The Top Five in the Five Million

HCL

The
undisputed Indian market leader so far. The only question is how long it can
retain its #1 position. Growth has been slow compared to industry and
competition. In 1997-98, it shipped close to one lakh PCs, which included pieces
manufactured through HCL’s alliance with HP. It reached 101,500 in 1999-00,
growing at a CAGR of only 6% during the two years. Also, HCL has not been able
to maintain its significant lead in numbers it had earlier. HCL’s PCs were 50%
more than its nearest rival but after the HCL-HP combine broke up, an aggressive
positioning by the competition has seen the gap reduce. The difference between
HCL and Compaq, the #2, was only 20,000 pieces in 1999-00; much lower than the
50,000-plus gap in 1998-99.

The strategy seems to be to move towards the higher-margin services and HCL
is concentrating on becoming an end-to-end solution provider leveraging on its
installed hardware base. Also, it seems to focus its PCs more for homes. HCL is
using such marketing tactics as road shows and carnivals across the country to
build brand share in a market increasingly dominated by MNCs. It remains to be
seen whether all this can help HCL, the #1 Indian PC company, retain its
position.

E-4/5/6, Sector XI, Noida 201301
Tel: 4555219, Fax: 4550923
Web site: www.hclinfosystems.com
Chairman and CEO: Ajai Chowdhary
Revenue (1999—00): Rs 996 crore

Compaq

Compaq
reclaimed its #2 spot in 1999-2000 from Zenith, which shipped 1,000 PCs more
than Compaq in 1998-99. Compaq saw strong growth in the home segment where,
according to our estimates, it grew by over 200%, from 7,214 in 1998-99 to
21,784 in 1999-2000. However, at the corporate desktop level, it seems that it
is yet to get the top-of-the-mind recall that HP’s Brio enjoys. Compaq plans
to address this with its Deskpro EP range of PCs. However, its clear focus seems
to be the home and this is where the company hopes to get the maximum market
share, both in value and volume terms.

Also, according to IDC, Compaq could emerge as the top player in the Indian
market–the September PC channel sales figure puts the company in the top
position. The report pegs Compaq’s market share at 7.9% with September sales
at 9,297 units. However, the company is going to face the heat from HP on the
home and corporate front and from IBM, which looks strong on the corporate
front.

92, Industrial Suburb, II Stage
Yeshawanthpur, Bangalore 560022
Tel: 3374785, Fax: 3374395
Web site: www.compaq.com
Managing director: Balu Doraiswamy
Revenue (1999—00): Rs 1,085 crore

HP

Still
recognized more as a printer company, HP has been doing a great job in the PC
market. At #3, it has been able to give “value for money” with its
low-priced Brio. It upstaged Zenith’s highly successful “MNC value at
Indian price” proposition. So successful has been the pricing that nearly a
third of HP’s PCs probably goes to the consumer market competing head on with
its own Pavilion brand, which targets homes. The Brio has been the single reason
for the plus 100% growth in HP PC numbers, more than doubling its 1999-2000
numbers to 63,000 from the earlier 25,000. In the home market, it’s trying to
replicate its international success with the Pavilion range. However, with
Compaq betting on the home segment,and with IBM getting aggressive in the
corporate segment, it will be interesting to see where HP places its bet.

Chandiwala Estate
Maa Anandmai Marg
Kalkaji
New Delhi 110019
Tel: 6826000, Fax: 6826059
Web site: www.hp.com
President: Ganesh Ayyar
Revenue (1999—00): Rs 1,137.8 crore

Zenith

Zenith’s
only value proposition–”MNC value at Indian prices”–was taken over
by HP a long time ago and this has reflected in the poor growth in Zenith’s PC
numbers. Compared to the 1998-99 growth of 52% in numbers and 34% in revenues,
Zenith grew a meager 3.6% in numbers and 5.7% in volume in 1999-00.

Zenith projected its PCs as a branded product at shades above the assembled
PC prices for the home; while it pushed its value proposition of “MNC value
at Indian prices” for the corporate. The home and corporate segments, both
key for Zenith, seem to have lost interest among buyers. This is partly due to
an aggressive strategy by HP and Compaq on the home and the low-priced MNC PC.
But a bigger problem for Zenith has been the lone brand for every user.

Zenith House
29, MIDC Central Road
Andheri (East)
Mumbai 400093
Tel: 8377300, 8366030
Fax: 8377297
Web site: www.zenith-india.com
Chairman and managing director: Raj Saraf
Revenue (1999—00): Rs 250.2 crore

Wipro

Known
more for its software division and Asim Premji, Wipro has been in the top league
for a number of years. Of course, it’s no longer an equal to HCL. More
importantly, with the phenomenal success in the software business, the question
that keeps popping up is whether Wipro can regain its earlier glory or continue
to be an important player in the PC market. In 1999-2000 Wipro did reasonably
well with sales doubling to 49,000 units from 23,800 in 1998-99 as average
realization crossed the Rs 40, 000 mark to be in the top 5 league. Wipro has
been focusing on the corporate segment more than the home segment. However in
the last one year, the company is focusing its various brands on the home
segment.

Doddakennelli, Sarjapur Road
Bangalore 560035
Tel: 8440011, Fax: 8440056
Web site: www.wipro.com
Chairman: Azim H Premji
Revenue (1999—00): Rs 2,035.7 crore

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