The $199 PC

This is one ghost that refuses to go awaythe low cost PC. We
have seen so many attempts earlier, starting from the year 1990, for a peoples
PC, and all of them have miserably failed. While we all believe that acquisition
price is a major barrier for PC penetration in India, we have somehow not been
able to crack this challenge to get desktops within the common mans reach.

Lenovos announcement that it will soon be launching the $199
PC in India however brings in an entirely different perspective to the low cost
game. This announcement is not from the kids in the PC game, but from a
giant.

This PC giant, who gobbled up IBMs desktop and notebook business
sometime back, is of a different mettle. It has already launched the $199 PC in
China, and it is definitely confident, after the initial response there, to
launch it in other places, including this big market called India. And, it is
moving silently but rapidly. For instance, Lenovo has more than doubled its
channel partners strength in India, and taken it over the 2,000 mark.

There are good reasons why everyone is confident that Lenovo
might make it happen. This giant has the muscle, money, reach, and other
resources to make this experiment successful. And especially in this case, it
has the experience because of its China background, which gives it a better
understanding of designing and launching of products for the budget conscious
emerging markets.

But more than all this, Lenovo will find it much easier to rope
in the other biggies who will have a role to play. In the past, we have seen
absolutely no support, beyond some initial lip service, to this low cost
initiative from players such as Intel or Microsoft. Nobody can deny that if
these players take this up seriously, they can make the low cost PC happen.

The two big challenges to the success of the low cost PC are not
new. The first and foremost is the consumer mindset. While people would love to
pay only Rs 8,000 for a PC, but they want all the features of a Rs 25,000 PC. To
keep motivation and interest of the distribution channels high enough, through
which this low cost PC will be pushed, will be the other test for Lenovo. The
company will have to come out with some very innovative USPs for both of them.

I have always believed that there is a big need for a low cost
PC in a country like India. Today, There are millions of people for whom a Rs
25,000 PC is beyond reach, but a less than Rs 10,000 PC will be very easy to
buy.

The low cost initiative is happening in so many other areaslow
cost TVs, low cost cars, and in fact ultra low cost mobile phone handsets, and
has proved to be a hit almost everywhere. But, somehow, the PC guys seem to have
given up. I think this is the time when maximum energy should be in that
direction. I am told that in China there is lots of government backing also for
initiatives, which can take technology to the masses. I would urge the Indian
government for a similar support.

And more that anyone else, I think that for the PC players too
the equations of economies of scale might be completely changed, if low cost PCs
take off. You never know.

The author is Group Editor of Dataquest.

ibrahima@cybermedia.co.in