VIA lines up strategy to provide PCs at Rs 15,000

VIA Technologies has lined up an aggressive strategy
that is expected to take the PC market by storm. A price sensitive Indian
market, PC vendors had been striving to make it to the magic pricing point of Rs
15,000 for a very long time. Now VIA has come up with a proposition to provide
multimedia branded PCs at Rs 15,000 which PC vendors just can't refuse.

VIA's strategy would be to leverage on its ability to
source components from the right sources at the right prices. While it would not
play a direct role in sourcing products, "Our role would more be in terms
of coordinating the exercise and showing PC vendors that good PCs could be made
available at affordable prices. Being a technology company we have the
competency to effect dramatic changes in product performance by a little
tweaking," revealed Ravi Pradhan, Country Manager (India), VIA
Technologies.

VIA expects to hit the market with its low-cost branded
PCs by September. In the process, the company expects to increase its
marketshare dramatically as more and more low-priced PCs make it to the Indian
homes. The target audience would be home and the small offices. As of now,
Pradhan is clear that VIA does not want to target the corporate sector.
"The idea is to position the PC with white good products and persuade
families buying the second TV to buy a PC instead."

His strategy is based on the argument that high-speed
processors as advocated by the Intels and the AMDs are really not necessary to
the ordinary home users. Home users still do not use graphic intensive
applications and the usage is most often restricted to e-mails, surfing and
office application with a little bit of multimedia games and educational matter
thrown in. Nonetheless, it does not warrant the need for high-speed processors
like 1 GHz and more which is where the big guys are pushing.

For an ordinary user, "We plan to offer multimedia
PC with 733 MHZ processors, 128-256 RAM and 20 GB hard disk. No user requires
more power than that to run his day-to-day applications," argued Pradhan.

VIA's move is bound to send ripples in the market since
it is an argument which the big players are not going to take lying down. For
long, skeptics and analysts have wondered whether the high-speed processors
launched by Intel and AMD are at all necessary for ordinary users with the only
merit in faster processors being to help bring down processor prices.

Currently, VIA is in the process of talking to all the
leading Indian PC vendors about its proposition and a formal agreement is
expected to be signed soon. By September, Pradhan expects two-three Indian
brands to hit the market with its low-priced PCs. The company is talking to both
national as well as regional PC players to begin with. The focus, however, is
emphatically on OEMs only because "OEMs would bring in the legitimacy which
an assembler may not. Once the OEM is convinced a lot of segments get taken care
of."

Unlike OEMs, it would not be feasible to reach out to
the hundreds of assemblers across the country. But once the OEM experiment is
successful, assemblers would toe the line since they are playing in the
extremely price-sensitive domain. Even the corporates would be the next phase of
expansion by OEMs once the home and small office segment is captured.

The only flaw in VIA's seemingly perfect game plan is
that it has kept its stakes too high. Pradhan estimates that in a year's time,
it would be able to sell one million PCs. "Even if we fall short by 50
percent, five lakh is a good achievement."

To that extent, Pradhan has lined up aggressive
market-building exercises with a target of 100 roadshows in B and C class cities
in September. It will also launch a media campaign through regional media in
local languages.

Taiwan-based VIA does a lot of OEM work for Intel. It is
a totally fabless company outsourcing most of its manufacturing and
concentrating only on designing the software for its product line. Its portfolio
of products includes, chipsets, processors, motherboards, audio and video cards,
and CDMA chips.

In India, VIA's products are distributed by Esys,
Jupiter and Priya with its channel base close to 400. Currently, its products in
the Indian market include only the chipsets, processors and the motherboards.
The rest would be launched by next year. By September, VIA also plans to hire
more marketing people.

(CNS)