Cyrix wants to create sub Rs 25,000 PC market

The erstwhile Cyrix, which had disappeared from India sometime ago, has made its re-entry into the Indian market after it was bought over by Taiwan-based VIA Technologies Inc, supplier of PC core logic chipsets. Karma Distribution (S) Pte Ltd, a Singapore-based company, will take care of the product’s distribution in India.

VIA has introduced its new generation of 650 MHz and 667 MHz version of Cyrix III processors. These processors are targeted at the educational and Internet value PC segment.

With the re-launch of Cyrix, Karma is expecting to push volumes of 35,000 processors per month. Neeraj Chauhan, Manager (Business Development), Karma, disclosed that at present, Cyrix is looking at creating a new price point–sub Rs 25,000 PC. And in the process, hopes to capture 50 percent of this new PC market. “In India, PCs are not available at this range and we hope to create the market for this segment. Talks are on with the leading OEMs to make this a reality.”

After the re-launch, Karma claims to be doing sales of 15 to 20,000 units of processors per month. Cyrix III, the main stream product, is targeted at the entry-level segment. Chauhan said that the new processors are aimed at the value PC segment in the Indian market, which comprises of the educational institutions and home users, who are not the high end users of the PC. “Moreover, there is also a price difference of $ 20 to $ 30 between Cyrix and other processors.”

The positional strategy for Cyrix is very clear. According to Chauhan, it is meant for the value PC segment where the person needs to have the machine to achieve basic functionality and simple application and not some high end designs and games. “We hope that people who were normally using Intel Celeron or AMD K-6 would pitch in for Cyrix now. We want to deliver the value proposition in the total solution. Our total solution costs much less than that of our competition.”

In India, Karma operates under the name of eSys Distribution Ltd. It has four products in its portfolio–motherboards, Seagate hard drives, Cyrix CPUs, and Hyundai memory. In the memory market, Karma services exclusively to Vintron, HCL, Zenith and Wipro.

Talking about Karma’s channel strategy, Chauhan emphasized that Karma’s strategy for channels is well defined. It is working with national level players and also some regional level players in each of the region. “In each product line we hope to have eight to 12 channel partners. Karma’s strong channel relationships and countrywide logistics network comprising branch offices in India including channel reach in over 50 cities, the company would be able to expand the market share for Cyrix processors by providing Indian resellers and system integrators with the highest levels of support and service.”

> Cyrix, a new product in Karma’s portfolio, has changed hands many times. Started as Cyrix Corp, it came under National Semiconductor Corp after which it was taken over by VIA. On its part, VIA entered the processor business in the second half of 1999 with the purchase of the Cyrix and Centaur CPU design subsidiaries from National and IDT, respectively.

Talking about why Cyrix disappeared from the Indian market, Chauhan said that National, a semiconductor company, did not have the mass market reach. “It didn’t have much experience in selling to the consumer. The company couldn’t focus on the marketing of CPUs and shied away from competing with Intel.”

A major brand building exercise for Cyrix III is on the cards. VIA and Karma have held a series of roadshows in major cities including Chennai, Bangalore, Mumbai and New Delhi. There are plans to hold further events in the country. “Brand building exercise is part of what’s been happening outside India also. We have a huge marketing budget. We’ll be focusing on the target market segment with the offering of bundled software. There should be greater visibility at the shop counters also,” Chauhan disclosed.

However, it seems that the market is not really excited with the entry of Cyrix in the market. Ajay Kapure, India Representative of AMD, said that he does not see Cyrix as a competition at all. “There is only one competitor and that is Intel and nothing else.”

GIDs too are not really receptive to Cyrix. GS Kohli, Head (Marketing), OA Compserve, said that he would not like to sell the product for which market pull has to be created before selling it. “It’s been long since we have seen Cyrix into the market. There is no reason for me selling some other brand because Intel’s recall factor is very-very high.”

Keshav Madhav, Director, Vidur & Co Pvt Ltd, is also quite apprehensive about the entry of Cyrix in the Indian market. “Even though Cyrix is cheaper, it won’t be able to make a dent in the market. When AMD is struggling to find its feet, there is a very little chance for Cyrix to survive,” he said.

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