HCL launches sub-Rs 10,000 PC

HCL Infosystems today launched a personal computer for Rs 9,990, the second company to launch a sub-Rs 10,000 machine in India.

The company said that the sub-Rs 10,000 price was the barrier that needed to be crossed to grow the PC market in India. "I believe at this price the market will explode," said Ajai Chowdhry, chairman and CEO, HCL, following the launch of the product by Dayanidhi Maran, minister for communications and IT.

Earlier, the Xentis group had launched Aapna PC at a price a little below Rs 10,000.

The economics of HCL's new PC is linked to volume of sales that the new price point can generate.

Chowdhry said the PC had been priced at Rs 9,990 without compromising on quality by forming a loose consortium with component suppliers.

Via Tech, the Taiwanese microprocessor maker, Seagate, which makes hard disks, and TVS Electronics are some companies that helped HCL bring down the price of the PC based on the market potential at lower price points.

Chowdhry stressed on the sub-Rs 10,000 barrier in PCs because he felt that that it would help remove mental barriers in the minds of the consumers. The company felt that if sales volume of the new PC reached a critical mass, it would translate in to returns even at a sub-Rs 10,000 price.

The advent of the sub-Rs 10,000 PCs has come in the wake of a sharp growth in demand for PCs among households and in smaller towns. Simultaneously, the price of entry level PCs has dropped.

MAIT, the apex body for the hardware industry, reported that PC sales in 2004-05 stood at 3.6 million, a growth of 20 per cent over the earlier year. During the year, the price of entry level PCs dropped to about Rs 13,000 from the earlier year's entry level of Rs 20,000.

While the overall PC market grew at 20 per cent, households' purchases grew by 48 per cent to make up 28 per cent of the overall market. In smaller towns (towns outside the top 8 cities) PC purchases grew by 34 per cent and it made up 51 per cent of the market.

Chowdhry said that HCL had designed its new PC for Indian conditions, a UPS-type product can be charged using a car battery. This was meant to deal with power cuts, he added. The PC runs on Linux operating system.

Manufacturers have launched the sub-Rs 10,000 PCs in the backdrop of a study conducted jointly by the government and industry to look at ways of increasing PC penetration in India, the platform for related activities such as internet penetration.

The study, "Improving PC penetration, internet and domestic software," has explored the importance of affordable pricing in creating an inflection point in the market.

The study has said that the aim should be to increase PC penetration in India to 65 per 1,000 people by 2008 from the current level of 14 per 1,000. China currently has a PC penetration of over 50 per 1,000 people.