Low-cost laptop is the latest buzzword in the market today. Though the category is still not clearly defined, but based on the current scenario, it can be defined as a sub Rs 20,000 price band. One could see a series of announcements and product launches by IT vendors in this space (HCL MyLeap, Asus EEE PC etc). It is notable that apart from being low-priced, these products are also limited in their functionality as compared to a fully loaded laptop.
The key question is, whether it is a mere hype or is it going to be the mantra for next phase of PC growth in India? Will it find enough takers? These questions become very important, given the high hype and low performance of the low-price desktops. The answer is definitely not so simple and multiple perspectives need to be discussed before arriving at any conclusion.
First and foremost, the laptop market has been growing rapidly, more so in the consumer space. This has been possible because of new ?relevance? for a notebook being created in a consumers? life, which is further boosted by the falling prices. These relevance are around the emerging paradigm of ?social networking?, ?mobility? and ?entertainment?. It is no more seen as a computing device, but much more than that. The consumer laptop sales grew at 340% in 2007 over 2006, with 5.6 lakh laptops sold. A new price point of sub Rs 20,000 is surely another dimension being added to the phenomenon of falling prices observed in the last few years.
At the face of it, it appears that there will be massive boost to the laptop sales. But it?s here that we need to keep in mind that consumer purchase is always a combination of both ?relevance? and the ?price? of the product. Neither of these parameters alone is sufficient. Hence, a low-cost PC, with stripped down functionalities and features may not always sell just on the ?price? plank. At best, it can play an important role of generating interest and attracting new customers towards ?laptop? as a product category, who may eventually buy a relatively higher-end version.
The other aspect, which is important to note is the emergence of ?smart? mobile phones, which with the advent of 3G, is also promised to provide features like ?internet/ email?, ?social networking? and much more. It would help us put the discussion in the right perspective to note that 40 lakh smart handhelds (SHDs) were sold in 2007, a growth of 31% over the previous year.
That?s 7.14 times of the laptops sold during the same period in the consumer segment.
It is not difficult to visualise that a consumer would intend to go for one gadget, instead of buying two. Especially, when the second one being a low-cost laptop, which provides limited/niche functionality and usage. With computers and mobile phones merging, the possibility of a low-cost laptop with limited functionality does not spell immediate success. In order to be successful as a product at a lower price band, laptops will have to provide functionalities, which are unique and address specific relevance in a consumer?s life. Else, it will end up being a mere interest generating exercise for laptop vendors.
I am again reminded of the fact that Indian consumers are not price-sensitive, as it is popularly believed, but what they expect is value for money. Playing only on price may not be a good idea; laptop vendors should define new and unique value propositions to make the difficult task easier. They have the twin task of creating a new user segment for laptops and simultaneously competing with the range of smart mobile phones available in the market, both currently and in future.
?The writer is country manager, IDC (India)