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CDRW sales increase, margins take a beating

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DQC Bureau
New Update

CDRWs are selling like hot cakes in the market. Most partners

say that CDRW sales have increased in AMJ quarter by at least 15 percent as

compared to the JFM quarter. However, though the volumes sales have increased,

dealer margins have come under pressure with CDRWs becoming commodity products.

Says Kaushal Kandor, Product Manager, Neoteric Infomatique,

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"Till six months ago, dealers could earn margins of 10

to 12 percent in CDRWs. Now these margins have fallen to three to five

percent."

While

Tejas Sheth of Mumbai-based Zeta Technologies agrees that margins have dropped

from double to single digit figures, he reasons that dealers still stand to gain

in the bargain. "Earlier dealers were selling two units at a margin of Rs

100 each. Today they sell 10 units at a margin of Rs 30 each. So they still earn

more."

Amit Gupta of Rashi Peripherals points out that margins fall

when a device becomes a commodity product. "This is the market rule. When

the volumes increase, margins are bound to fall,"he justifies.

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Rashi Peripherals, a distributor for Sony’s CDRWs, is

selling 20,000 units per month currently, up from 15,000 units in June.

One of the reasons why sales have picked up is the dramatic

price drops over the past three months. Prices have dropped by almost 40 percent

and CDRWs which were available for Rs 8,000 in April are now sold for Rs 4,500.

Amit Gupta expects sales to increase by 20 percent in the JAS

quarter too. "Soon CDROMs will be phased out as customers start going in

for CDRWs. Already CDRWs are eating into the marketshare of CDROMs," he

says.

Gaurang Damania of Mumbai-based Compunics Information Systems

agrees with Amit. "The existing average price point of CDRWs at Rs 3,500 is

so affordable that it will soon replace the CDROMs." Compunics whixh was

selling only five units of CDRWs in AMJ, now sells 15 a month. Cyberciti, a

mumbai-based retail outlet, is currently selling eight to 10 units of CDRWs a

month. Till six months ago the same outlet was selling only two to three units.

VINITA BHATIA

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