HP to sell non-branded PCs to local assemblers in India

In a bid to get a share of the growing non-branded PCs market worldwide, Hewlett-Packard Co. (HP) is kicking off a new initiative in India, planning to sell unbranded PC kits to local assemblers.

The company has called the program Impact (International Modular Premium Assembled Component Technology), and is running a pilot of this program in some parts of India in association with Redington (India) Limited, a Chennai-based distributor of information technology products.

The pilot in India is the first to be done worldwide under the Impact program, according to Shuchi Sarkar, a spokeswoman in India for HP’s Personal Systems Group (PSG).

Mom-and-Pop operations assembling PCs account for the majority of PC sales in India. In the second quarter of 2003, for example, close to 70 percent of the PC market went to these assemblers, according to research firm IDC in Framingham.

Assemblers typically have an edge over branded PC vendors because of their faster customer service, the large number of configurations offered and their basement prices, according to analysts. “Based on our local research findings, strong demand comes from first-time users who want an inexpensive entry into the digital age,” said Ravi Swaminathan, vice president of HP’s PSG in India, who added that a large number of unbranded PC customers have indicated that they value a branded product’s reliability but at the same time want custom configured PCs that come with local support, and fast service, delivered at competitive prices.

HP will supply local assemblers with a basic PC configuration, consisting of a chassis, motherboard, floppy disk drive, power supply, keyboard and mouse. The assemblers can then customize the PCs for specific customer requirements using optional PC components from HP including memory, hard disk drives, CRT (cathode ray tube) monitors, CD-ROM and CD-RW (CD-rewritable) drives and CD-RW/DVD combos.

A large number of local companies currently sell kits to assemblers. Intel Corp. was one of the first multinationals to use the assembler channel to push their latest products and technologies into markets that the branded PCs do not address, when it introduced the Genuine Intel Dealer (GID) program in the 1990s. The GID program gives the assembler access to the latest Intel technology as well as the Intel stamp of legitimacy.