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5 minutes reading time (915 words)

Whither India Netbooks – Channel Perceptions

In India the Netbooks were launched about 16-18 months ago, however, growth in terms of sales has been seen only in the last couple of months. One of the major reasons for the growth has been product promotions by the respective vendors by introducing a low-cost “cousin” of the notebook during the economic crisis period. Though the ratio of notebooks to Netbooks remains low the channels see the growth as a positive trend. Netbook volumes are being driven by businesses.

While the Netbook market is still in its nascent phase in India, the channels in India feel that there is a latent market opportunity within three different segments driven by either usage or price-points.

First Segment: Mobile Segment
Initially the netbooks are being purchased by “new-age customers who have a desire to stay connected at all times”. These are:

  • Students,

  • Frequent travelers,

  • Sales and marketing professionals


The market is seeing its usage in the corporate segment as businesses “are placing orders for Netbooks for those employees who were non-users of computing products earlier or for employees who are traveling. We are starting to see orders in batches of 10 netbooks to 25 netbooks for internal teams within SMBs and other businesses”. The low-cost is not the only factor for this segment driving sales, but portability, small size, internet connectivity and smooth functioning of Office applications are other reasons. The channel partners feel that netbooks successfully address an entry level price-point for the segment.

Second Segment: Second PC Household Segment
There are essentially two different types of consumer segments that are either purchasing netbooks or are currently investigating purchasing netbooks. The first type consists of students and children within households:

“Netbooks are essentially being purchased as a second PC by consumers in India. Netbooks may never become the choice for most Indian consumers, who are yet to buy their first PC, however parents are buying Netbooks for their younger children/toddlers for their educational needs or in lieu of video gaming products. This shift from notebook to Netbook preference is due reasonable price, low risk and easy maintenance.”

They see its usefulness in day to day activities like simple office applications or for music, entertainment, instant connectivity to social networking websites, video chatting, video streaming, E-mailing.

The second type of consumer segment is also buying Netbook as a second PC but who require and have a pressing need to segregate work units such as specifically for accounting or for side-business such as real estate or life insurance. They view that the basic applications for which a Netbook are web based applications, simple office applications like Word, Excel and PowerPoint presentations. They see its usefulness in day to day activities like financial transactions and E-mailing.

Third Segment: “White Goods” Segment
Currently a Netbook is “tagged” as a computer/computing device and its price point is in the INR15,000 – INR20,000 (US$330 – US$450) range. Once the price point comes below INR10,000 (US$220) the market will likely explode. And that time the vendors should sell Netbooks as “white good gadget” and not as a computer. It will establish itself as an essential item to purchase by females within households, a “must-have” gadget/device/appliance. “We have seen many women of the household buying a Netbook but hesitatingly”.

Why hesitatingly? Channels feel that Intel should bring in some concrete marketing and promotional activities to create awareness for its Atom Processor as many consumers are more processor conscious. If consumers are buying a PC it is because they have the money to buy one and therefore they try to go for a notebook. This trend has been witnessed in the non-metro cities like Nashik, Cochin, Chandigarh, Lucknow, Allahabad , Ranchi to name a few where many consumers are buying their first PCs. With no space constraints and no travel needs, the consumers in Tier 3 and beyond cities follow the mantra of “Bigger the Better”.

Consumers buy cell phones based on price, plan and usage requirements. They do not know and do not care about the processor inside a cell phone. Netbooks although fitting a space between mobile phones and notebooks due to its inherent initial marketing is forcing the consumer to inquire about processors. “It is perceived as an advanced version of a PDA and a far better alternative to high end mobiles”. Channels themselves are selling PCs based on type of processor. Many channels in India believe that either Intel should create more awareness of its processor or take the discussion of processor completely out of the equation and lower the price points.

All major vendors such as Dell, HP, Acer, HCL and Lenovo have launched their Netbook models in India. Brands like MSI, Simmtronics Asus, Benq, Samsung, LG and Sony also have a presence in the Indian market. Many channel partners are of the opinion that if the respective vendors bring the price somewhere below INR10,000 with restructured margins there is no second thought that the demand for Netbooks will grow by leaps and bounds as it aims to provide mobility solution for users including traveling salesmen, housewives, teenagers and consumers who require a stylish internet-surfing device. Then it would not be used as a computing product but also be able to penetrate the market as a “white good gadget” fulfilling needs like video streaming, audio communication & entertainment and gaming. It would clearly become a single product substituting the mobile, MP3, MP4 players, DVD Players and PSP consoles.

A planned intelligent marketing strategy for netbooks is required.

Gitika Bajaj
Techaisle
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