Aswini Umamaheswaran Abheek Biswas Bishnendu Roy Nithin S Nair

INDIAN LAPTOP MARKET

Team 10

Laptops are handy and compact. These portable computers are easy to carry anywhere. They are also known as 'notebook computers.' An increasing number of computer operators are switching to laptops for easy working. Laptops in India have become widely popular and essential for every business in the last few years. The laptop prices in India are very competitive, as many brands are vying to capture the market in cities and small towns. As technology advances, price of newer models raise the bar for rivals. It also allows previous models to be sold at more affordable prices. The price of laptops in India is more or less similar to other markets in the world. But some brands are cheaper to buy in India. Laptops prices range from a bottom price of an assembled model costing Rs. 20,000/- or Rs. 1, 25, 000/- for a premium multinational brand. There is also a growing market for used laptop computers in India. New Laptops computers ranging Rs.40000/- rupees in India are currently the most preferred ones. The usage of laptops increased once it reached the student community, which benefits s lot from it. Laptops are trendy portables allowing mobile business to flourish. They are time saving machines at the workplace or home. They can also be connected to the printer and the internet which makes them better utility machines.

Laptop Market
According a Manufacturers' Association for Information Technology (MAIT), India's hardware industry lobby, Indians have started purchasing notebook computers faster than the industry would have thought, with notebook sales growing at 114 percent in the fiscal year 2007-08. This excludes notebooks imported by professionals on their personal account. In the first half of the current financial year, Indians bought nearly 680,000 notebooks, compared to 36,000 units in the same period four years ago, said a recently released performance review of MAIT. It added that the momentum in the Indian notebook market is finally in sync with the global trend, where for the first time in 2005 notebook sales surpassed desktops sales. "Clearly, notebooks are competing with desktops with convenience and productivity scoring high", said MAIT adding that notebook sales have also found their way into homes. So what's driving this sudden awareness of notebooks? After all neither notebooks nor laptops are new to the Indian IT users, and just like the desktops, computer makers were trying hard for years to push sales of notebooks too.

"One of the biggest factor pushing sales for notebooks is the affordability factor or reduction in prices" says Rajiev Grover, country category manager, Hewlett-Packard India. "India's personal computer market is undergoing a major transition as premium notebook computers are being brought to the mainstream, with almost half the prices, compared with a year ago." On average, the prices of entry-level notebook computers now range between $800 to a little over $1000 compared to $1500 to over $2000 that prevailed about 36 to 48 months back. Moreover, notebooks now cost only around $200 more than a high-end desktop personal computer, which is also driving many desktop buyers to opt for notebooks. However, according to Vinnie Mehta, the executive director of MAIT, another key driver has been the growth of newer professions, that not only require different working styles but also mobile devices for anytime-anywhere computing. "For instance many type the IT-enabled workers or back office workers (like medical transcription workers) need not work out of an old fashioned office anymore. Similarly many financial and marketing sector professionals need to be one the move always," says Mehta.

Other factors like government policies helped too. "For instance, the government now allows duty free import of notebooks as personal baggage that has helped in increasing the notebook penetration with the people becoming more aware of these devices," Mehta said. "The government's focus on improving the IT infrastructure that has brought in technologies like wider wireless network (WAN, WiFi), which allows linking up of mobile devices to the internet at any place, has propelled its sales as well." "The progression actually came from mobile phones, where people in India started to engage in mobility as a part of their business," he added. Industry sources say that desktops which was the "symbol of corporate vanity till the other day are slowly becoming pass with notebooks now the mainstream." And all this means that its party time for notebook vendors. But yet another important trend that is emerging from this shift is that while the multinationals notebook vendors are experiencing burgeoning sales, local notebook makers' cash registers aren't really ringing that loud. "We don't expect notebook sales to match our desktops for quite some time," says Raj Saraf, chairman and MD, Zenith Computers, a biggish local personal computer manufacturer that claims to sell "MNC computers and local prices."

And the reason why MNC brand names are outselling local ones is that "we have been scoring one up on the utility factor," said the local spokesperson of Fujitsu PC Asia Pacific. "They (MNC brands) are growing and gaining the choice of the user not just because of the narrowing of the prices between desktop and notebooks but also because we have amalgamated next generation technologies like bluetooth and Wi-Fi with mobile computing to bring more utility to notebooks." But it is also true that MNCV brands have been more aggressive sellers. "The last couple of years have seen intense price wars, with leading brands including Acer, HP, Lenovo and Dell forever racing to slash the price of their notebooks," says Mehta of MAIT.

