Trend

A PC in every home

Sub-10,000 PCs, the latest entrants in the Indian PC market, are poised to extend the reach of computers among the people, says Vinutha V.

In India, where the PC penetration is only 14 per 1,000 (Source: Union Communications and IT Ministry), it is critical to examine entry-level prices of computers. China, Thailand, Indonesia and Malaysia have shown the way in this regard. As part of a concerted effort to bridge the digital divide, the Malaysian government has been trying to increase the number of PC owners from the current 5.5 million to 12 million. Similar bridging of the divide can be seen in India as the prices of PCs have been consistently coming down over the last several years. The downward movement of PC prices is positively correlated with the increase in PC sales outside urban areas. The Government of India (GOI) is keen on increasing PC penetration in the country. As per the target set by it in ‘The IT Vision for India 2008’, the goal for PC penetration is 65 per 1,000 people.

To get there, the Union Communications and Information Technology Ministry is encouraging PC manufacturers to come up with sub-10K PCs.

The cost hindrance

The affordability factor is a major hindrance for computer buyers in India. We felt that there is huge potential in the first-time buyer segment Tathagata Dutta Co-Founder & MD Xenitis Group

PC vendors too have realised that sub-10K PCs can create a new segment for them. Manufacturers such as Xenitis and HCL Infosystems are the early players in this space. This April, Xenitis launched its sub-10K range with a price of Rs 9,790 (excluding 4 percent VAT and installation charges) followed by HCL Infosystems in August which launched a model priced at Rs 9,990 (excluding VAT and installation charges). One of the key factors driving PC vendors to look at sub-10K PCs is affordability. Of the varied segments in the salary bracket, there are millions falling in the Rs 10,000 to Rs 15,000 bracket. Says Tathagata Dutta, Co-Founder and Managing Director of the Xenitis Group, “The affordability factor is a major hindrance for computer buyers in India. We also felt that there is huge potential in the first-time buyer segment. Hence, we decided that the sub-10K PCs would open this gateway.” From surveys and studies, PC manufacturers have also realised that large number of families aspire to own PCs. Says George Paul, Executive VP-Marketing, HCL Infosystems, “Increasingly, people are looking at improving their lifestyle. They see computers as a learning device for their children. When we increase affordability and ease of use of PCs, people come forward to buy PCs, thereby increasing the PC penetration.” Another deterrent for buyers in the B and C class towns is the absence of local language computing. In India, PCs give access to people, who are well versed in English. Industry experts say pushing local language computing along with offering low cost boxes will drive the PC market.

Breaching the 10K barrier

There is, however, no compromise on quality. In the past, low-cost PCs tended to be either stripped down versions or poor quality hardware. So how is it that vendors are able to offer sub-10K PCs without compromising on quality? “We cannot afford to compromise on quality. Our association with OEMs is 30 years old and we made them realise the potential of the sub-10K market. We sourced components at a lower price,” adds Paul. Since PCs in this range are targeted at first time users, it was learnt that there were no need for certain high-end, graphics-intensive applications. Says Dutta, “Sub-10K PCs are primarily meant for households running basic applications and hence, we needed to focus on making them user-friendly rather than providing the capability to run high-end applications. This helped us to bring down their prices as compared to rates for standard PCs.”

The difference between a standard PC and a sub-10K one lies in the processor used. The sub-10K PCs sport a 1 GHz CPU with 128 MB RAM, 40 GB hard disk, 15-inch digital colour monitor and Linux operating system. These PCs support bilingual languages (English and a local language).

Pushed by GoI

The sub-10K PC segment is being bolstered by the union IT ministry. According to Union Communications and IT Minister, Dayanidhi Maran, the ideal way to reach the PC penetration target is through low-cost PCs or sub-Rs 10,000 ones. He seems happy about PC manufacturers’ initiative to come up with low-cost PCs. “Things are hotting up and sub-10K PCs is necessary to increase PC penetration. Additionally, these PCs will be extensively used in e-governance projects too.” He further adds, “Even for the first-time buyers, the financial packages will be an advantage. Certain public sector and private banks such as SBI and ICICI Bank will soon offer finance schemes for low-cost PCs.”

PC manufacturers have tied up with banks to offer sub-10K PCs through financial packages. HCL Infosystems has partnered with Union Bank to offer low EMI packages (in India). At just Rs 499, the HCL Ezeebee range includes its sub-10K range to further push its initiative, ‘PC in every home’.

Apart from affordability, usability requires equal attention. However, analysts from IDC feel that the PC market is not dictated by price alone. The PC penetration at household level is dictated by 3As—availability, applicability and affordability. By offering a sub-10K PC, vendors besides addressing the affordability issue, need to look at it more from the applicability angle as well. To market computers to the masses, breaking the computing language barrier is a must. In the medium and long-term, multiple (Indian) language software and content is essential, so that penetration extends beyond the limited English-savvy population. It is important that computer applications address the needs of this large segment of population, without forcing them to learn a new language. The importance of local

language computing is apparent form the Chinese example where the Internet and computer penetration has had a tremendous impact due to the availability of local language content and software.

Current users of PCs are drawn from the 5 percent of the population, which is familiar with English. However if PCs can be used by 50 percent of the population, then its sales will grow dramatically over the next few years. If computer applications were available in bilingual or multilingual form, one of the barriers can be removed. With VAT being implemented all across the country, many more people, even in semi-urban and rural areas will feel the need for computers. Software in the local language—accounting software, word processors, etc—will actually drive hardware sales in these areas.

On the ground

HCL Infosystems today has over 3,000 channel partners. This force addresses the issue of physical presence in a majority of cities especially in rural India where toll free numbers and customer service are not viable, and face-to-face interaction works best. Xenitis with over 1,200 dealers and 140 distributors is aiming to take its sub-10K PCs to all the corners of the country and wants to educate the masses through road shows.

Erratic and fluctuating power is a major issue and a deterrent to PC usage. HCL developed RP2, a power solution for its sub 10K-PCs. Unlike a UPS which offers power backup of 30-40 minutes this car battery gives a backup of 5-6 hours. HCL is not stopping at that. There is an experimental project underway, which can charge a car battery using bicycle pedal power in places where there is zero electrical supply and reliability. This is an apt solution in a rural scenario and is also commercially viable since people use cycles for transportation.

By spreading awareness on the importance of PCs at every house, the efforts by GoI and initiatives by the PC manufacturers, the new sub-10K PC segment is expected to grow at a faster rate. Xenitis has sold 20,000 units since its launch and HCL’s sale of 1,000 units in the first week of its sub-10K PC launch are testimony to the demand for these machines.

vinutha@expresscomputeronline.com