“We are going against the market tide by pushing wired products over wireless and I know this is a big gamble”

Kerman Rana knows the channel industry like the back of his palm, which is
not surprising, considering he started his career with Godrej Boyce. This is why
he can understand what the channel wants and is thinking of ways to offer these
deliverables to them in a mutually beneficial manner

What are your plans for the Indian market?

We have several products that we want to bring into the Indian market in a big
way. We have plans to introduce at least 10 new products in the country. We have
started talking to some leading cable and telecom service providers for bundling
our digital entertainment device, EVA. With this product, you can enjoy digital
videos, photos and music on your home entertainment system or TV. The device can
seamlessly access thousands of digital files and applications from your computer
for viewing and listening in the comfort of your family room.

We have also got a Skype phone, which unlike our competitors, does not need
to be hooked to any network. It works wirelessly and is priced at around Rs
18,000.

Kerman Rana Director-Sales, Netgear India

There is a dual mode cordless phone with Skype where customers can make
international calls, virtually free of cost. This handset can be plugged on an
Ethernet port or even a PSTN wall jack.

There is a telephone adapter as well, which can deliver the capabilities of a
cable modem and two-port voice telephone adapter, with one Ethernet port and one
plug-and-play USB 1.1 port for data connectivity. Customers can enjoy the
broadest spectrum of multi-media, including IP telephony, instant high-speed web
access, file sharing, multi-media conferencing, video streaming, interactive
gaming, and MP3 downloading.

These are just some of  the products that we will be popularizing in the
Indian market.

Does this also signal your shift from a networking company to more of a
lifestyle device company?

You could say that. We have to accept the fact that today voice, video and
data are converging and the devices, which carry these packets, are converging
as well. It would be foolhardy to stick to just routers and switches and ignore
this growing market. And most importantly we have all these products in our
kitty, so we might as well work at making them popular. In India, we see more
potential for such products, because the masses are keen to buy the lifestyle
devices they see on TV.

Most lifestyle products are typically high priced, which is why their
adoption is not as high. How will you deal with this?

We have a very simple strategy to combat this perception. We will make a lot
of noise about the high-end products but will push low-end options instead.

What do you mean?

What we will do is talk about the technology and how it will benefit users.
And once we get the customers hooked and if they are not comfortable with the
price, we will offer them the lower-end products within each category. That way
the customer will get the products, like say a Skype phone, without the frills
of the higher-end versions.

Aren't you betting heavily on pricing to help you succeed in the business?


In a way we are. But then again that is what business is all about. Netgear
does not believe in being rigid to pricing for the sake of principles, losing
business in the bargain. We are here to make money and if our customers want us
to offer them better pricing, then we will very much listen to them.

Last year, Netgear was focused on wireless. Are you shifting focus from
it?

Yes. Currently our wireless products bring in 70 percent of our networking
business. I feel that we are overly dependent on it. Therefore, I am consciously
making an attempt to bring the ratio of wired and wireless to 50:50 in the next
couple of years.

But would you not be going against the market trend that is largely
forging into wireless?

I know that, and also am aware that this is a huge risk. But I am not saying
that I will reduce the quantum of the wireless business. That part of the
business will grow organically as more customers are going wireless. However, I
think there is a huge wired market, which is largely untapped. And over the next
couple of years, we are going to target it aggressively.

Also, we have got very good mindshare in the wireless business. We now want
to piggyback on this success to push the wired products, especially in the layer
2 and layer 3 categories.

For your wireless products you have been working with the network
integrators. But for wired products you need a good logistics partner. Does this
mean you will revamp your current distribution set-up?

As of now, we are happy with the work that our distributors Rashi
Peripherals and Cyberstar have been doing. But maybe we might need to bring in
another distributor on board who had a larger footprint. This is just a thought
and we have to consider it yet.

What about your channel network?

Netgear has over 200 channel partners and we are pretty much content with them.
These are not the retailers, but are people for whom networking is the core
business. We have a very simple policy when it comes to aligning ourselves with
the channel. Rather than work entirely through the distributor, we liaison with
the people who buy from the distributors. That way we are interacting with those
people who are the final interface to the customers.

What was Netgear's growth last fiscal?

We had a 30 percent growth last fiscal and are aiming to grow at this rate
this year as well.

How do you propose to do this?

We increased our manpower last year and today we are a team of six people.
Soon we will take this up to 16 people, so that we have one person for almost
every state. We also have a toll free number for post-sales support and our
engineers fly down to wherever the problems get escalated. This way our support
infrastructure is well in place.

We will focus a lot on switches in the product category. And in customer
verticals, we will target the SMB market, which is a very price conscious one.

VINITA BHATIA