Major Players
There is always a tussle between rival brands. Companies introduce new software programs and upgraded versions regularly. Growing competition in technology has given a rise to generate better quality laptops. The rapid expansion also makes a model redundant as quickly as two to three months.

Dell
Dell is a known computer company worldwide. It is a branded diversified information technology company. It stands number three in terms of selling products and comprehensive services to customers globally. Dell India Pvt. Ltd set its ground in India, in the year 2000 by making Bangalore its base. Dell India ranked top in regards with sales and services by DQ-IDC Customer Satisfaction Audit. Now, Dell is all set to create waves in launching new models of laptops. The prices for dell laptop india notebooks match the quality they offer. They are more expensive than the other brands as they are assembled and sent to the country. The duty has to be paid and this makes the pricing a little higher. As the number of executives who globe trot have increased the portable notebooks have become a part of their briefcases.

Dell has been one of the early companies to start production in Sriperumbuder near Chennai, India. In Asia the other production centres are China and Malaysia. According to reports there has been an increase of 30% of laptop users since 2005 in India. Like mobiles the PC market is also set to see a retail revolution. As India production has begun there are chances of getting Dell Computers at more competitive rates. They have dropped their prices by 11% to gain entry in the Indian software market.

AMD
Advanced Micro Devices, Inc. (AMD) holds fort in IT world for the last three decades. It is based in California, USA. It was founded in 1969. AMD came to Bangalore, India in 2004. Since then, it is creating multi-core processors and is giving customer satisfaction. This award winning company is the second largest supplier of x86 processors. AMD also is the second largest supplier of Graphic Cards and GPUs. In the year 2006, among semiconductor manufacturers, AMD ranked eighth. AMD processors in laptops, are also known as 'notebook processors', include AMD Turion 64 X 2 Dual-Core Mobile Technology, which is especially made for mobility. AMD Athlon 64 X 2 DualCore Processor for Notebook PCs, is affordable with Dual-Core performance for notebook PCs. AMD is known best for its graphic image display. It can be advantageous for game lovers. AMD processors have high battery backup and other advantages. AMD is soon to enter the world market with a new and advanced range of integrated processors. Another reputed company Toshiba is using the AMD chips for their computers and laptops.

The prices for AMD Laptops in India could be quite cheap in the next few years. The chip that AMD makes rivals only Intel and in India they are trying to get more competitive. Just like Pepsi and Coca cola the two companies are rugged in their approach to penetrating the software giant country today. It is selling lower than Intel and this could swing a market slice in their favour in time to come. With the use of AMD chips the laptops can come for as cheap as Rs. 10, 000/-.

Compaq
Compaq Computer Corporation was founded in the year 1982 in USA. COMPAQ stands for 'compatibility and quality', a company formed by Jim Harris,Canion and Bill Murto. Compaq is linked with Hewlett-Packard and the two merged in 2002. HP is the brand name for Compaq worldwide. HP in India was established in February 2002. The base was set up in Bangalore. The main aim for this is to meet the needs of Information Technology of billion HP customers. Today, HP has launched a series of Compaq laptops ranging from Rs. 20,000/- to Rs. 80,000/- with useful features to met requirement of a huge customer base in the country. Many dealers and vendors in the market are keen on lowering the prices to get more customers. With the reduction of import duties and customs in India the computer vendors are giving discounts to their customers. Laptops companies that never bent rules or lowered prices are able to do so now. Hence the benefit is passed to the end user. Prices for Compaq Laptops in India have witnessed many drops since 2004. Many consumers who fear that due to lack of sales the

PC companies are lowering their prices are not entirely a myth. As the market in India shows an upward trend companies are looking at increasing the market shares. With the entry of Compaq computers and other multinationals the local companies may lose a sizable customer base. International brands have now less to pay at the entry level in the country. Unbranded vendors are now looking at further slashing their prices when branded names like HP and Compaq are all set to conquer the competition.

