Right on Top

For many years, notebooks were too expensive in comparison to desktop systems

and skimped on too many features. No more.

In the last few months the prices of notebooks are going south, a pointer to

that end comes from the existing price war in the laptop market in India.

A notebook that cost around Rs 80,000 a year ago, today vends at Rs 49,000.

The price war is being triggered none other than industry heavy weights like HP,

Acer, IBM and the likes denting the sub Rs 50,000 price point.

The actual starting point of this price war can be traced back to the last

quarter of 2003 in which Acer rolled out a sub Rs 50,000 notebook. Then HP

followed suit with its launch of a Compaq Presario notebook priced at Rs 49,990,

powered by an Intel Celeron processor running a Linux OS. With its competitors

inching ahead, can IBM be far behind? It answered the competitors by launching a

low priced notebook -ThinkPad R40e, powered by Mobile Intel Celeron 2.0 GHz

processor and with Windows XP at a cost of Rs 50,000. Similar machines at this

range mostly comes preloaded with Linux.  The latest one to join the

bandwagon is Dell, which has rolled out a notebook at Rs 48,900. With all these

developments, a notebook that was once considered as a luxury and limited to few

globetrotting executives is now becoming increasingly affordable. Also the duty

cuts, announced by the government in its January 2004 mini-budget, has helped

further in increasing the laptop penetration.

With the Rs 50K barrier breached and notebook prices continue to fall, the industry expects a 50-60% growth for the next few years

Lap it Up 



Industry analysts cite that the notebook market will grow at a healthy rate

of 50-60% during this fiscal year. The major consumption for the low-end

offerings will be coming from the SMB and the SOHO segment. The product

configuration will also be a key driver in the low priced notebook space. For

instance, the sub Rs 50K category is becoming more value based in terms of

configuration. So the initial drawback in low-priced notebooks like bulky and

basic configuration will be a thing of the past as users will opt for a notebook

not just for the price but also for its performance. 

Says Sanjeev Menon, brand manager, mobile computing, Personal Systems Group,

IBM India, " Our entry level notebook strategy is to provide a value for

money for the consumers. A low priced notebook will succeed only if it has the

key features, a customer excepts–a mobile processor, higher memory, good

optical drive and easy manageability."

"Branded notebooks will have a good time in the coming days as increasingly the MNC players are bringing in great value at a lower total cost of ownership (TCO)" S Rajendran, general manager –sales and marketing, consumer products group, Acer India

On the vendor part, things are getting better by the day as they have the

luxury to indulge in the price war because the notebook component prices have

been declining steadily in the last six months. For instance, the LCD panel,

which constitutes 40% of the notebook price depends on the liquid crystal

display (LCD) glass. Earlier, since the supply of glass used for making LCD was

very limited, the user had to bear its cost. Not anymore. Since the last quarter

of 2003, the TFT / LCD panel supplies have eased considerably, and as a result

vendors can roll out more feature packed notebooks with lots of preloaded

software goodies.

With this development, the notebook market has become clearly defined - low

cost high volumes - the sub Rs 50K segment and high cost low volume–Rs 80K and

upward.

Says S.Rajendran, general manager–sales and marketing (Consumer Products

Group), "Branded notebooks will have a good time in the coming days as the

MNC players are increasingly bringing in great value at a lower total cost of

ownership (TCO)."

Agrees Jitendra Kulkarni, CEO, Redington India, "Notebook volumes are

clearly going up, and we are seeing a good demand from the SOHO segment. With

the decline in components I also see the emergence of notebook assemblers

breaking into the sub Rs 30,000 mark."

Impact on Desktops



The situation is only getting complicated for the desktop buyer. Today one

can get a branded P4 Desktop with a pretty decent configuration at around Rs

35,000. If potential buyers can just add an additional Rs 12,000, they might

well end up with a laptop. The gap between the desktop and the notebooks is fast

narrowing down. But the user has to do some homework in terms of the

functionality of the notebook before taking the plunge. For instance, a notebook

sporting an Intel P4 is still in the domain of sub Rs 70,000. But a branded P4

with Hyper Threading (HT) processor desktop is fast going into the sub Rs 35,000

price point. So the scenario right now is that first time PC buyers in the home

segment will most likely settle for an advanced desktop, while home users,

already owning a desktop, will go in for low priced notebooks instead of

spending money on upgrading the existing machines.

However, on the enterprise side, many industry analysts see a positive trend

and with the workforce increasingly becoming mobile, the crash in notebooks

prices could not have come at a better time.

Shrikanth G in Chennai

Best Practices for the Notebook-buyer

Size, weight and usage Think Notebooks, think underwear... very personal.

Just because it fits you, it may not be the right one for the marketing person.

Check the usage of the user, his comfort level with the notebook before ordering

one. For example, if the user is on the move he would have portability as his

key consideration. Compare this with another executive who would like to use the

same as a desktop and can carry it home when he leaves the office premises every

day. He will be happy to settle for something more bulkier yet with all the

works thrown in.

Battery life: Again a factor of usage. Opt for higher battery life

especially for people looking at portability

Accessories: There are a few other accessories you should consider–a

security lock, a car/plane adapter so that you can run your notebook from a car

or airplane outlet. You could also opt for an AC inverter that converts car

power into AC power and a universal transformer that powers multiple brands of

laptops as well as cell phones

Upgrades: While it’s easier to upgrade desktops, notebooks are a

difficult proposition. But a few precautions can certainly help to increase and

speed the life of the product. Make sure that the notebooks are configured to

keep room for future upgrades.

OS: Check whether the OS bundled is user friendly

Warranty: Does it carry a comprehensive warranty?

‘Notebooks Will Challenge Desktops’ C Yella Reddy, sr vice-president and head of IT, Global Trust Bank

The near desktop price for a notebook PC is a dream come true for corporates.

This will lead them to rethink their strategy in providing notebooks to the

middle level managers. I feel this development will propel Wi-Fi and lead to the

growth of hotspots in Airports and major Railway stations. Meanwhile, as

notebook volumes grow, it will create tremendous pressure for network security

professionals, as they have to ensure smooth access and authentication without

compromising security controls.

I am also hopeful that home office working culture would increase with the

current notebook PC prices and in the process employee productivity improves

tremendously. The scenario now clearly indicates that notebook revolution has

just begun in India and I think it will go on for the next three years and in

all likelihood will pose threat to the desktops.