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Tech Pacific (India) Ltd, the Mumbai-based Rs 1,675 crore distribution major, is
on the verge of discontinuing with Intel business in India. Although legally
the distribution arrangement is still valid, but for all practical purposes,
Tech Pac is not very active in promoting the Intel business as of now.
When contacted, K Jaishankar, CEO, Tech Pacific India, confirmed that in all
probability the agreement will be off shortly.
"We have expressed our desire to Intel to discontinue our distribution
arrangement." However, Intel officials refused to make any comment on this
issue.
According to Jaishankar, the main reason for discontinuation is the fact that
in the current scenario, it is very difficult to make any money on the
distribution of Intel CPUs. Couple with this is the fact that as far as Intel is
concerned, Tech Pac is a very small contributor to their kitty in
India--accounting for less than five percent of Intel's business.
Elaborated Jaishankar, "We are a very small player as far as Intel
business is concerned. We don't like that." At the same time, he pointed
out that there is still a very slim chance that the distribution arrangement may
yet survive. "Right now, we are in a very intensive discussion with Intel
as to how we can make the business more attractive. Depending upon the outcome
of the discussion, we will either discontinue or reorganize the whole
business." The final decision is expected to be taken within the next one
week.
|
Intel |
||
| Desktop processor sales (units) by type of customer |
2000-01 | 2001-02 |
| MNC OEMs (IBM, Compaq, HP, Dell, etc) |
380,432 | 327,195 |
| Indian OEMs (HCL, Wipro, etc) |
216,199 | 206,691 |
| Distributors (Redington, Ingram, SES, Tech Pac, Nebula) |
1,020,369 | 1,097,914 |
| Large Importers (Champion, Advantage, etc) |
75,000 | 75,000 |
| TOTAL DESKTOP PROCESSORS (excluding upgrades) |
1,692,000 | 1,706,800 |
| PROCESSORS SOLD FOR PC UPGRADES |
94,013 | 100,404 |
| PROCESSORS SOLD FOR PC SERVERS & WORKSTATIONS |
47,000 | 39,000 |
| PROCESSORS SOLD FOR MOBILE SYSTEMS |
42,000 | 32,000 |
| Revenues (Rs crore) |
||
| Total revenues for all Intel processors in India |
930 | 1,085 |
| Other Intel products (Networking, motherboards, etc) |
81 | 107 |
| Grand total for Intel business in India |
1,011 | 1,193 |
|
Source: Dataquest estimates |
||
Meanwhile, Tech Pac is also in talks with AMD to take up the distribution of
its CPUs. Confirmed Jaishankar, "AMD has approached us and we are talking
to them. They have given us a very attractive proposal and we are actively
considering it."
However, he declined to elaborate on the proposal.
According to sources, AMD will not appoint Tech Pacific India as the
distributor. Rather, it will appoint Tech Pacific Singapore as the distributor,
which in turn will appoint Tech Pacific India as a sub-distributor. When
contacted, Sanjeev Keskar, Country Manager (India), AMD, refused to make any
comment on this issue.
Currently, Intel has five distributors in India--Ingram Micro, Nebula,
Redington, SES Technologies and Tech Pacific. These five contribute as much as
60 percent of Intel's business in India. According to Dataquest estimates, Intel
clocked in revenues amounting to Rs 1,193 crore in fiscal 2001-02. Out of this,
around Rs 1,100 crore came from CPUs only.
Asim Raina
(CNS)