HP is mobile Moghul
By K R Nambiar
The mobile computer segment is one of the fastest growing markets in the technology industry in the country today. Growing at 89 percent during fiscal 2006-2007, the notebook segment is clearly cannibalizing the desktop market in India.
The notebook market crossed the million mark in unit terms in the last financial year. The market leader, with an estimated 40 percent share, was HP, with Lenovo a distant second with about 16 percent.
According to estimates by some HP resellers in Bangalore, HP’s consumer division sells more mobile computers than desktops in the metro. Clearly, notebooks are being considered not just as a corporate desktop replacement but also as a home PC alternative.
Beyond being a status symbol, the lower costs and a smaller premium over desktops (between 20-30 percent over a comparable desktop) make it a smart decision for even value-conscious buyers. Because almost all models ship with batteries, notebooks carry a perceivable value of a computer plus UPS.
The advertised prices of mobile computers ranged from as low as Rs 20,999 all the way up to Rs 1,50,000.
96 percent of notebooks that are sold in the country ship with an Intel processor. However, with AMD’s aggressively priced 64-bit chip Turion gaining popularity, more manufacturers are shipping models with Turion on board. AMD is likely to score better in the coming days.
The affordability of notebooks has opened up many new markets, from the home and student market (especially higher education) to government.
While Intel ran a number of pilots over the past two years to revive the white-box notebook PC market, aggressive pricing by the likes of Acer, HCL and Zenith has virtually nipped this segment in the bud.
Marketing and branding
The most important criterion which resellers saw for aligning with a notebook vendor was the overall brand awareness and vendor generated brand-pull. Presumably, with volumes growing and margins declining, respondents were not willing to go that extra mile to push a product that does not have the necessary brand appeal. Rather, they feel it is better to supply a brand that customers prefer.
Respondents felt that HP with its dual-brand strategy had a bigger brand-pull than Lenovo, Acer and Toshiba. While Lenovo and Toshiba are strong favorites to challenge HP in metros, it is Acer that is second to HP in the B- and C-class cities.
Respondents also agreed that ever since celebrities started endorsing various brands there has been a significant growth in awareness among consumers, and it was easier to push those brands now.
Price-performance
Since mobile computers, like mobile phones, are almost personal accessories, especially for the mobile executive or for that matter even a home-maker, the style and look of the product matters, according to our respondents. Survey participants operating out of plush retail stores, especially in the larger cities, are univocal that product styling attracts customers to their stores and influences buying decisions.
While HP was again the overall winner, some respondents from metros pointed out that Sony and Toshiba models are seeing increased demand, forcing them to align with these vendors.
In B- and C-class cities, Acer has done much better as its price/performance translates to immediate value for money which seems to be the company’s forte.
Service and support
For resellers addressing urban mobile user communities, comprehensive international warranties mattered as customers preferred that. At the same time, in B- and C-class cities where the selling point revolved around value or a matter of style and status, local service support was more important. In many cases, resellers in B- and C-class cities offer personalized services, including attending to customers onsite whether a vendor actually provided such an option or not. Having a local (or nearby) service point makes it easier for such resellers to attend to customer needs than to send the product to a big city close to their town for repair.
Once again, HP was seen to have the best network of service centers and support packages, according to our respondents. Lenovo and Acer follow HP in this category, while Toshiba fared poorly in the smaller towns.
Channel relationship
HP has the maximum number of sales/support personnel in the field, and resellers yet again voted HP as the best among the notebook vendors. Lenovo came second, while Acer pipped Toshiba to the third spot. Acer did exceedingly well in certain pockets in south and west India.
Product availability
While city-based resellers did not find this a major issue, availability (or rather non-availability) of some of the higher-end models was hurting vendors and their relationship with their partners in smaller cities. HP, having the biggest distribution network, is high on availability, but Toshiba and Sony scored low on this parameter.
Conclusion
HP has come out as the winner, topping in almost all criteria. But despite being an overall leader, it is interesting to note that HP is neither slowing down on its growth plans nor is it taking the market for granted. The company is making more investments in every aspect of the business whether it is going after niche verticals, setting up more service outlets (including appointing more ASPs), or doubling its sales and channel support forces in the market. It is also making continuing investments in marketing, lead generation activities (both top of the line and below the line) and branding.
Lenovo came second, but needs to do a lot of catching up. Acer’s strength remains its price advantage, yet it has been pushed to the third spot.
Toshiba, despite being priced higher, has bigger brand appeal in metros, and finds favor with many dealers in A-class cities.
Intro
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