The vagaries of busi ness are such that today’s winner is a tomorrow’s
loser. IDC India’s figures for hardware sales make this amply clear. HCL
Infosystems (HCLI) has toppled Compaq from the No 1 position in hardware sales
for the year 2001-02.
With a overall market share of 8.6 percent, HCLI has pushed Compaq to the
second position. IDC figures also indicate that HCLI has shown a growth of 27
percent during 2001-02 in PC sales which is a commendable achievement in bad
market conditions.
HCL shipped 1,51,104 PCs during 2001-02 against previous year’s figure of
1,18,902 PCs. These figures include only the in-house brands of HCLI and not the
systems from Acer, Toshiba and HP sold by it.
The long uncertainty that marred the merger of HP with Compaq has certainly
worked to the advantage of HCLI. The other factor that helped HCLI is the
country-wide service network that the company has been able to build up over the
years.
This is a clear signal for the new HP to quickly get its act together to
ensure that its sales pick up in the current year. IDC would begin to combine
the market shares of Compaq and HP for hardware sales from the second quarter of
the financial year 2002-03 since the new HP came into existence in the middle of
the first quarter. The combined market share should put the new HP at the top of
the table for PC sales from the market share point of view.
But this should bring no solace to the company because figures would only
speak for the combined efforts of erstwhile HP and Compaq, and not of the new HP
in the marketplace. Channel partners of HP and Compaq are still at sea even
though the new entity says that it is "business as usual" till
September this year.
In the meanwhile, HCLI would use every trick in the trade to beat even the
combined market share of HP and Compaq. Its focused divisions to carry out sales
in separate segments including banking, SOHO, government and corporates should
work to its advantage.
This only means that the new HP has a lot of catching up to do to maintain
its leadership position. It needs to come out with a channel policy at the
earliest. It has no time to waste because the HCLIs and Wipros of the world and
assemblers too are out in the market to grab every percentage point of the
marketshare.
The rise in assemblers’ market share, as shown by IDC figures, from 64.9
percent to 65.6 percent in the first quarter of the calendar year 2002, clearly
indicates that the Indian market continues to be a highly price-conscious one.
HCLI has put in every effort to break the price barrier by coming out with P-4
machines with a price tag of less than Rs 40,000.
The price front is one area where the new HP will have to work hard and meet
the demands of the marketplace. While, HCLI and others of its ilk will play on
the advantages of lower overheads and local infrastructure, and hence, lower
prices, the new HP and other MNCs would harp on quality and ask for brand
premium. Assemblers would be a thorn in the flesh of both these class of
players, with an intense war for market share continuing in the coming months
and years.