The IT industry is known for innovations, short product life cycles and sharply falling prices. Today with low cost/low power microprocessors and permutation and combination of different storage devices/capacities and display sizes, the price point of near Rs 5,000 for computing device is a distinct possibility in the next few months. Rs 5,000 is definitely an attractive price point. But, even if we were to achieve a device costing less than Rs 10,000, it will open a whole new market segment.
While in the hardware industry, we are confident that such a price point will be achieved sooner or later, the challenge for a market like India is not limited to just the price point of the box; it is an issue of perceived value proposition.
Low-cost personal computers(PCs) can push sales to a point. Beyond that, there is a need for value offerings, in terms of relevant content and local language interface. The demand can be generated through various means?increased broadband penetration, good Web content and a compelling reason for people to buy PCs.
We need to convince the middle class of the benefits of buying a PC. Today, people question the utility of a PC but not a television (TV). A computer today is seventh or eighth in the priority list of the middle class. PCs today open a window to online railways? and airlines? reservation, utility bills payment and banking, thus saving us from the hassle of standing in a lengthy queue. Today, we are struggling with an installed base of just about 4 million broadband connections. This is definitely not a critical mass to unleash the entrepreneurial spirit of our younger generation to develop content in local context and eventually in local languages. We have tried out several experiments including ultra low-cost notebook PCs that contain limited features and limited functionalities such as no optical disk drives, no hard disk drives and are primarily meant for internet surfing and responding to emails. Initiatives for deployment of networking computing are also being carried out in Chennai.
While the prices of PCs and other access devices in India are one of the lowest in the world, we need to strengthen our broadband infrastructure at a rapid pace to sustain the domestic IT market. This calls for an early resolution of the last mile and spectrum allocation issues, without which we cannot have a virtuous cycle for domestic IT consumption. A robust broadband will usher in a slew of services, relevant applications as also content in local languages, which will create the necessary pull-factor and further drive the IT products market.
The vision announced by the IT minister at a recent convention of 500 million internet users, 100 million broadband connections and 100 million connected devices is truly laudable. However, it can only be achieved if an eco-system based approach is adopted along with a consummate strategy for a virtuous cycle with one element feeding and contributing to the other.
Focus on any one element such as only reducing the price point of the device will only create an incremental impact in improving the IT penetration without the desired multiplier effect. The economic empowerment of our billion plus population through internet will be the right step towards realisation of our goal of becoming a knowledge-driven economic giant.
?The writer is executive director, Manufacturers? Association for Information Technology (MAIT)