Feature

The second PC

As the price barrier of entering the world of notebook computing is shattered and models are available for as little as sub 30K, a market has emerged where the notebook is the second PC. By Mohd Shariff PA

As we wrote this story, we saw school kids walking with notebook PCs and this is likely to become a common sight in urban environs. Gone are the days when only entrepreneurs or corporate big shots used to tote notebooks around. Notebook computers are becoming popular across verticals and people. They seem to be popping up everywhere: on TV shows, on airplanes, in movies, or on your friend’s lap. Lower prices and wireless capabilities have played a significant part in making notebook the second PC.

These sleek machines are invading our daily lives, and the invasion is well underway. It’s not a fad. Notebook computers offer a practical solution to computing requirements and needs. Each vendor has different testimonials to support that statement. Each is looking at the market carefully and coming up with a different take. S. Rajendran, general manager, Sales and Marketing, Acer India says, “The steadily growing mobile lifestyle along with the role played by vendors like Acer in opening up the notebook PC market by making the category more affordable have contributed to the popularity of these devices. The entry price barrier for notebook PCs has dropped from Rs 60,000 in 2004 to sub Rs 28,000. This has played a major role in making notebooks PCs a popular option as a second PC.”

A second PC

Consumers and businesses are looking at notebooks as a second PC. There are multiple reasons for this. There have been some major improvements in performance levels resulting in increasing productivity matching the desktop performance. Rajiev Grover, Country Category Manager–Consumer Portables & Desktops, HP India says, “At the corporate level, notebooks are seen as productivity tools and not just for executives. Segments showing great growth potential are consumer, corporate, SMB and education. The notebook is also being seen as an alternative to a second PC where users of all sections are more comfortable with the technology and willing to move to the next level of technology at an affordable rate.”

We see the trend is true to all extents and several first time buyers are directly going in for a notebook PC rather than buying a regular desktop. Ashutosh Vaidya, vice president, Wipro Personal Computing Division, Wipro Infotech, says, “This trend could be due to several advantages- as it reduces infrastructure requirement and gives much mobility increasing productivity. Productivity alone can be attributed to the growth of notebooks among the youth.” The benefits of a small, light and portable computer at an attractive price point is wooing more customers, who are looking at notebook computers as their first choice.

Anil Joseph Philip, director-Transaction Business Unit, Lenovo India says, “Probably the most important reason people are considering buying a notebook is that they want a computing device that’s portable and lightweight. One that they can take anywhere—to the class, to meetings, on business trips or just roam from one room to another. Moreover the freedom of movement, taking your office or vital data along on your business or personal trips is the main selling point of a notebook computer. The portability factor is one that we should seriously consider.”

The increased affordability of notebooks and availability of mobile Internet connectivity have driven consumers and businesses towards notebooks. George Paul, EVP, Marketing, HCL Infosystems claims, “HCL’s entry-level notebooks are available from approximately anywhere between Rs. 27,000 to 30,000, which is close to the price customers pay for a desktop PC. Also the performance that today’s notebooks offer is similar to desktops, while the advantage of mobility and anywhere computing make notebooks an attractive proposition for consumers and businesses.” He continues that there are businesses that have adopted a notebook-only policy. Low-cost, entry-level notebooks and multimedia notebooks are the two categories that have seen strongest growth for HCL in the Indian market.

In the past the notebook was not the first choice when compared to a desktop that was considered much more powerful. But things have changed. Although still not on par with the desktop, thanks to the next generation notebook chipset, Intel’s New Sonoma Platform, many notebooks come close to providing the performance level of a desktop PC. Many notebooks, especially the desktop replacements, already have impressive technical specs that would shame most ordinary desktops. Some of these desktop replacements even use desktop processors or CPUs. With hard drives up to 100 GB or more at (7,200 rpm), with memory up to 2 GB in some cases, and supported with Intel Core to

Duo or Pentium 4s, at 3.4 GHz or more - most notebooks are very capable of handling almost all computing applications and functions with ease.

Technology in the driver’s seat

In today’s age of the savvy customers, features such as multi-core processing, DVD Writers, in built Web cameras, lightweight batteries that last longer are all important criteria for buying notebooks. Superior Wireless LAN performance that supports 802.11a/b/g enables users to conduct business while travelling. With people constantly on the move, lightweight 14.1” Wide screen notebooks are becoming more attractive along with their promise of extended battery life.

Processors that promise to increase performance and while saving on power and extend battery life along with new technologies like biometric fingerprint technology, antitheft and auto-recovery features have all contributed to the blossoming of the notebook mart. S. Rajendran of Acer asserts, “Consumers are also increasingly motivated by additional value-added features like Acer’s e-technology features which make it easy for consumers to utilise various features at the touch of a button.”

HP’s Compaq Pavilion addresses the need for entertainment on part of modern youth. Grover of HP says, “As long as you update the technology in your notebooks you will survive in the market. HP sees tremendous growth in notebook market as it has 40 percent of the market.” Today’s notebooks are lightweight and come with battery life running into several hours, while also offering the same performance as by desktop PCs. They also feature advanced multi-media features like wide screen and offline media playback that are much in demand among consumers.

Paul claims “The HCL Non-Stop Series has seen huge acceptance among enterprise and SMB users. We have also seen strong demand from enterprises for notebooks featuring biometrics technology (for example, fingerprint identification) for advanced system security.” The key market drivers are cutting-edge technology based notebooks, strong and reliable service and excellent total value from ownership. Vendors such as HP, Dell, HCL, Lenovo, Acer and the like continue to offer the Indian customer the latest in terms of new products, technology and services.

