Date:10/01/2004 URL: http://www.thehindu.com/2004/01/10/stories/2004011004131200.htm

National

Is an affordable PC possible now?

By Anand Parthasarathy

BANGALORE JAN. 9. Finally the Government has done something to make its pious mantra "IT for all by 2008" a little more meaningful — albeit for all the wrong, and patently self-serving political reasons. But the majority of ordinary Indians may waste little time in scrutinising motives.

Today many are asking: What do all those headlines of slashed excise duties and reduced customs tariffs mean for us? Can we now afford a personal computer for our home?

If an affordable "janatha" PC means a reasonably equipped multimedia machine priced below the "Lakshman rekha" of Rs. 10,000 this is not going to happen even after yesterday's key reductions: excise duty on IT hardware slashed from 16 per cent to 8 per cent and special additional duty (SAD) of 4 per cent abolished. But we are getting about half way there: Zenith Computers has already promised a multimedia PC for around Rs. 15,000 and spoke today of a general fall in its PC price range of 10 — 12 per cent.

Other Indian branded PC makers such as HCL and Wipro can be expected to match these prices, though HCL initially spoke conservatively, of a 6 to 7 per cent fall.

What does this mean in terms of PC configurations?

Performance compromises?

A budget home PC would still need at least 40 GB of hard disk, floppy and CD drives; 128 MB of RAM, a built-in modem and a 15-inch colour monitor — all driven by a Pentium 4 chip or its AMD equivalent.

Even after the tax reductions of Thursday's mini-budget are factored in, it is difficult to see how any manufacturer or assembler, branded or unbranded, can deliver this with an operating system for less than Rs 20,000. Anything cheaper will be making performance compromises: a Celeron chip instead of a Pentium or an Athlon; Linux instead of Windows.

It is easy to get worked up and say Linux is the way of the future, etc, but those who wax lyrical about Open Systems are not the ones taking loans or making precious provident fund withdrawals to get a PC for their families. These cautious buyers will look for a workable system which the world's majority uses — and if Microsoft is wise it will come up with a compellingly priced Indian version of Windows XP that will ride the wave of PC purchases the industry seems to expect in the coming weeks.

Distinctions vanish

The latest tax reductions have rendered fairly meaningless, the distinctions between branded and unbranded "desi" PCs on the one hand and between Indian and international brands on the other. Already many of the global brand PCs sold here — HP/Compaq, Samsung , LG and Acer, for instance, are substantially assembled in India and source their key sub-assemblies from the same competitive sources in Korea and Taiwan that the Indian PC brands as well as the 57 per cent-strong unbranded sector uses. So customers may soon look at specification and value for money rather than PC pedigree, since under the skin the machines are pretty much the same.

While the Government has tinkered with taxes this week, it is yet to do anything proactive to seriously boost PC penetration in the country — like specifying a national configuration, offering zero tax incentives at all sub-assembly stage and motivating multiple assemblers to compete healthily with their own versions. Something Thailand did with spectacular success last year. It involves government putting its money where its mouth is — and for that the patient Indian customer may have to wait a little longer.