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What goes up comes down, ultimately. This seems to be ringing true for the notebook market in the country too. Fiscal 2004–05 saw notebook sales soaring to unprecedented numbers, with massive cuts in the end-user price points. Proof of that comes from the ongoing price war that's been unleashed by companies like Acer, Lenovo, and Zenith. For the year ended March 2005, laptops witnessed a huge growth with volumes touching 220,610 units, as against the previous year's 91,180 units. In the notebook paradigm, low-cost notebooks constitute the Rs 25000–45,000 offerings. Their processors range from Centrino to AMD Sempron.

We are now in the last five months of the current fiscal, and price slides in the notebook space showed continued traction till now, with prices hitting an all-time low. For instance, Acer breached the price barrier by launching a notebook based on Intel Celeron M processor, for about Rs 25,999. Meanwhile, Lenovo brought in a workhorse machine in the sub Rs 43,000 space, with Pentium M processor. Neeraj Sharma, managing director, Lenovo South Asia, does not hesitate in saying, "The notebook market had a fantastic Q2 this year growing at the rate of 60% compared to Q1. Growth has been driven by factors like excellent technology features for enhanced performance, data security, and product durability. The mobility factor and access to information and applications at any time also contributed to the growth"

Configuration Matters
One of the biggest trends over the last one year was the notebook market aligning along defined buying segments. While the high-end, ultra portables still remained upwards of Rs 65,000, the biggest development in Q2 2005 was the Centrino machines breaching the sub Rs 40,000 price threshold. For instance, players like Zenith launched Intel Centrino notebooks priced at Rs 39,990 with DVD combo optical drives. So, the consumer options during the last quarter have clearly expanded. At the sub Rs 30,000, they can go in for a Celeron M–based notebook and by shelling out a few thousand more, there are also the P4- and Centrino-based notebooks. But will this alter the desktop to notebook ratio in the days ahead? Response from the vendors is one of cautious optimism.

For their low cost offerings, most vendors pitch to the education and the home segments-as these are the buying segments that are most likely to go in for low-cost notebooks. Moreover, there is a perception that low-cost notebooks are limited in functionality. But vendors aver that the price slides are more to do with decreasing component costs. For instance, the LCD displays-which form a key element of the notebook-have seen steady decline in price points over the last two years. Says Devita Saraf, executive director, Zenith Computers, "In India, laptops represent a minuscule percentage of the total desktop space. India being a price-sensitive market, cost is certainly a factor-as far as mass adoption is concerned. In terms of [performance] low-cost offerings won't be as fast as Centrino-based notebooks, but they are fast enough to run the latest applications. These laptops are sold to a first-time laptop user as a desktop replacement, who may not need Wi-fi or WiMax yet."

But, any buying decision of notebooks should be made after reviewing multiple brands and the kind of configurations they offer.

Vendor Strategies
Growth in the notebook market looks extremely promising and this will continue. While desktops are still attractive to the consumer and enterprise markets as they offer great value for money, one can expect the notebook popularity trend to continue because of the mobility factor and falling prices. Says Neeraj Sharma of Lenovo, "Desktops are getting more affordable nowadays, with enriched features and performance capabilities and they have good demand in all segments. They offer a different proposition as compared to notebooks and will continue to have demand in the market. Desktops have an established presence in the market; it will take some time for the notebooks to exceed the share of desktops."

“Notebooks to be equipped with innovative features that enhance personal life and increase business productivity”  Neeraj Sharma, MD, South Asia, Lenovo  “Low cost laptops are sold to a first-time laptop user as a desktop replacement, who may not need Wi-fi or WiMax yet”  Devita Saraf, executive director, Zenith Computers

As part of an intensive initiative to increase notebook adoption among the SMB and SOHO users, Lenovo is positioning its ThinkPad R50e series at upwards of Rs 42,490. This is a Centrino-based machine introduced into the Indian market as part of Lenovo's strategy to build presence in the SME segment.

Though many attribute the surge in notebook sales to pricing, there has been an equally aggressive pitch by the manufacturers to position different notebooks according to the profile of individual buyers. There is still ample scope for growth. Till date, vendors have made the right moves in mapping the consumer buying patterns. Says S Rajendran, GM, Consumer Products Group, Acer India, "The availability and affordability of notebooks is on the rise. However, the third most crucial factor, applicability, will be key during the coming year. Acer was the first to launch the notebooks at Rs 28,499 (TravelMate 2355NXC model). Now we have the wireless LAN model at sub Rs 30,000 in the TravelMate 2312." For vendors like Acer, the low-cost notebook sales occupy a significant slice.

Moving forward, last five months have demonstrated the Indian market's liking towards notebooks. But vendors need to convince the consumers that the machines are worth buying. Says Sharma, "The low-cost notebooks need to have adequate hardware configuration and be bundled with useful technologies that enable the user to effectively run the most-needed applications such as email, antivirus, word processing, Internet browsing, and multimedia. In short, they also need to be equipped with innovative features that enhance personal life and increase business productivity."

In the end, before buying a low-cost notebook the users have to factor in various parameters and take the plunge only with a lot of care. Here, the emphasis has to be more on value for money, rather than by taking home a machine that costs less because it is less functional.

Shrikanth G in Chennai

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