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Admit
it. You’re probably reading this article because you
have a secret desire to own a notebook computer. The price
for a decent MNC-branded model (Rs 1 lakh and above) positions
these computers at the high-end corporate segment. But take
heart, for there have been attempts to introduce notebooks
costing around Rs 50,000. With new technologies (and some
innovative concepts discussed below), the price of notebooks
can come down to a level that everyone can afford.
 I’ve
often wondered what makes notebooks so desirable. Are they
corporate power symbols or just devices that some have come
to be so dependent on? I’ve envied CEOs and other high-flying
executives toting around notebooks, packed in svelte leather
cases. At the ICT India 2002 exhibition in Mumbai, I saw students
drooling over Apple’s sleek Titanium notebook, and fingering
the trackpad on an AMD-powered Compaq model. I can also recall
an incident that occurred a few years ago. A leading computer
manufacturer conducted a ‘seconds’ sale at Nariman
Point, Mumbai’s business precinct. Notebook computers
vanished faster than hot cakes, notwithstanding the fact that
these were long obsolete models. Notebooks have always been
premium-priced products for executives in the upper ranks,
though there have been some attempts at introducing affordable
models. An OEM introduced a Rs 50,000 notebook two years ago
and other manufacturers attempted to offer low-priced models.
Acer for example offers an entry-level model for Rs 59,990
and Big Apple sells a model for Rs 49,995. Today, most entry-level
MNC models still cost above Rs 85,000.
But why are notebooks so expensive?
Essentially, the technology platform for notebooks is vastly
different from desktops. I spoke to S Rajendran, who is Acer
India’s general manager for marketing, and he explained
that the challenge comes from packing a multitude of no-compromise
features in a small and compact form factor. The attendant
thermal challenges call for more robust components, better
air convection and flow designs. Thus even the Intel CPUs
used for notebooks are different from those of their desktop
cousins, he explained.
Another factor that keeps the price high is the LCD screen
technology. LCD panels are expensive to manufacture, because
of high wastage. If a section of the display panel is damaged
during manufacturing, the whole panel is rejected. However,
there have been improvements on the manufacturing front, and
production costs are coming down.
High duties
The other issue is customs duty. Since notebooks have until
recently been imported in assembled form, the finished product
has attracted Basic Customs Duty of 15 percent, a Countervailing
duty (CVD) of 16 percent and four percent special additional
duty (SAD). But these are all multipliers, and Rajendran says
that the calculation is not just a simple addition of these.
Taking into account other factors, the total duty is around
38.736 percent.
So is the duty likely to be reduced? There have been reports
in the media of zero percent duty on hardware products by
2003, but these are largely speculative.
I asked the director of MAIT, Vinnie Mehta, to clarify this.
Here’s what he had to say: “According to the IT
Agreement of the WTO, a specified list of 217 IT and Electronics
components and finished goods would attract NIL customs duty
by 2005. However, the Government of India has brought forward
the implications of the Agreement from 2005 to 2003. The IT
and Electronics manufacturing industry now faces a challenge,
that while their output goods will become zero duty, their
input raw materials, components and capital equipment, (that
are not covered under the purview of the IT Agreement), will
not be at zero duty. This will lead to an inverted tariff
structure and makes manufacturing unviable. The industry has
requested the government to sort this out. Should this anomaly
not be addressed, the industry will face immense pressure
even though the government may consider shifting the implementation
back to 2005.”
Meanwhile vendors like IBM, Compaq, and Zenith have set up
manufacturing facilities for notebooks in the country. Wipro
has just announced its plans for manufacturing notebooks.
For now, notebook computers continue to be high-end products
but there are more affordable alternatives that can be used
for the same purpose.
Alternatives
Some years ago a company called Ergo Computing introduced
a 386 PC called the ‘Brick’ (because it had dimensions
similar to a brick). Users could lug it around in an office
bag, leaving a set of monitors and keyboards at home and in
the office. In essence, it allowed one to take the office
computer home and complete work over the weekend.
IBM is now introducing something similar. Its Meta Pad can
be a notebook computer, a desktop or a handheld depending
on what you connect to it. The 9-ounce (270 grams) Meta Pad,
which has the dimensions of a wallet, packs in a processor,
hard disk, memory and docking connector. IBM Research says
the Meta Pad serves as the core computer and everything else
is regarded as an accessory. Over the years, IBM Research
designed several innovative mobile computers, most notably
the Wearable ThinkPad and Wristwatch computer.
Local OEMs could introduce something similar. Assuming the
user has a monitor and keyboard in the office and at home,
the kit could include a basic core module (like Meta Pad)
and two docking stations (one for each site). Why docking
stations? Well you know how cumbersome it can be to plug and
unplug monitor and keyboard leads into a system unit. Doing
that repeatedly could ruin the delicate pins on the plugs.
The monitor and keyboard could be plugged in permanently to
the docking station, and the core unit could slide in/out
whenever you need to get mobile.
There are other alternatives, like the Simputer for example.
But handheld devices aren’t practical for routine work
because of their small screen and absence of built-in keyboards.
Of course you could attach a third-party keyboard, but that
adds to the cost of the whole package.
Scope
There’s a moderate market for affordable notebook computers
in Asia, so manufactures must find alternatives to expensive
components, and figure out ways to reduce production costs.
Everyone’s now awaiting the post-budget announcement
on customs duty for IT hardware. Local manufacturing will
pick up once duty on components is reduced. Also, more players
will get into manufacturing. Hopefully by next year, we should
see more models priced around Rs 50,000. And then you could
have your PC and notebook too.
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