Sony Vaio
Even an uninitiated person can identify smart Sony VAIO laptops in India. Reason? Its attractive looks have made it a status symbol for some top travelling executives. The colour choices replete with upgraded technology and features have made it viable for the company to even sell their premium range of laptops at more than Rs. 1,00,000/-.Sony has been a very in-your-face brand for many years in India. With other electronic products this Japanese giant has garnered more customer base for their new laptop division in the country. The VAIO CR series have a colour palette of red, blue, soft white, powder pink and classic black. Young India has certainly noticed this and covets it more than the highly rated mobiles. It has a range of in-built multimedia, entertainment, Av mode, bright LCD lights, built in webcam, and simple interface for blogging. Prices for Sony laptop india are equally eye catching!

It starts with Rs. 55, 000/- with additional features at extra costs. Since they know that there is enough competition in the country from America and local computers they have reasonable prices. The end models for one lakh and above are unique and can be found with select dealers. Buoyed by the response form all customers Sony is now going to pump in more money to introduce more sleeker models. Laptops shipment into the city harbours increased from 25 % to 40 %. While rivals like HP is still dominant Sony is proving to be a tough competitor. No doubt the attractive looks will fetch more cool customers for the brand.

HCL
Technology is thrashing it self with each passing day and admiring its own potential. The pinnacle of contentment lies in more complex but easy to use gadgets to be developed. Moving along with technology HCL India is validating themselves to be best in the Indian market. Advanced technology and latest market trend is blessing HCL laptops India. Laptops are the mainspring of our life and in this technological era, life without laptops or notebooks is unimaginable. When we think of buying laptops or notebooks from the Indian market, HCL Laptop India sparks our mind with innovation, technology and high end features. It is considered to be one of the best and the leading laptops in the domestic market.

Advanced technology and requirements of Indian customers have compelled HCL to offer the latest technology implemented in laptops/notebook. HCL computers India laptops is providing stylish, jazzy and powerful laptops, keeping in the mind the needs and demands of Indian customers. Each and every single piece of laptop designed and manufactured by HCL is unique in its own way. It is believed that these laptops are providing their metal in the electronic industry because of there fully functional technology and key drivers. The key HCL Laptop drivers are the three basic features that HCL implements in all their models. These features are slim, light and power. The brand is acclaimed for making the slimmest and light-weight laptops in India. They also implement highly technology oriented power and add colors to their models. All these features, attractive colors, ravishing look and high end technology integrated together gives over the edge advantage to HCL laptops in Indian market. The brand also know the art of advertising and promoting their products. HCL India has the power and ability to beat the competitive market and win accolades.

PRESENT MARKET PICTURE

SALES GROWTH

Annual sales has grown by 114%; CAGR: 104% Households: 44% of the market growing at 150%, Businesses: 56% of the market growing at 93%

SALES GROWTH - CITY WISE

Notebooks are rapidly penetrating the markets beyond the 4 metros at a growth rate of 152%

GLOBAL MARKET SHARE

Q1TOPNINEBRANDNOTEBOOKCOMPUTERSHIPMENTS

INDIAN MARKET SHARE

World Scenario
Hewlett Packard (HP-20.8%) holds a lead of 5.7% over Dell (15.1%) with Acer (14.6%) trotting closely behind. Highest YOY increase was achieved by Asus (67%), Apple (61%) and Lenovo (58%). With only Sony (3%) faltering on YOY growth all the other major players had close to 40% growth. Statistics indicate that HP is going to have a tough road ahead to maintain its lead in the laptop market.

Indian Scenario
In the lines of the global scenario, Hewlett Packard (HP) still maintains the top slot in India with a market share of 37.8 per cent, while Lenovo (16%) occupied the second position and Acer (10%) third. Notebook PC sale in home and `Small Office and Home Office' (SOHO) segments grew by 166 per cent and made up 43 per cent of the total business. The next largest contributors were enterprise and education segments.

GOVERNMENT POLICIES

Laptops are covered under Information Technology Agreement-I (ITA-1) and have enjoyed exemption from basic customs duty on import. Excise duty: duty Complete exemption for local manufacturers from excise duty. Imported computers subject to additional customs duty (levied in lieu of excise duty) equivalent to 7%. VAT: Computers have a concessional rate of 4% (importance attached to the IT sector in India). Tax changes: Goods and Services Tax (GST) regime to take place in 2010. GST would ensure a simpler and more transparent tax regime and address issues concerning cascading of taxes taxes, multiple compliances, compliances etc. The Finance Bill, 2008 has p proposed p to include computers, p including g laptops, under the MRP regime of excise.

