Feature

Peripherals to the fore

Microsoft’s better known for software, but the company’s portfolio of peripherals has long been seen as expensive, though classy. Kusum Makhija examines the giant’s plans for this segment in 2006.

According to research conducted by Microsoft with IMRB, the market for mice and keyboards in India is worth $40 million. The top three brands—Microsoft, Samsung and Logitech—all have a share of between 16 to 18 percent with a delta error margin of 3 percent.

Users are looking at three things from their PC experience. The first is to be more productive, the second is to have more fun, and the third is to stay in touch. Microsoft has therefore divided the entire scenario-based selling process and products-based selling into three key

areas: performance, comfort and entertainment. All its products this year have been fitted into these three categories. “With increasing PC penetration and the emerging digital lifestyles in India, a lot of people today are spending more time working and playing on the computer than ever before. In this context the quality of peripherals—that is, mice and keyboards—emerges as an essential ingredient for defining the overall PC experience,” explains Mohit Anand, Country Manager, Entertainment and Devices, Microsoft India.

Product offerings

What is important is reaching out to the right kind of customers with the right kind of products to meet their needs through the right channel Mohit Anand Country Manager Entertainment & Devices Microsoft India

The 2006 portfolio of Microsoft has mice and keyboards ranging from Rs 300 to Rs 6,000, and will be available through the company’s network of 6,800 resellers across 58 cities. The X-Box 360 joystick device is being launched as a PC peripheral for gaming and computing. The Comfort Curve range of keyboards has been broadened to include offerings for the value-conscious customer. In terms of performance, the products have been divided into those for desktops and those for notebooks. The performance range consists of six high definition products: five new mice and one high-definition laser desktop keyboard and mouse combo.

“The competition came out with laser-based products before we did, but then they had it in only one mode. We are making it available on four products,” says Anand. One of these is in the gaming series, letting gamers use a high-precision wireless laser standalone mouse for the desktop, a wireless laser mouse for notebook users, and a wireless laser desktop keyboard and wireless mouse combo.

The chip that sits in a Microsoft laser mouse operates at 85 million operations per second, and each of these mice has 1,000 dpi resolution. For notebook users, the company has six products priced between Rs 550 and Rs 2,500. Six months battery life is possible with a single cell.

Microsoft is leveraging on enhanced user experience for its products. The company is promoting an extended product lifecycle for all its products to attract customers. “We do not want to have a lifecycle of less than three years for any of our products,” declares Anand.

Enterprise market

Microsoft’s strategy from an enterprise perspective is to increase the penetration of its performance products. This has clearly been laid out in promotions such as the ‘New for Old’ for end-consumers across 47 cities. According to Anand, most of their corporate customers have come back, wanting upgrades on their existing Microsoft hardware products.

Another area that the company is looking at to boost its sales is corporate gifting. For instance, some large pharmaceutical companies have bought substantial quantities of the high-end range of Microsoft’s products to gift to doctors who can use them in surgery. SAP recently bought Microsoft products in bulk for their research and development wing.

With the increased penetration of branded PCs, and the assembled market coming down in both the home and enterprise segment, the demand for standalone devices such as mice and keyboards has also been hit. Many enterprises today go in for bulk buying of branded PCs with easy financing and servicing options.

Comments Anand, “The branded PC market is an opportunity. When branded players go out to market their products, they need to hit a price point to excite the customer about the product. In the process, they often work backwards and thus the quality peripherals lose out in comparison to low-end products with less features. As a result, customer needs are not fulfilled. We have increasingly seen many people buying branded PCs and laptops, and then buying additional wireless mice and keyboards with those. This is a big market for us.”

On the assembled PC side, the company informs that it is seeing a lot of traction as the numbers are growing even if the percentage share of assemblers has come down.

The company is bullish about the enterprise market and says that its hardware products are finding demand from IT and BPO companies, schools, educational institutions, financial companies, and pharmaceutical companies.

Three pillars of strategy

Its channel strategy has three pillars to it. The first is the outlet coverage programme as part of which Microsoft sales staff are reaching out to channel partners, helping them with their pre-sales, post-sales, technical readiness, partner solutions, hand-holding and relationship building. At present there are 26 cities with direct field presence from Microsoft Hardware.

The second pillar to the strategy is the Channel Pack, a full-fledged book on the company’s entire ‘Go to Market’ for its partners. Any information that the partner might need—right from different products, technical details, whom to contact, how to brand, how to do his day-to-day business better—is available in the document.

The announcement of the ‘Pan Asia HED (Home and Entertainment Division) Retail Centre Programme’ is the third pillar of the strategy. As part of the programme, the company is certifying its partners in three tiers: gold, silver and regular. This includes a set of deliverables to the partner, including certifications. “We are branding 500 stores across eight cities from a pan-Microsoft perspective, not just HED as retail centres. Channel promotions also continue, with schemes like ‘new for old’ and ‘one a day’ for upgrading customers to the new Microsoft products,” details Anand.

Moving forward

The HED of Microsoft is projected to grow by 50 percent worldwide. The company is planning to launch more products in six to eight months. Since the channel is looking to move to retail, focussing on enhanced user experience, Microsoft is also seeking to get on to the organised retail bandwagon. “It is important for us to make our presence felt in this retail evolution and get visibility for our products,” Anand states. The company is in talks with some of the large retail chains. It is also keen on increasing its partner base to 10,000 by June 2006.

Speaking about the competition Mohit says, “Our challenge is not so much the competition but getting the message across to the huge market out there.” He believes that there is room for everybody in this geographically vast and diverse market. What is important is reaching out to the right kind of customers with the right kind of products to meet their needs through the right channel.

kusum@expresscomputeronline.com