Patriot mulls subsidized pricing for India

Mumbai

July 11th, 2007

Patriot Memory Inc, which is marking its entry into the Indian market, is
considering coming out with a special pricing only for India to help it gain a
foothold in the market. Having traditionally sold in the US markets for twenty
years, the company opened its Asian office in Taiwan just two years ago. Since
then this region has seen a high traction in terms of sales.

Now, looking at the potential of the Indian market, Patriot will soon enter
the country with the help of a channel network. To help its positioning in the
market, it is also planning to come out with a strategic pricing for the region,
under guidance from its channel.

Talking about its channel network, Patriot will appoint distributors who will
not focus on certain geographies, but on select verticals. "We believe that
one single distributor too will not be able to reach out to many channel
partners, especially those in the smaller cities," said Paul Jones, CEO,
Patriot Memory.

So the company will have regional distributors who will work with the retail
channel, the systems integration channel, the reseller channel, the upgrade
customers and so on. "This is the only way we can be profitable and reach
out to a wider set of customers. Also, since each of the distributors will be
targeted on certain verticals, there will not be too much channel conflict,
which is precisely what we want," Jones added.

He is confident that this strategy will work. This is the same strategy that
Patriot has adopted in other countries and it has paid it rich dividends, as per
the company. "Memory is a commodity and therefore the key to succeed in
this business is to move large volumes. This is why we need to reach out to as
many channel as is possible so that they in turn can take our products to the
end customers," Jones noted. "Also, price fluctuations in the memory
market are very rampant. We can decide what the profits margins for a particular
customer vertical should be and then in case of price changes, the channel has
the leeway to work on the margin bandwidth to ensure that they don't suffer any
losses."

Patriot will initially be present in India through its partners and will work
on having a robust post-support network in place. Over time, the company will
also establish its Indian office.

According to estimates, the market for DRAM is $30 billion while Flash cards
is expected to be around $20 billion globally. While Patriot will continue to
push its DRAM memories, it will increase its focus on the Flash memories and USB
drives. The sales of these two products have been incrementally going up at a
steady pace over the past several years globally. But more so in India where the
telecom and mobility market is moving at a steady pace.

Jones is unfazed by the presence of gray and the fake products in India. He
felt that fake manufacturers could make products identical to the ones Patriot
designs. But they will not find it viable to include all the technology that
OEMs integrate in the products.

Talking about the parallel import channel, Jones noted that it is still in
existence is because of the price differential in the original and the gray
products. This is precisely why the company will be coming out with an India
specific pricing, which will make it lucrative to buy genuine products from
authorized channels.