MARKET SEGMENTATION

NOTEBOOK CONSUMPTION IN BUSINESS B Employee By E l S Size

Overall consumption in the business grew by 41% Consumption p in large g and medium enterprises p grew g by y 66% and 61% respectively, however in small enterprises it declined by 10%

NOTEBOOK CONSUMPTION IN BUSINESS B Enterprise By E Size S

Overall consumption growth in the Businesses Segment was 16% Sales to large enterprises grew by 25%; to medium enterprises b 11% by Sales declined in small enterprises by 7%

SECTIONAL PROFILE OF HOUSEHOLD NOTEBOOK BUYERS

Overall household market increased by 164% Sales to SEC A increased by y 161% and to SEC B by y 296% Sales to SEC C in 2007-08 were negligible

BASED ON GEOGRAPHY

PC consumption in both West and South grew by 39% each. In East, it grew by 10% while in North, it declined by 13%.

BASED ON GENDER
Global information technology giant Hewlett-Packard (HP) is set to launch its special lines of products, targeting women and the youth in India. y look for easy y mobility y and sleek Women usually looks, so the womens product line will be based on those premises. Texture of the body of the laptop is another factor that women take into consideration while purchasing, so our products will reflect that that. .

BASED ON AGE AND LIFE CYCLE

Kids laptops are very popular now-a-days. Some of the laptops in market are:
Star

Wars Darth Vader Laptop VTech Double Vision Notebook VTech Nitro Notebook Hot Wheels Accelerator 5.0 5 0 Learning Laptop

Though g much market has not been created, , there is lot of scope of exploring this segment.

MAJOR MARKET PLAYERS AND STRATEGY

HEWLETT PACKARD
STRENGTHS Leadership Position. Consumer Centric Brand. Strong after sales service. Design Strategy: looks. Cost Strategy. WEAKNESS Low Flexibility: Unlike Dell, HP does not have high g customization available. Decline in digital entertainment market. Software Service.

OPPORTUNITY PC business. Service Industry: Bought W ld no.2 Worlds 2 service i provider, id EDS.

THREATS Pricing pressure. Component pricing. Sl revenue growth. Slow h

HP Market Strategy

Mission: Maintain Status Quo as market leader, and continually innovate to strengthen position. Products: Notebooks, Tablet PCs, Desktops, Gaming Systems, Printers, Toner, Paper, Scanners, Monitors, Servers, Software, Networking, Accessories. Pricing: Oracles Siebel technology reducing marketing spends by 15%. Cut notebook b k prices by b 15 to 20% creating a volatile l l price war. Promotion: Innovative word of mouth marketing called the 31 days of dragon. d ago . Associates ssoc a es with w various va ous Hollywood o ywood themes e es to o target a ge movie ov e going go g audience. Place: Uses online method for booking. Has outlets in major cities. Product Development: HP has launched aggressively into the Indian market. Ease of availability. Diversification: M&A: In August 2001 HP and Compaq came together to merge by 25 billion $ stock deal.

DELL
STRENGTHS
Inventory turnover rate is 6 days. Revenue Growth at 100%. C t efficiency. Cost ffi i Direct to customer business model: minimum credit risk. Latest technology gy Customization. Internet sales leadership: $5M everyday, worldwide.

WEAKNESS No proprietary technology. High dependency on component suppliers. Lack of Software Support for customers.

OPPORTUNITY Network service in B2B. Strong potential in China and India. Low costs and advanced technology. technology Growth in business, education and government markets.

THREATS Dells market share very less. Price range considered premium. Currency fluctuation. fluctuation Political instability. Tariff trade barriers.

DELL Market Strategy

Products: PC PC, laptops laptops, customer service service, storage storage, workstations workstations, and auxiliary services. Pricing: Direct Model approach, pricing below competitors. Promotion: On-line model, direct mail order, catalogues, Premier Pages, special training and certifications, editorials, reviews, sales reps, and awards. Pl : Direct Place Di t f from Dell: D ll O On-line, li t telephone, l h mail-order. il d Market Penetration: Continue to do more of the same. Product Development: Pursue Mid-Range Server Growth. Growth By 2001, 2001 Dell was the market leader in entry level servers, but had no presence in the mid-range server market. Increase product line: New products like a PDA. New International Market Development: Enter new markets with existing products. products Merger and Acquisitions: By 2000, the external storage market was growing at 23% per year. By acquiring an innovative leading company like the EMC.

