlett Packard and Microsoft are doing just that.

All of them have put their marketing and technology strength behind the lesser known Indian PC brands and assemblers in order to gain access to new markets and a bigger after-sales service business.

The revenue potential is huge. The share of the smaller and the unbranded computers as well as the grey market is about 61 per cent of the Rs 6,000 crore (Rs 60 billion) personal computer market.

This segment sells about 800,000 personal computers annually. Sameer Kochar of Skoch Consulting says the potential was huge and a significant portion of the grey market might change over to the proper channel as a result of this.

Hewlett Packard has started selling unbranded personal computer manufacturing kits to local assemblers. The new non-branded base unit from Hewlett Packard has a chassis, motherboard, floppy disk drive, power supply, keyboard and mouse. The products may be costlier by just about Rs 5,000.

Ravi Swaminathan, vice president (personal systems group) at Hewlett Packard India, explains the advantage of this system. "For customers, it's a win-win situation. They will continue to enjoy low overall prices, the flexibility and segment expertise they expect from local resellers, plus the reliability and quality of the components supplied by the Impact Program."

Similarly, the world's largest software company Microsoft will help lesser known Indian personal computer vendors with after sales support for the hardware as well as software, offer training to the customers as well as tap the home and small business customers.

This programme will be available for personal computers from the 20 hardware partners on Windows XP platform.

"We have realised that there are some factors that limit the growth potential of the companies. We expect to address these issues," said Ananth Lazarus, group manager, small and medium business, Microsoft India.

As a part of this strategy, Microsoft would work out joint brand promotion and development activities with the hardware vendors. It will also train the hardware vendors on new technologies. Microsoft is also setting up a centralised call centre for these firms.

Take a look at Intel, the world's largest microprocessor maker. Intel helps the personal computer assemblers with training on key products, validation and bench-marking of products as well as helping them with business leads.

"The main aim is to generate demand in the market for personal computers," said Sandeep Arora, Intel's India head for channel development.

However, some view this move as giving legitimacy to the unorganised and unbranded sector. An executive with a leading personal computer company said this will help only the grey market to grow. The grey market vendors will use the brand equity of bigger companies but will continue to source the components from the grey market.
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Bipin Chandran in New Delhi
 

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