PC assemblers retain stronghold

The Indian PC market has grown by close to 29 percent last year. This is
according to a recently announced report by a well-known market research agency.
Earlier, another resea-rch agency had put the figure couple of percentage points
higher.

However, the most interes-ting part is that both of them have been silent
about the assembler segment. None of them have mentioned assemblers even in
passing terms. And just two years back, these very assemblers used to command
close to two-thirds of the Indian PC market.

One of the above two-market researchers, not very long back, had said that
attractive prices from the assemblers would be the leading demand driver for the
Indian PC market. Along with that strong economic growth was also expected to
drive the PC market.

Till sometime back, analysts reckoned that branded players were fighting
amongst themselves for market share, rather than aggressively targeting the
assemblers. Although a couple of vendors had tried lowering price-points, but by
enhancing the quality of service and extending this right up to the small
accounts would fetch them far better results than what they have been able to
achieve. But now, analysts believe that assemblers are on their way out.

Price and personalized service was perceived to be the strength of the
assemblers. As a result, SOHO users preferred to go to these vendors rather than
the branded players. Analysts added that in the days to come, it would be
increasingly difficult for branded PC players to compete with the assemblers
unless they augment their service capabilities coupled with attractive price
points.

On both the above points, branded PC vendors have done lots of work. Now,
their service infrastructure is available right into the B and C class towns and
entry-level prices are touching the Rs 12,000 mark with one player going below
the 10k price point.

But has it made any dent into the assembler segment? Not really. With the
unified VAT regime in place and price gap narrowing, they may have been bruised
but certainly not dented. They are still doing well and will continue to do so
in the near future. This is because, they will always have price superiority
over the branded players. Secondly, the kind of personalized and 24x7 service
they can offer cannot be matched.

Overall, the Indian PC market is expected to grow at a similar percentage in
2005 also. Apart from the excellent economic conditions, strong demand from the
SME segment will power the robust growth. Education segment will be another key
driver. Interestingly, local assemblers are particularly strong in these two
segments.

So, there is no way the assemblers will become redundant in the near future.
In any case, nothing can rival the vital contribution made by the assemblers to
the growth of the Indian PC market.