LENOVO
STRENGTHS National Image (China) Knowledge about local market: Lenovo excels in its strategy for the Chinese market. Strong R&D: Taken over from IBM. Mass manufacturing capability. Quick Responsiveness. OPPORTUNITY Import barrier. Increasing global demand. Internet boom. boom Growing wireless pc market. Governments association. WEAKNESS Poor global brand perception. No pure electronic sales Low inventory turnover: About 40 days. Poor After sales service. Limited knowledge of global market.

THREATS Heavy competition. Industry reaching maturity. Software piracy and clone market. market Little firms growth.

CUSTOMER EXPECTATIONS

UPGRADATION
We are expecting that the upgradation of laptops will be one of the most important requirements of the people owning laptops If the laptops are made compatible enough to laptops. integrate these up gradations and also done at a reasonable price, p , it will attract more customers to the p product.

SECONDARY MARKET
People buy second hand, because it is very easy to change the parts of a PC. It is expected that given the chance of buying the laptop second-hand with proper provisions of warranty and reasonable price exchange people will buy it.

SURVEY OF MAJOR MARKETS

Main areas and features to provide provide: Strive to provide the best possible customer experience. Demography: The age group was primarily 18 to 35 years. The targeted customers are majorly students and professional. An interesting result was that most of the people who bought the laptops gave ratings as good good and very very good good to the performance of the products they had used. used The respondents wanted an Apple laptop when given a choice for the dream laptop. Dell was the first runner up followed closely by HP. The hardware specifications are the first choice for the users when choosing a laptop. The second choice is the brand name followed closely by price. Warranty y & Services, , Mobility, y, Design g and Bundled Software follow suit. This is an interesting insight to the user preference and can prove handy to laptop manufacturers when constructing a laptop for the target audience. Pricing P i i : Respondents R d t were ready d to t pay a high hi h price i f for quality, lit sturdiness t di and performance.

SURVEY OF MAJOR MARKETS

Need of the Market:

Upgrade the laptop. About one-third of the respondents do not want to upgrade their laptop. Battery management High Graphic capability Heat Control in the laptops TV tuner card light weightiness Keyboard Lighting

EXPECTED MARKETING MIX

Product: The new product launched will have a better Battery management and heat controlled Laptops along with an inbuilt TV tuner card and also will have a light weight. Additional feature provided will be keyboard lighting. Full customization will be provided for customers. customers Price: Rs.30,000 to Rs. 50,000. A low pricing strategy can also be used by selling laptops p p lesser than competitors p Laptops. p p Promotion: Television and Radio advertisements can be used to introduce the product in the market. The fulfilled needs should be communicated. Also advertisements should b shown be h on news channels h l and d sports channels h l as the h target market k is i students d and d professionals. Internet, and print media can be used to support the initial promotion. Place: Very effective distribution techniques should be used used. To cater the unfulfilled need of upgradation, the process should also be very easy and less time consuming. In metros free home delivery of the parts can be done and engineers can go house to house to upgrade the Laptop. Laptop In small towns all the laptop sellers can have a separate department for up gradation and all the up gradation related queries and installations can be handled there separately.

CONCLUSION

LOOKING AHEAD

Notebook N b k industry d is the h future f of f personal l client l PC C market. Based on predictions, the mobile computing notebook devices market are subdivided as ultra mobile sub notebook PCs and notebook PCs. Innovative educational laptops like like, $100 laptops are also looked at as the products which rule the future of Indian notebook market. Laptops with extensive multimedia features continue aiming to gain more personal, home notebook users, whereas notebooks with longer battery life and Higher performance will continue to cater the needs of business professionals.

LOOKING AHEAD

Gaming industry being itself in very nascent stages. There are several series in Dell and HP which cater to this group already. High speed connectivity and low weight notebooks generally are most demanded ones today. HP being top performer in multimedia and personal computer section should try to concentrate more towards capturing large organizations, and dell the vice versa. Though notebooks are seen as the replacement of desktops most of the times, it is still a long way before notebooks sales overtakes that of desktops in number of units sold.

REFERENCES

http://www.mait.com for Market Segmentation graphs http://policies.gov.in/ for government policies http://www.intelIiquest.com/resources/technicaI/Mar ketSegmentationOverview_MBIQ_June24.pdf for Market Segmentation http://www.utdallas.edu/~tskim/Lecture%2ONote% 206 pdf for Market Segmentation 206.pdf http://www.scribd.com for market strategies