Motherboards In A Volatile Market

Motherboard, the very base on which a computer is built, does not enjoy the kind of attention that is bestowed on the processor. Does a relative lack of mindspace, decrease its importance? Not really.

With the average Indian consumer now harping more on performance and quality and less on price, it is common knowledge that anything and everything cannot be pushed down an Indian consumer's throat.

With the average Indian consumer becoming more and more informed, his focus is moving towards performance. This is one of the reasons why more and more branded PCs are being sold today.

As a result, systems integrators are facing queries and issues that have never been faced before. Most system integrators allege that the importers owe their allegiance to the product that contributes maximum to their bottomline. These importers, they further allege do not have the required infrastructure and knowledge to provide the technical support that may be needed.

Apart from that, no surety of technical support and consistency in supply is also missing. The market is therefore being fed with boards that do not spell quality and consistency.

On the other hand, branded motherboards seem to be doing well. "We have experienced a motherboard failure rate of less than one percent in the last year," says Sudip Narula, Director, VM Enterprises, the distributor for Gateway in India. This reinforces the performance capability of a branded motherboard.

With Intel enjoying a big share in the branded PC segment, other vendors look at systems integrators to push their sales. But this will be possible only if system integrators can place their trust in vendors.

Motherboard vendors are setting up service infrastructures and some of them are even planning to set up manufacturing capacities in India. Commitment to service and support seems to be the mantra for survival. Says AK Sapru, CEO, Jorjy International, "Appointment of channel partners depends on their ability to provide product support".

Few Indian companies are also in the race to feed the motherboard market but with a clear focus on quality. Indian motherboards by no chance seem to under-perform. "We ensure that our quality is at par with international standards" remarks Manish Agrawal, Director (Operations), Vintron Informatics Limited, on the very mention of quality.

The importance of service comes to the forefront with respect to motherboards because a host of compatibility issues plague this industry. Gone are the days when motherboards came with a zero warranty period. Manufacturers and suppliers today seem to vie with one another to promise unparalleled warranty support.

With foreign manufacturers operating in India through their distributors claiming their service is the best, Indian counterparts too are blowing their own trumpet. But for a systems integrator, service is a different game altogether. Systems integrators claim that their comfort levels are established only after they have assessed the replacement and support systems of the vendor.

The support that is mainly looked forward to is in terms of knowledge updation on changing technology. "The quality of service may not become obvious at the very first instance," feels Manish of Vintron. Having invested upward of Rs 10 crore on infrastructure, Vintron is closely following the trend of greater handholding of integrators.

An Indian company may be able to provide world class quality, but then is the customer satisfied at the pace with which Indian companies are able to deliver world class products vis-à-vis foreign brands. "We know that the Indian customer is very demanding" says Manish and justifies his company's focus on design.

Working closely with chipset manufacturers like Intel gives Indian companies an insight into fast-paced technological changes. As a result, adoption to newer technologies and adjustments becomes faster.

The price seesaw

The prices in the motherboard market are very dynamic. Changes can take place every day and sometimes every hour. However, the supply situation for the Indian vendor is not that dynamic, so this keeps him on his toes always.

But a factor that cannot be discounted is that prices are essentially market driven. Knowing this very well, Indian vendors also make price adjustments on a regular interval. But what they don't want to happen is the market price hitting a level that is lower than the cost of production. While Manish does not deny such occurrences, he is quick to add that such happenings are usually temporary.

Thus, volatility has taught Indian manufacturers to live with the ups and downs of the market. It has taught Indian vendors to be on their toes and keep overheads at the minimal. Leaner organizations and meaner market forces are giving Indian vendors the capability to produce motherboards at prices that are internationally competitive. Can then foreign markets offer opportunities for exports? Replying in the affirmative, says Manish, "We are indeed looking at exports."

The motherboard market in Delhi is tormented by so many forces that a clear picture is difficult to come by. But the spirit is upbeat because both Indian and foreign vendors are eyeing volumes. And volumes are achievable if there is a clear focus on channels. Development and the consequent strengthening of distribution channel is a major task ahead for all motherboard manufacturers.