Partners need to be early adopters in diversifying their product range

Vinay Shetty, country head, component business, ASUS (India)

How has been the growth of the laptops and desktops industry in the last one year?
It has grown at a steady rate over the past year at about 8-10%. The growth though lesser than mobile PC has been consistent. It is no secret that the Laptop industry is on a vertical growth and the Desktop (Assembled PC market) industry from 2012 has been stable to an extent of all brands putting their effort to do their best to keep the desktop audience interested.

What is the total market size of this industry in India? What are the growth drivers of laptops and desktop market in the country?
The current market size is about 1.7 million in a quarter. The growth drivers are from the emerging B, C & D class cities and towns where the growth is about 20%. The new segments where there will be growth and business are surely gaming and high end PCs for specialized usage like designers, animation, studios, VFX. Assemblers who can tap high end buyers by offering good high end hardware will be able to grow their profitability. After the rupee depreciation and hard drive crisis, we've noticed that mid and high end segment were not much affected and buyers in these segments are more value conscious and are willing to pay for quality products. The growth of IT in the commercial segment is likely to range between 10-12 percent and will be driven largely by virtualization, business applications, BI, storage solutions and cloud computing. The good news is that the SMB segment will grow faster than the rest of the industry, maybe by 15-20 percent.

Could you highlight some of the recent market trends in the laptops and desktops segment?
On the desktop side, consumers are now ready to pay a premium for gaming PCs. AIOs are witnessing a large potential market as they are great space saving solutions without the clutter of cables which many users prefer. Users are viewing AIOs as a midway solution between laptops and desktops as well as a unique style statement. Also, Windows 8 is taking the touch experience further and expanding the market for touch based devices, with AIOs being the desktop equivalents of this space.

What are the technological trends that you have observed in this segment lately?
The new segments where there will be growth and business are surely gaming and high-end PCs for specialized usage like designers, animation, studios, VFX. Assemblers who can tap high end buyers by offering good high end hardware will be able to grow their profitability. After the rupee depreciation and hard drive crisis, we've noticed that mid and high end segment were not much affected and buyers in these segments are more value conscious and are willing to pay for quality products. Also, there is now an increase in the graphics cards attach ratio in the desktop segment as compared to earlier. For our business we will be focusing on the mid and high end segment in desktops in India.

 

What is the market share of your company in this segment? Also, what has been your contribution as a vendor towards this growth?
We've just entered desktop segment a year back and our primary focus is on the mid-and-high end segment where there is still scope for quality performance oriented products. Our market share is not significant so far.
What are the new solutions sought out in this segment?
There is an increasing demand for PoS solutions and thin clients.

What all schemes/programs do you have for the partners dealing in this space?
We announce programs on a quarterly basis and
work on bundle offers with most of our desktops.
In the past we've given silver coins, UPS bundles, speaker bundles and will be soon announcing free gaming headphones bundle with our gaming desktops.

Has the growth of tablets impacted the laptop/desktop space? Please explain.
Users still need a centralized Home / Family PC where the data is stored and secured. The users also are aware of the fact that an upgradability option is better in desktops than in mobility devices. Tablets are still mainly consumption devices than devices that are used for content/solutions production. Tablets have not affected desktop sales much since their usage scenarios do not overlap at all.

What are the GTM you have for the channel in the forthcoming fiscal?
In the last 2-3 years the channel market has faced competition from LFRs and more recently online retail and thus become even more competitive than before. It is very important for partners today to add value to their services and offer the customers the best products range and solutions to their customers. We have always relied on the strength and support of our channel partners and ensure their profitability and growth in business. In the current scenario, having a diversified product portfolio will help partners to grow business and profitability and Asus is a well established and trusted brand in the IT channel in India. We have 1st tier program of incentives in terms of slab structures and 2nd tier programs of smaller slabs and encouraging them to buy regularly in place. Some other offers in place are on bundle offers pen drive, backpacks and channel enablement program where we give cash rewards to top performing partners. With the market maturing, the high end segment is seeing a growth at a never before pace. This would be a right time for partners to create a niche for themselves in their local markets with regards to the high end products, which are both, profitable for business as well as help to develop an image in the market. Partners need to be early adopters in diversifying their product range for them to take benefit of the first mover advantage.

What so ever brand may be, the margins for channel partners are always very thin in the laptop and desktops? Why is this happening? Will this trend change?
On the contrary, margins are quite good for the desktop segment. The only time margins are low is when partners are focused on price-based selling more than value-based selling. We need to understand the difference between the two and work on providing value for our customers.

How is the trend of channel partners for selling laptops/desktops. Are they increasing or decreasing?
It is definitely increasing by the day since we're seeing that even component partners are now willing to do business for desktops and are willing to invest the resources required to tap into the new market.

B Swaminathan/(swaminathanb@cyberemedia.co.in)