MOTHERBOARDS: Brands Jostle For Attention

The race for marketshare in the motherboard business is heating up with over 20 brands–local as well as MNC–trying to grab the attention of buyers. Local manufacturers are trying to beat competition by playing on price and after-sales support. MNCs, on the other hand, are refraining from the volume game in order to protect their brands which are comparatively
high-priced.

MERCURY IS RISING

Kobian India's Mercury motherboard is the fastest selling in the market with 35% marketshare. Others like Intel, Asus, Digilink-Gigabyte, HIS, Vintron, Microtek and Vesta enjoy an almost equal share of the remaining 65%.

"Our products stand very well on price and performance aspects," says Sunil Sharma, MD, Kobian adding, "Besides, we
have a state-of-the-art local manufacturing facility, superior logistics and support."

Brands like Intel and Asus, despite their focus on the niche market with high-quality and premium-priced motherboards, have surprisingly picked up volumes. "We are not a volume player in the motherboard market business. However, our motherboard business has grown 100% in FY 2002-03 over FY 2001-02," says Amar Babu, GM—Channels (South Asia), Intel Asia Electronics Inc.

QUALITY AT A PREMIUM

When it comes to quality, Asus takes a lead worldwide. In India too, it focuses on offerings for the quality-conscious customer segment. "Asus delivers the best product, though at a premium. That is the reason every one out of six motherboards in the world is from Asus," says Pankaj Pamani, Asus PR Manager. 

But now the company is putting in efforts to compete on the volume game as well by introducing low-price models for the country. Today, there are Asus motherboards available at a minimum price of Rs 3,500 (exclusive of taxes).

In the western region, especially in Mumbai, local brand HIS from Maxtone has evoked good response from PC assemblers.

"It is the quality offering at a decent price that is helping HIS brand," says Champakraj Gurjar, MD, Maxtone who has taken over the HIS brand from a Hong Kong-based company. 

Gigabyte, after its association with D-Link, also claims to have touched a marketshare of around 20% in the country. "One of the reasons for our success is consistency in supply. Local manufacturing in our state-of-the-art facility in Goa has proved to be a big advantage," says Rajan Sharma, Product Manager - Motherboard, D-Link India.

Ingram Micro, with its Vesta brand, is strong in the southern region. Up north, Vintron and Microtek reportedly enjoy decent acceptance levels.

“We did 1,67,640 motherboards during last fiscal and we are expecting around 15-20% growth in the current market condition,” says Manish
Agrawal, Director—Marketing, Vintron Informatics Ltd.

Though Vintron continues to maintain its stature as a reputed manufacturer, other brands like Jetway, Mora, Perx, Azza and Tiga are trying to create a noticeable presence by competing on the price front. 

LOCAL VS MNC

A motherboard is the core of any system since all other components function around it. Users have begun to give a lot of importance to this fact and quality is slowly becoming a prime criteria for purchase. But there is no dearth of customers who purely go by price. This has prompted local motherboard manufacturers to raise their focus on quality and price. 

“Indian motherboards have excellent performance and are at par with international standards," says MA Sathya Prasad, MD, Vanpac Systems, a
Bangalore-based SI.

However, some partners are not very convinced about the quality of Indian boards. "Don't use Indian boards," remarks Mumbai-based SI, Samapath Iyengar of Sam7. "There are quality and replacement issues in local brands. Besides, we don't know whether they will be in business during the warranty period," he adds.

Except for Intel and Asus, very few vendors provide three-year warranty. All others are providing either two-year or one-year warranty. Though the latest trend is to provide an additional year of warranty at a nominal cost.

SUPPORT FOR SURVIVAL

Commitment to service and support seems to be the mantra for survival. Motherboard vendors are setting up service infrastructures and some of them are even planning to set up manufacturing capacities in India. 

In the case of Asus, services are offered through its distributors. Intel, boasting of a low failure rate, takes care of service issues through its replacement center in
Chennai.

Kobian handles warranty and support directly. "We have service setup in 10 locations. We work on turn around time of three working days. We provide online support through
www.kobiankare.com and through toll free number 1600445464," says Sunil Sharma of
Kobian.

D-Link offers support through 20 distributors and its own RMA centers at Goa, Bangalore, Delhi and Mumbai. 

Ingram offers warranty support for its Vesta brand at 23 locations across the country. "We were the first to offer across-the-counter warranty on motherboards in India. We have strengthened our service support during last year and currently channels get an instant replacement in case of manufacturing defects," says an Ingram official.

Xserve has established a web-based RMA system for its channel partners, wherein RMA number is allocated online. Service is provided on a swap basis from several RMA locations in India. The company is planning to have additional service locations. Xserve also has its own technical support and central repair center in
Bangalore.

According to Vintron, its 72 distributors and 2,137 resellers backed by 12 branch offices, are geared up to provide warranty support.

