Monday,
September 23, 2002
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Feature |
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PC prices sink, sales
buoy
Manoj Kumar
WITH
the slashing of computer and processor rates by market leaders, like
Intel, Compaq and IBM over the past few days, the sale of PCs has picked
up in the region. Sources in the market say the sale of personal
computers (PCs) is better as compared to the previous year. The cut in
price of PCs and processors by the brand leaders have further boosted
the sale of assembled PCs, along with the branded ones.
Atul Jaiswal, branch
manager, Redington (India) Limited, says, "We have witnessed an
increase in the sales of PCs by 15 to 20 per cent till the end of the
last month in the current fiscal as compared to the corresponding period
during the previous year. With the slash of PC and processor rates by 25
to 40 per cent, Intel, the processor giant, has initiated a price war.
The impact is quite visible in the sales during the past few days.
Compaq and Intel have also slashed the prices of their products."
He admits that like
other places in the country, Punjab and Chandigarh are also dominated by
assemblers and small local brands. He says, "Nearly six months ago,
with the bridging of price difference between branded and locally
manufactured computers, the market had slightly shifted towards the
branded ones. However, with better management and cost-cutting measures,
the local brands have bounced back. Now their share is hovering around
75 to 80 per cent in the regional market, as compared to 69 per cent at
national level.
Insiders admit that due
to financial crunch and saturation, the demand in the government
departments and large-scale sector has dipped over the past few months.
The sales are now driven by the small and medium scale sector, along
with household and educational institutions. Jaiswal feels sales in
Jalandhar, Ludhiana and Amritsar and other major towns in Punjab are on
the rise and the dealers are now penetrating into smaller towns and
border areas.
However, Naveen Beri,
partner, Atlantic Computers, Chandigarh, says, "Intel’s
initiative would have limited impact on the market as the company has
slashed rates in the higher-end segment of P4 computers with 2.53 GHz
and 3 GHz that have few takers." The company has slashed the price
of 2.53 GHz, computers from about Rs 29,000 to Rs 19,000 and of 3 GHz
computers from 60 to 70,000 bracket to nearly Rs 35,000. However, the
rate of PCs in the lower segment has been slashed by Rs 4,000 to Rs
8,000, he adds.
He claims the total
sale of PCs in Chandigarh and Punjab is 6,000 per month, which should
increase by 10 to 15 per cent during the remaining period of the year.
Interestingly, the sale of branded computers has increased in the city
as compared to Punjab, says Atul Jaiswal. Samsung, Compaq and IBM are
the leading brands, but the assemblers are trying to keep up their share
by improving their after-sales service and cut-in profit margins.
Beri laments that
despite increase in the sales of PCs, profit margins have drastically
declined over the past one year. Earlier, the dealers were making a
profit of Rs 2,000 to Rs 3,500 on the sale of each computer. Now they
are ready to sell for a meagre profit margin of Rs 400 to Rs 500. It has
happened due to the increase in competition between branded and
assembled computer manufacturers and among assemblers themselves.
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