HCL’s low-cost PC to revitalize distribution strategy

Thursday, November 10, 2005

HCL plans to market its new low-cost PC by partnering with major web portals for a piece of the “fortune at the bottom of the pyramid.”

After having launched its low-cost PC in the Indian market, HCL is looking forward to injecting new vigor to its existing distribution strategy to tap the huge market potential in the Indian region. With an aim to increase its distribution footprint in the country, the company is all set to work on a two-pronged strategy. As part of this, HCL would be working closely with popular Internet portals in order to market its affordable product and the company would also be strengthening its existing distribution network.

As HCL targets the broad-based market segment it would be strengthening its existing distribution network by different strategies

“The real market lies at the bottom of the pyramid. Unless PC penetration increases from the current level, Internet and broadband will not take off in the country. As we target the broad-based market segment, we would be strengthening our existing distribution network by different strategies. We have already started working by taking online orders from customers. Moving forward, this would be a part of our overall distribution strategy,” explained Ajai Chowdhry, Chairman and CEO, HCL Infosystems. Moving forward, the company would align itself with different online portals to channel its low-cost PC to more number of people and increase its distribution prowess. “As the demand of this product increases, we would be increasing the strength of our traditional distribution network as well,” he added. The new HCL Ezeebee Pride computer, unveiled by the Communications and IT Minister, Dayanidhi Maran, comes with a configuration of AMD x86 1.6 GHz processor, 128 MB RAM, 40 GB Hard Disk Drive and 52X CD ROM. It also has a 15″ color monitor and supports applications such as word processor, spreadsheet, presentations, e-mail and video conferencing.

HCL has priced the ready-to-use PC at Rs 9,990 with Linux software, and Rs 11,240 when bundled with Microsoft Windows XP Starter Edition. Initially, the company is making sure that the product is available at more than 1,000 dealer points spread all across the country. The company plans to increase its computer manufacturing capacity to one million units by the end of this year from the existing 600,000 units.

While the PC penetration in the country is a mere 15 per 1,000, the Government is looking forward to increasing this number to 65 per 1,000 by the end of 2008. Bringing down the PC costs to below Rs 10,000 is one way to make it more affordable to the huge population of the country. This is also likely to spur broadband and Internet penetration levels for the

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