On PCs in India

I entered the business of technology in the 1970s lured by the

high growth potential of the industry and the hefty margins enjoyed by component

traders at that time. Not satisfied with selling other people's products,

Zenith was established as a brand against major competition over 25 years ago.

This was even before the PC was born. We introduced new technologies such as the

Open OS, SuperCalc to India even before the multinationals did and being an

industry pioneer is the reputation we have enjoyed since.

The first PC products had high levels of innovation for high-end

corporates and some of my clients include the recent president of the country.

It was a time when PCs were a specialty product and I remember a deal where we

bartered a PC against flats in Mumbai. At this time, the price of a PC was Rs 3

lakh.

We have always believed that the country needs PC penetration

and it has been our endeavor to improve technology and reduce prices. We are

known as a price warrior of the industry and are always glad to be attributed

for PC growth in India.

Unfortunately, the belief that the demand for PCs will grow as

the price reduces, is not exactly another Moore's Law. When I was selling

laptops way back in 1991, the common saying was 'if the price goes from Rs 2

lakh to Rs 1 lakh, everybody will buy a laptop!'. The price is now as low as

Rs 25,000, but laptop penetration is still negligible compared to more developed

economies.

The bigger issue is the demand for a so-called '10k' PC. The

government's belief that PC demand will shoot to 28 mn units at the magic

price point has been proved wrong. Zenith decided from day one not to indulge in

this product which is a lose-lose situation for the manufacturer, suppliers,

dealers and the customer. Yet, compared to China and Mexico's PC penetration,

India, being a knowledge economy, cannot compare. Then what is the factor that

will boom PC penetration in India? The answer-software.

Much to my chagrin, hardware has always been the foster child of

the India government. The government and various bodies have been pressurizing

PC manufacturers to reduce prices. And we have given in. From selling PCs at Rs

3 lakh, we are now selling it at Rs 13,000. Yet, the results have not been

achieved. Even if the PC price becomes Rs 1,000, the demand will not grow

exponentially.

Looking at the contribution of hardware, what has the software

sector done to increase PC penetration in the country? Have they made software

for use in vernacular mediums so that every Indian in every small town uses a

PC? What stopped them from making an OS specific to India?

In my opinion, the software segment has done nothing to help the

cause.

Right now the cost of software is more than the cost of

hardware. The PC prices may become one-tenth, but the cost of OS, word

processing, anti-virus, etc, is still constant. Till the price of software does

not reduce and is not made in vernacular languages, the government can stop

dreaming about PCs-for-all.

Why doesn't the government put a 5% IT surcharge and create a

software fund, like in the case of other industries such as steel? Why won't

anybody point fingers at software companies and ask them to make software for

India the way they have made for China? Why won't an Indian large software

conglomerate ever create a product for India?

The hardware industry has contributed in building the base for

PCs in India through innovation and price drop, and taking the PC to the Indian

hinterland. It's time the software guys did something too.