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Monday, September 23, 2002

PC prices sink, sales buoy
Manoj Kumar

Illustrations by Sandeep JoshiWITH the slashing of computer and processor rates by market leaders, like Intel, Compaq and IBM over the past few days, the sale of PCs has picked up in the region. Sources in the market say the sale of personal computers (PCs) is better as compared to the previous year. The cut in price of PCs and processors by the brand leaders have further boosted the sale of assembled PCs, along with the branded ones.

Atul Jaiswal, branch manager, Redington (India) Limited, says, "We have witnessed an increase in the sales of PCs by 15 to 20 per cent till the end of the last month in the current fiscal as compared to the corresponding period during the previous year. With the slash of PC and processor rates by 25 to 40 per cent, Intel, the processor giant, has initiated a price war. The impact is quite visible in the sales during the past few days. Compaq and Intel have also slashed the prices of their products."

He admits that like other places in the country, Punjab and Chandigarh are also dominated by assemblers and small local brands. He says, "Nearly six months ago, with the bridging of price difference between branded and locally manufactured computers, the market had slightly shifted towards the branded ones. However, with better management and cost-cutting measures, the local brands have bounced back. Now their share is hovering around 75 to 80 per cent in the regional market, as compared to 69 per cent at national level.

Insiders admit that due to financial crunch and saturation, the demand in the government departments and large-scale sector has dipped over the past few months. The sales are now driven by the small and medium scale sector, along with household and educational institutions. Jaiswal feels sales in Jalandhar, Ludhiana and Amritsar and other major towns in Punjab are on the rise and the dealers are now penetrating into smaller towns and border areas.

However, Naveen Beri, partner, Atlantic Computers, Chandigarh, says, "Intelís initiative would have limited impact on the market as the company has slashed rates in the higher-end segment of P4 computers with 2.53 GHz and 3 GHz that have few takers." The company has slashed the price of 2.53 GHz, computers from about Rs 29,000 to Rs 19,000 and of 3 GHz computers from 60 to 70,000 bracket to nearly Rs 35,000. However, the rate of PCs in the lower segment has been slashed by Rs 4,000 to Rs 8,000, he adds.

He claims the total sale of PCs in Chandigarh and Punjab is 6,000 per month, which should increase by 10 to 15 per cent during the remaining period of the year. Interestingly, the sale of branded computers has increased in the city as compared to Punjab, says Atul Jaiswal. Samsung, Compaq and IBM are the leading brands, but the assemblers are trying to keep up their share by improving their after-sales service and cut-in profit margins.

Beri laments that despite increase in the sales of PCs, profit margins have drastically declined over the past one year. Earlier, the dealers were making a profit of Rs 2,000 to Rs 3,500 on the sale of each computer. Now they are ready to sell for a meagre profit margin of Rs 400 to Rs 500. It has happened due to the increase in competition between branded and assembled computer manufacturers and among assemblers themselves.