Breaking the Rs 10K Barrier

PC for the masses at Rs 10K-this has long remained an idea. So when HCL

recently announced a desktop at Rs 9,990 in agala all India launch in Chennai,

it was hailed as a landmark achievement. Sure it is, as we retrace the footsteps

of the PC boom in India. From a luxury and business necessity, a PC has become a

home leisure product like the TV. And realizing a lot of untapped potential,

vendors like HCL and Xenitis have taken a plunge into the sub-10K PC market with

fully functional desktops: 128 MB RAM, 40 GB hard disk, 52X optical drive, and

15" color monitor. While HCL's low-cost offering comes with a Via

processor, Xenitis' low-cost variant, at Rs 9,790, offers an Intel-based CPU.

However, the processor speed for both the offerings is just about 1 GHz.

HCL's latest low-cost offering at Rs 9,990

Says Ajai Chowdhry, chairman and CEO, HCL Infosystems, "Our idea of

launching a fully functional PC at this price point is to drive home the point

that low cost does not mean low in quality. All our PCs follow very stringent

quality tests before they reach the consumer. We are adopting a multi-pronged

strategy in reaching out our sub-Rs 10K offerings." That would be a key

challenge, as vendors would be addressing the buyer segment of the bottom of the

pyramid. But HCL's Chowdhry firmly believes that financing options can help

this low-income group to invest in gadgets like PCs. He says, his company's

"PCs on EMI" scheme was a great success.

Emerging trends



The day HCL announced its sub-10K model, Kolkata-based Xenitis also made a

low-key launch of its PC in the similar price bracket. With margins on PC

business-getting wafer thin in the recent times, the vendors are hoping for a

boost in volumes. Though HCL refused to divulge the expected volumes for its

latest low-cost PC, it believes the B and C class pockets will be the target

market segments.

However, it is not going to be an easy job. It will require a lot of buyer

education on the part of vendors to convince the consumers to opt for a PC. But

this development has all the trappings of a trend in the making for the PC

industry in India. For instance, when mobile phones came in, it was a luxury.

But now it has become a gadget even at the grassroots level. Similarly, when

satellite television first forayed into India, and ushered in a concept of

television channels on monthly subscription fees, many did not buy in initially.

Many analysts believe that the sub-Rs 10K desktop will take the idea of

"PC as a commodity" one-step closer in India. As Dayanidhi Maran,

Union Minister for Communications and IT puts it, "Skeptics might say that

the sub-Rs 10K PC just has a 1 GHz processor, but I personally believe that for

the kind of applications a common man uses, this configuration is more than

enough."

The other impact of this development could be the growth of Internet usage in

the country. While the sub-Rs 10K PC does not come with a modem, vendors believe

that the buyers will ultimately Net-enable their PCs in time due to the

awareness they derive after buying the PC. Another analogy given is that when a

consumer buys a TV he goes for a cable connection, and then a DVD player in due

course. If one goes by the same logic in desktops, the potential indeed looks

very promising. At the same time the low-cost PC is also expected to act as a

springboard for users migrating to much more powerful PCs as they get used to PC

usage and go to the next-level of technology in time. But one thing is for sure:

this development will infuse fresh blood into the PC industry.

Shrikanth G in

Chennai