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I entered the business of technology in the 1970s lured by the
high growth potential of the industry and the hefty margins enjoyed by component
traders at that time. Not satisfied with selling other people's products,
Zenith was established as a brand against major competition over 25 years ago.
This was even before the PC was born. We introduced new technologies such as the
Open OS, SuperCalc to India even before the multinationals did and being an
industry pioneer is the reputation we have enjoyed since.
The first PC products had high levels of innovation for high-end
corporates and some of my clients include the recent president of the country.
It was a time when PCs were a specialty product and I remember a deal where we
bartered a PC against flats in Mumbai. At this time, the price of a PC was Rs 3
lakh.
We have always believed that the country needs PC penetration
and it has been our endeavor to improve technology and reduce prices. We are
known as a price warrior of the industry and are always glad to be attributed
for PC growth in India.
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| Raj Saraf,
Chairman & Managing Director,
Zenith Computers |
Unfortunately, the belief that the demand for PCs will grow as
the price reduces, is not exactly another Moore's Law. When I was selling
laptops way back in 1991, the common saying was 'if the price goes from Rs 2
lakh to Rs 1 lakh, everybody will buy a laptop!'. The price is now as low as
Rs 25,000, but laptop penetration is still negligible compared to more developed
economies.
The bigger issue is the demand for a so-called '10k' PC. The
government's belief that PC demand will shoot to 28 mn units at the magic
price point has been proved wrong. Zenith decided from day one not to indulge in
this product which is a lose-lose situation for the manufacturer, suppliers,
dealers and the customer. Yet, compared to China and Mexico's PC penetration,
India, being a knowledge economy, cannot compare. Then what is the factor that
will boom PC penetration in India? The answer-software.
Much to my chagrin, hardware has always been the foster child of
the India government. The government and various bodies have been pressurizing
PC manufacturers to reduce prices. And we have given in. From selling PCs at Rs
3 lakh, we are now selling it at Rs 13,000. Yet, the results have not been
achieved. Even if the PC price becomes Rs 1,000, the demand will not grow
exponentially.
Looking at the contribution of hardware, what has the software
sector done to increase PC penetration in the country? Have they made software
for use in vernacular mediums so that every Indian in every small town uses a
PC? What stopped them from making an OS specific to India?
In my opinion, the software segment has done nothing to help the
cause.
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hard-pressing issue is a soft problem. Looking at the contribution of
hardware, what has the software sector done to increase PC penetration in
the country? |
Right now the cost of software is more than the cost of
hardware. The PC prices may become one-tenth, but the cost of OS, word
processing, anti-virus, etc, is still constant. Till the price of software does
not reduce and is not made in vernacular languages, the government can stop
dreaming about PCs-for-all.
Why doesn't the government put a 5% IT surcharge and create a
software fund, like in the case of other industries such as steel? Why won't
anybody point fingers at software companies and ask them to make software for
India the way they have made for China? Why won't an Indian large software
conglomerate ever create a product for India?
The hardware industry has contributed in building the base for
PCs in India through innovation and price drop, and taking the PC to the Indian
hinterland. It's time the software guys did something too. Page(s) 1
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