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HCL Infosystems On Top

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DQC Bureau
New Update

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.

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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.

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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.

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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.

sylvesterl@cmil.com

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