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Brands fail to make inroads into PC market

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The has held firm despite stiff competition from branded players.
 
Ever since the PC revolution, a common query in the minds of personal computer (PC) buyers in India has been: Which is better? An assembled machine or a branded one.
 
The crossed 5 million units last year. A growth of 25 per cent year-on-year in unit shipments over the previous year.
 
According to IDC, a markets analyst firm, the share of assembled desktops, also known as 'white box', shipments has declined from 41 per cent in the third quarter of calendar year (CY) 2005 to 32.7 per cent in the first quarter of CY 2007.
 
However, the dip in the numbers has to be co-related to the fact that the desktop PC market has had a flat growth for two years.
 
Diptarup Chakraborti, principle analyst, global IT research and advisory firm Gartner, says: "Though the year-on-year growth of the assembled PC has been flat, it has not lost its market share of close to 40 per cent of the over all desktop PC in India. The desktop market is anyway not moving even for the branded computers."
 
Agrees Piyush Pushkal, manager, computing products research, IDC India, 'White box' desktop PC makers have retained an edge over branded PC vendors due to their proximity to the end-customer and the personalised services, they often provide. It is precisely due to this reason that the assembled market is sustaining itself despite stiff competition and attractive offerings from branded PC players."
 
Buying the 'white box' is always cheaper than purchasing a branded PC. The price difference of a normal low-end PC will be just about 5 per cent, but in a high-end PC it can be as much as 15 per cent to 20 per cent. This is because assemblers do not have to account for the marketing and branding costs.
 
The other reason for the assembled PC market sustaining itself is the ease of upgradation, which most branded PC vendors do not readily offer. Assembled PC providers are also perceived to offer better service support. Most of the branded PCs do not give an option to mix and match components of the PC due to compatibility issue.
 
Rajesh Gupta, director sales and marketing group, Intel says, "These channels have a unique advantage of using customised solution and configuration and support system. People in tier II and III still prefer to buy PCs from the assembler."
 
Intel's strategy to rope in these dealers is a good example of the growth and the potential of this market. Intel's 'Genuine Intel Dealer' programme which caters to the white box market has a three-tier approach to sell its products.
 
The first tier consisting of traders, who simply trade the components, are in the number of 8,000-10,000. The second tier, of associates or systems integrator (SI) have grown to 3,500. Those who have moved away from being just SIs and become solution providers to small and medium enterprises number 100.
 
Gupta, however, points to a very important aspect of the assembled market, "The assembled players are extremely fast moving especially when it comes to technology change. Crucially, they bring this to the buyer without any incremental cost."
 
ASSEMBLING BENEFITS
 
  • Cheap compared to branded PCs
  • Sport cutting-edge processors
  • Can be customised
  • Assemblers give better service and replace parts faster
  • Extremely fast moving especially when it comes to technology change
  • Customer is spared the incremental cost of technology
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