iPaq exits Indian market

MUMBAI: HP's quiet exit from the handheld arena has left the market virtually without competition, especially when this business was slowly trying to look up in India. As a result, players like Toshiba and Palm are all set to fill that void and are expected to create a monopolistic business.

Post-merger HP India has decided to go dormant on its once-popular iPaq range of hand-helds, citing reasons of high-duty structure being detrimental to iPaq's growth. "High-duty imposed on hand-helds was making this business a non-viable proposition for us. Hence, we decided to discontinue our focus on it. Maybe once the duty-free regime of WTO comes into place, we can again look at introducing iPaqs in the country," reasoned HP India PSG marketing head Shuchi Sarkar. According to her, while the demand existed for hand-helds, pricing of the same continued to be a major issue for customers.

However, partners report that being a quality product, demand of iPaqs still exists in the market and the vendor should have done something about continuing it. "We still get customers asking for iPaqs but we have to refuse. Ultimately, they end up buying these devices from the gray channel," said The Web MD Vikash Tibrewal. According to him, while the high price of iPaqs was an issue, there was a good buyer segment willing to pay a premium for the same.

Palm, in this regard, has acted very wisely and subsidized its products for Indian market to negate the duty. As a result, it has emerged as a clear leader in the Rs 7,000 to Rs 15,000 range of hand-helds. Further, decreased focus by Casio too has helped it to lap up many customers. "The absence of HP and Casio from the market, is a stark contrast to the increased investments from Palm. We feel that whatever little competition existed in this market before has reduced further," remarked Palm sales director (South Asia) Daren Ng.

Toshiba too is leading solely in the high-end hand-helds segment. Reason again is no competition, barring a model or two from Palm.

"Our handhelds are priced between Rs 25,000 to Rs 40,000 and are largely targeting the enterprise space. With iPaq no longer in the market, we hardly face any competition these days," said HCL Infosystems country head-sales and marketing Jyotin Verma. He added that Toshiba is confident of growing its handheld business by 50 percent to 60 percent in the current fiscal.

In order to tackle the strong presence of gray operators, vendors are also trying to offer customized software solutions for the handheld user community as a significant value-add. "We are also successfully running a program through Tech Pac that 'encourages and incentivizes' known gray importers to buy Palm products through legitimate Indian sources," informed Ng.

According to IDC, in 2002-03 nearly 20,000 units of smart handheld devices (SHDs) were sold in the country. The research agency believes that customized, task-centric software applications can really drive the hand-helds market in the country. However it has to be seen will HP resurface to grab a share in the pie or will it be just a Toshiba vs Palm game.

(CyberMedia News Service)