As India?s rapidly growing broadband infrastructure is poised to open up the country?s rural connectpoints and work up an appetite for consuming data on the go, Intel Corp, the world?s largest chip maker, is thinking up new products and technologies apart from computer processors for one of its fastest growing markets globally. The India business grew at around 20% last year for the technology company, whose global revenues of $43.6 billion in 2010 were its best ever, and it expects to maintain that pace aided by the high consumer demand in India for computing devices. Intel enjoys close to 90% marketshare in the country?s overall PC sales of 9.89 million units in 2010, and maintains a similar lead in servers for enterprises, according to industry data.
?As the transition from voice to data happens, it sort of brings us very squarely into the space where we have our strength,? says R Sivakumar, managing director, Sales & Marketing Group, Intel South Asia. ?Anytime you have to move data around that plays very well into our strength.?
However, much of Intel?s efforts in recent years have been in trying to catch up with the tablet computers and the smartphone market where rivals such as UK-based ARM Holdings dominate globally.
Intel, whose core business of computer chips still accounts for the bulk of its global revenues, launched its Oak Trail processor this month aimed at winning marketshare in tablet computers.
Industry watchers say India?s adoption of tablet computers? a slew of new products are slated for launch globally in 2011?may likely be slow at first, aside from festive season sales, and would depend on price points. On the contrary, over 12 million smartphones are expected to be sold in 2011, about 5% of the country?s total phone sales, according to an estimate by IT research firm, Cybermedia Research.
?When we say the term mobility, we don?t necessarily limit it to mobile phones. Going forward, the idea that mobility will include a plethora of form factors, many of which will carry data is actually what will make this market exciting,? says Sivakumar. Education, entertainment and e-governance projects will continue to be among Intel?s focus areas in India. ?Education is a huge area of focus for us beyond the form factors you are familiar with today,? he says.
Similarly, it sees potential in India?s entertainment market with India reaching the digital delivery and consumption phase, and also in projects such as ?Aadhar? aimed at financial and social inclusion. ?The entire chain creates a need for technology as well as devices and specially tuned software and solutions and services. These are all areas we have a keen interest in and you?ll see a lot of things things roll out as the days go by,? says Sivakumar.
Since 1998, the company?s R&D arm in Bangalore has evolved into a critical part of its product development schedule, having contributed significantly to products such as its first six-core processor. The centre is now expanding its R&D efforts to areas like mobile internet devices, high-density packaging, thermal management and health platforms.
?They know they have a strong foothold in the PC market but the larger market is really going to be these kind of applications where there is no other vendor actually present in the market. And that?s where Intel is probably going to be pushing products,? says Ganesh Ramamoorthy, research director at Gartner India. However, he says that competition will likely increase in its core business with PC OEMs trying to exploit ARM?s low power technology for the PC and server market. ?Are we going to see ARM based PCs and servers in the market in the near future? I don?t think so. Not in the next 8-12 months time period, but these products will definitely be coming in. And when they do come in there is going to be competition for Intel in that space,? says Ganesh.
From its first sales office here in 1988, much of Intel?s success was driven by its ?Genuine Intel Dealer? programme that allowed it to penetrate deep into the Indian market. However, in recent years, its biggest rival Advanced Micro Devices (AMD) has been able to up marketshare partly aided by amendments to procurement rules made by several state governments which now places the two companies on a level playing field, says Sumanta Mukherjee, lead analyst for PCs at Cybermedia Research.
?The fact is that AMD is revamping their sales force complimented with new products,? he says. ?Of late we have seen AMD coming out with a lot of new processors which are notebook specific.?
Yet, Intel sees the significance of the India market as more than just a market for new devices. ?India going forward will increasingly become, in some ways, the test bed for technologies that some of the developing markets need, not just in terms of products but also in terms of pricing and business models,? says Sivakumar.