Low-cost PC at the cost of speed?

CHENNAI: While resellers are skeptical about the success of the newly introduced sub-10k PCs, many others are confident that this would bring in a higher degree of PC penetration in rural and semi-urban areas.

According to GS Raghu, managing director, Chira Information Technologies in Bangalore, “there will be an acceptance for these low cost PCs in the initial stages.” He doubts whether customers' interest could be sustained after a few months.

He said that the low cost personal computers, though touted as sub-10k PCs, would cost around Rs 11,500-12,000. This includes VAT, freight and handling charges.

The main challenge for the low-cost PCs would come from local assemblers who are offering PCs running on Pentium 4 processor for around Rs 16,000.

Even in rural areas, PCs running on Pentium 4 processors are priced around this range. “In a few years, this will even come down as many components are becoming less expensive,” Raghu said adding that people are looking for software stability, speed and compatibility in a PC.

As far as the speed of sub-10k PCs is concerned, they run on 1 GHz microprocessors of Via and Cyrix. They also use 40 GB HDD, 128 MB RAM over a Linux platform. Linux code is open source and manufacturers are free to install Linux OS on the machines. “It is cost effective for us, as installing Windows OS would not provide the cost advantage for small time PC manufacturers like us,” says Selvaraj, CEO of PC World in Tamil Nadu.

However, Xenitis launched their sub-10K PC is powered by Intel and uses Celeron 1GHz processors. According to Xenitis officials, Intel has committed around 3000 CPUs for Xenitis and would be marketing the products through a network of 1000 dealers spread across India.

Raghu said that there could be many takers if the PC could be projected as a common utility gadget like the telephone. He still doubts many would go for existing and proven brands even though they might cost a few thousands more.

“The choice will be like whether to buy a black and white or a colour TV,” he added.

Sundaram, director of Bloom Electronics in Coimbatore also agrees with Raghu. “Today, the customers want the PC to perform rather than just keeping it as any other product. The disadvantages of these low cost PCs are that they it would be slow and would not support any other application and the over all performance would not match the expectation of customers.”

However, there are many others who believe these low cost PCs would do well in the market.

“The price point would be an advantageous aspect as it would create a perception that PC prices are decreasing, and making it affordable,” S R Nair, CEO, Team Frontline Pvt Ltd, Kochi said. He also added that the resellers should be able to convert a significant number of enquiries into purchases.

According to Ashok Jhunjhunwala, Professor, Department of Electrical Engineering in IIT Chennai, “For technology to reach the rural masses, the affordable computing becomes necessary and is a forward step to take technology to masses.”

He went on to add: “Affordable computing revolution becomes essential to ensure the success of broadband, which would also make it available to the rural audience.” He believes that the configuration of these low cost PCs would get gradually upgraded as the PC penetration increases.

Union Minister for Communications and IT, Dayanidhi Maran, also hinted at the success of low cost PCs. During the launch of HCL's PC recently, he said, “the Union government is committed towards taking computers to the common man and the low cost PCs below 10K would really bring common man much closer towards technology.”

The government, earlier this year had convened a meeting with PC manufacturers to urge them to come out with low cost PCs.

“Today, there are around 100 million people with an monthly income of Rs 6000 per month and the low cost PC in particular, targets these income groups, which would facilitate them to come closer to the PCs,” said Ajai Chowdry HCL Infosystems chairman and CEO.

The sub-10K PCs are expected to serve the entry-level players in the home segment. These companies are targeting the first-time PC users, small schools and colleges in

rural and semi-urban areas, which would teach basics of computer.

“The entry of the low cost PC will never affect the corporates in cities and metros. However, it is expected to get to grow at the low PC penetration areas,” D Jagdish, COO of Connoisseur Electronics (P) Ltd, a Bangalore-based company. This company manufactures the 'Connoy' brand of PCs.