Rajan Anandan, vice president and general manager, Dell India says, “There are three different lines of notebooks that Dell offers in India as in the rest of the world. We just announced the introduction of our brand new products in our Latitude range, which offers a powerful combination of benefits and is already finding rapid acceptance. Our Inspiron line, which is targeted at customers who require high-performance computer systems at a great price, is doing very well.” Dell’s typical customers are individuals or small-to-medium sized businesses that require optimum performance for their investment. And XPS, a sub-brand within Dell, targets the buyer who wants everything. The XPS M1210 notebook incorporates the very latest and superior technology for mobile entertainment.

Wireless technology is another reason for the rapid growth of notebook usage. Although Wi-Fi usage is generally restricted to the metros; broadband is steadily reaching out to more locations in India, with service providers competing against each other for market share it should not take long for the Internet to reach most locations in India. Philip of Lenovo believes, “The popularity of Wi-Fi is an asset to notebook vendors since it makes the case of mobile computing even stronger in the minds of the consumer.” New technologies such as the integrated Web camera have enhanced a notebook’s adaptability further as it allows the customer to do video conferencing from their desks.

Other new technologies like Acer GraviSense and Acer Anti-Theft technologies make the devices safer to carry around and use during travel.

Rapid growth

According to Grover the notebook mart is expected to grow faster this year. He believes that HP will sustain its present market share of 40 percent and that HP’s Compaq Presario will lead the market. In the same way Lenovo too has targeted the youth and adopted technology that will entertain them. Lenovo’s Y-series is aimed at the SMB segment and ThinkPad at enterprises. It is estimated that over 42 million notebooks will be produced worldwide this year. And that number is said to be growing by 20 percent each year.

Rajan says, “The Indian notebook market will continue to grow exponentially. The explosive growth of notebooks has been due to a combination of affordability, increasing demand for mobile computing, and significant improvement in availability and reliability as well as bandwidth of wireless technologies.” As price competitiveness of notebook vis-à-vis desktops has improved, adoption rates have gone up across segments. There has been widespread growth across the enterprise, corporate and home product segments. While notebooks are on a tremendous growth trajectory, growth in desktops could have been much better.

As a strategy Acer plans to position itself in the mind of the consumer as a Young, Vibrant and Contemporary brand. Rajendran asserts “Our entire strategy revolves around having the latest products with the ‘freshest’ technology on the shelves first.” To achieve this objectives the company have built up their entire go-to-market approach on a 100 percent indirect model which focuses on leveraging the competencies of the channel to address our key focus segments of Home, Soho (Via Retail), SMB, SMEs, Corps/ Govt/ Educational (specialised partners).

In sync with other technology drivers of this industry such as Microsoft and Intel which have released products for the commercial and consumer segments, Acer too has come out with separate lines of offerings for commercial and consumer notebooks. The TravelMate notebook is for the business segment and the Aspire series for consumers.

On the enterprise front, Lenovo has the ThinkPad brand and it took the lead in this segment last year. According to IDC high-end technology enabled notebooks are being routed to small and medium businesses. That’s how the growth is at a peak and they predict that this year also the same trend is expected. Just to give an indicative figure, the consumer market of notebook is growing at more than 300 percent, while commercial segment is growing at 60 percent approximately.

Rajan says, “Even though the prices of notebooks are coming closer to those of desktops, there is still much to be done on the pricing front. India’s PC penetration is much lower than that of other emerging countries, for instance, Brazil, China and Russia, which are significantly higher. The duty regime prevalent in India adds, on average, 20 percent to the cost of a PC.” Vendors believe significantly higher and faster adoption of PCs will be facilitated by lower prices in a reduced or zero tariff regimes. That will also open up opportunities for PC manufacturing units in India to become part of global IT supply chains and result in significant economic activity for the country. India’s hardware industry can also become as well recognised and respected across the world as its counterparts in the Software and ITES industries.

Celebrity endorsements

Endorsements by celebrities have been used to boost the notebook market. We have seen Saif Ali Khan as brand ambassador for Lenovo, Hrithik Roshan for Acer, Shah Rukh Khan (SRK) for Compaq Presario and the like. Most vendors acknowledge that these celebrity endorsements have played a vital role in wooing the market and pushing the notebook PCs unit shipments. Grover says, “We have been undergoing a huge twist on the social front, and it is necessary to have influential face to address this changed social ecology and HP believes that this is creating a huge market for the Compaq Pavilion brand.” He adds, “The sum of money being invested in engaging SRK has already paid off. These brand ambassadors have a huge influence in influencing the buying decision to favour a particular brand.”

Rajendran says, “Celebrities—Hrithik Roshan, SRK and Saif Ali Khan—stand for the values that we are attempting to associate with our brand. Hence there is a direct connect. This has helped brand association with celebrities and given better mind share among the young as well as first time users. It gives a brand a major boost in terms of visibility and awareness across the country.” Today, the family members who would relate better to the above celebrities are influencing decisions at the consumer level. They do help in aiding brand recall. However in the commercial segment, the purchase decision is logical and here product and other related factors would be the key rather then a brand ambassador.

Paul says, “Using celebrities to endorse notebook PCs is a welcome trend as long as it creates excitement and helps expand the notebook market in India. Endorsements by celebrities can only have an impact on consumer segments since business and enterprise buyers are more concerned with reliability of the notebook and support and service from the vendor. At HCL we bring the brand promises of leading in life with our notebooks and assure you of prompt service across the country.”

As mobility is increasingly an essential computing usage parameter for many user segments and the performance gap between desktops and laptops narrows, users are happier about what they can get from notebooks. We are seeing many PC users switching from desktops to notebooks due to better price propositions and the inherent advantages of mobility products. People are much more willing to choose notebooks over desktops today and that makes industry extremely optimistic about the notebook business. They are already enjoying greater than triple digit growth and they expect this to continue.