PROMOTIONAL SCHEMES

Bundling offers and free trips on volume buying are regular offerings from most motherboard vendors. "Schemes are an ongoing feature, which play an important role in achieving volumes," says Champakraj. His company Maxtone is offering free trips to Taipei for all those partners who pick 350 HIS motherboard each for three months consequently.

A lot of emphasis is also being given on web-based marketing schemes for the channel. D-Link has been regular with various scratch card schemes, free trips, back-end incentives and lucky draws for its partners.

However, brands like Asus and Intel desist from introducing grand schemes. Both these companies have been very open about not concentrating on volume game. 

SHORTAGES? NOT A CHANCE

Shortages in CPU, memory, hard disk drives are common occurances. But surprisingly, for several years, shortage has not been associated with motherboards. The most likely reason is the presence of many players which ensures a steady flow of boards. Also with local manufacturing facilities available, shortages rarely emerge as an issue.

"Local manufacturing in our state-of-art facility in Goa is a big advantage for us to maintain consistency in supply," says Prabodh Vyas, Director-Sales, D-Link India. Kobian too boasts about its excellent supply chain facility. "We can supply to any part of India within three days," says Sunil.

Ingram Micro too proudly claims to be consistent in availability in the market.

In fact, unlike any other product category, vendors here have been very prompt in launching newer versions of boards to support latest processors announced by Intel and AMD.

EDGING OUT COMPETITION

Ask about quality and you get only one cliched reply from all motherboard vendors: 'Ours is the best'. And while saying this, every local motherboard maker ensures that they have actually made an attempt at providing international standards. 

While there are SIs who are satisfied with the improving quality in local brands, other quality-conscious SIs prefer not to buy local brands. They swear by Intel and Asus as the best in quality. 

Sathya Prasad of Bangalore-based Vanpac Systems says, "Branded motherboards seem to be doing well with failure rates decreasing to less than 1% in the last year. The focus is shifting from price to performance.” He adds that customers are emphatic about service as well.

Concerned about quality-conscious customers, Sampath of Sam7 alleges, "Local manufacturers are only interested in offering schemes giving away free mice and other goodies which excites our reseller community. They (resellers) don't care whether they are selling soap or motherboards. Vendors are now promising three years warranty. I hope they can live up to their promise."

However, Vintron's Manish begs to differ. “The products manufactured here are at par with international standards,” says he.

According to him, Vintron has a price advantage over others because of the in-house assembly and long-term relationships with the suppliers. “Our policy of maximizing returns for channel and offering value-for-money products to end-user ensures that there is a price advantage on our product line,” adds Manish.

TECH TRENDS

The latest to talk about in motherboards is the 800 FSB support–the so-called front side bus designed to support CPUs with 800 MHz FSB. Till few years back, very few partners used to bother about FSB while trading in motherboards.

Intel has closely worked with almost all the motherboard makers to incorporate this technology to support the newer Pentium 4s which will work on 800 MHz FSB. And almost all the motherboard makers have ensured that boards with 865 chipset are ready.

Meanwhile, XServe has announced something unique for AOpen motherboards citing enhanced over-clocking capability to support 800 MHz FSB. Due to the exclusive circuit design by AOpen, its 845GE/PE motherboard users can enjoy FSB 800.

"There is no need to modify the hardware or buy a motherboard of another version. Customers can simply update the latest BIOS version from our web site and use 800 MHz FSB CPU on their existing AOpen 845GE/PE motherboards," says Rahul Gupta, MD, XServe India.

Similarly, Asus has some unique features embedded in few of its motherboards like CrashFree BIOS 2. The BIOS auto-recovery function is now included in a bootable support CD. 

Asus boards has some features like CPU Parameter Recall in the BIOS, which automatically restores the CPU default setting for each parameter. Another feature is the MyLogo2 feature. Once can convert your favorite photo into a 256-color boot logo.

Serial ATA is another technology that is set to replace parallel ATA, as parallel ATA poses some serious limitations to the developers today, including a 5-volt signaling requirement, high pin count, and serious cabling headaches. Serial ATA offers backward compatibility with existing OS and drivers. Moreover, Serial ATA provides an even faster transfer rate of 150 Mbytes/second
Besides all the above technological development, there are some standard features that contemporary motherboards sport, like the USB 2.0, 8X AGP, onboard audio with six channels, high-end video graphics, and LAN.

EVIDENCE OF GROWTH

Despite fast changing technologies, there are enough signs of increasing business volumes in the motherboard business in the country. The market size for motherboard is almost the same as that of the PC market and according to industry analysts would grow by around 20% in FY 2003-04. And given this growth rate, players can easily look at a three million-unit opportunity. 

Of course, this might also result in more Taiwanese brands finding its way into the market here. The onus is now on local manufacturers to sustain their brands and fight the volume economics of Taiwanese imports by producing quality products and providing excellent support. A quality product would also mean scope for exports, which Kobian has already succeeded in.

At the same time a clear focus on the channels will help brands create a greater mindshare as well as
marketshare. 

NELSON JOHNY 

with inputs from SUNILA PAUL