'It is important that we get the channel excited about the Concept PC II.'

With a masters in business, economics and social sciences, Gerhard Schiele

started his career with HP in 1995 as the senior product manager of HP’s small

business computing division in Grenoble, France and has since held various

marketing positions. He has been involved in the commercial desktop business

since November 1999 as the marketing manager for HP Far East, and is responsible

for marketing and driving the expansion of HP’s commercial desktop lines.

While he was here for the launch of second Concept PC, DQCI caught up with him

to get some insights. 

What is the Concept PC II?



Like the concept car, the Concept PC is just a concept. It is a machine that
will not be mass-produced rather it is turning R&D into reality. It is

technology in transformation. It is a step in the direction of making products

that provide value to the customer from revolutionary ideas. The concept PC I

was also never mass produced, but that could be said to be as the starting point

for the evolution that finally gave us the e-PC, now available in India too.

Likewise the Concept PC II is just the beginning of a new product. Only four of

these units have been produced and incidentally India is the first market in the

Asia-Pacific region, where the product is being showcased. It is also an

indication of our commitment to the Indian market.

Could you throw some more light on ‘technology in transformation’?



We at HP have learned over the past few years that business life and therefore
business needs are in transformation. And technology in transformation is

development to meet these constantly changing needs. It is an objective that we

fulfill with our heritage of innovation. It might be of interest to you that

last year we were awarded 5,000 patents, that is close to 20 a day. Technology

in transformation also builds on the co-operative creativity. The concept PC II

is the outcome of a joint effort where Intel, Agilent and Logitech have pooled

in resources. So technology in transformation as a philosophy is providing the

customers with what is useful and significant and focuses on what matters to

them the most.

What kind of customer studies went into the Concept PC?



Like the e-PC, the Concept PC II is primarily an outcome of assessing needs of
the business customer. We found that the customer needs even within a business

organization are different. So we segmented the business customer into three

broad categories, the end-user, the IT manager and the procurement guy. And we

found that the needs of each of these segments were vastly different.

We discovered that the end-user wants to regain desk space and wants the unit

to be silent and stylish. The PC has come to become incidental for him. For an

IT manager the prime needs were lowest total cost of ownership, best computing

and cost effective solutions and more control over the IT asset. While the

purchase manager’s sole consideration is to meet the IT and business needs at

the lowest cost.

Is that also the reason why we have seen the HP desktop offerings merge

into the professional and essential PC?



We realized that segmenting the market according to customer profile was not an
ideal solution. It was actually confusing the customer further. We therefore

segmented the PC market on the basis of customer needs and have introduced the

essential PC, which is proven technology at a cost-effective price and the other

is the professional PC for the professional user.

It also calls for a focus on the deliverables rather than the specifications.

It is a decision that takes us closer to the end-users to better address their

needs.

Does the Concept PC II fulfill all the needs of your identified segments?



Absolutely, it is a step in that direction. The basic difference is that the

Concept PC II separates the personal unit from the computing unit. The personal

unit therefore comprises of a single unit that contains an 18" LCD monitor,

a slim CD-RW, a webcam and speakers. It is Bluetooth and RF-enabled and has USB

ports to offer the end-user plug and play convenience. The keyboard and mouse,

both are cordless.

For the IT manager it offers control, for the computing unit need not

necessarily be kept alongside the personal unit, it can be kept at a remote

location. It also offers investment protection because it is the regular

architecture and not the thin client and is optimized for organizational

software loads. It also offers lowest cost of ownership, for the computing unit

is a sealed box and the USB ports are software lockable, making the PC

absolutely tamper proof.

But you said the Concept PC II would not be mass-produced?



Like I said this is the beginning of a journey. Like the Concept PC I, this

would not be mass-produced. However we will pick up ideas from here to

crystallize it into a product that fulfills the needs of our customers more

effectively. We took ideas from the concept PC I and transformed it into the

e-PC and hope to do something similar from the Concept PC II. Recognizing the

distinctive needs of the customer is important and it is the first step in the

learning process, fulfilling them with the technology that best addresses their

needs will be the next.

We launched the Concept PC I in November 2000 and the e-PC evolved out of it

and hit the shelves in April 2001. In India it was however launched in July

2001. So any development cycle takes six to nine months and that is the time

frame when we expect to get a commercially viable product out of the ideas from

Concept PC II.

Where do the channel partners fit in the entire scheme of things here?



HP is a channel-driven company and anything that we do, the channel is
definitely a part of it. And we also know that it is the channel that makes the

final sale for us. So it is important that we get the channel excited about the

Concept PC II. Our preliminary meetings with them have definitely had them

enthused.

And if the volumes of the e-PC are anything to go by, then let me tell you

that it commands a significant share of the overall PC volume. It has been well

accepted by the channel and the customers. Also because it is not just another

gray box.

Mohit Chhabra in New Delhi