When Free Means
The free laptop schemes announced by various state governments have evoked a mixed response from channel partners
According to a study by a leading research firm, Indian computer hardware industry is expected to grow to revenues of $62 bn by the year 2013. Earlier, Indian computer hardware importers used to buy the products from overseas computer hardware wholesale distributors, but now the scenario has changed. These days, computer hardware manufacturers in India are manufacturing computers, peripherals and accessories within the country itself. Only highly advanced parts are purchased from overseas computer hardware exporters. The free laptop schemes as announced by various state governments recently have brought tears into the eyes of those who depend only on the sale of laptops. On the other side, those who sell accessories comprise the happier lot.
Laptop has been the latest buzzword which attracts both votes and business.
Years before someone carrying a rectangle-shaped black bag across the chest used to be an odd-manout in the crowd. It was the time when the so called ‘mobile computer’ or ‘mini computer’ was new to the society. Few years down, it has become almost everyone’s favorite possession. This trend apart, lately, even governments and private bodies have started issuing free laptops for employees and students. This has prompted the channel community across the country to voice their opinion on the same.
THE ERA OF LAPTOPS
Various governments in the country are providing laptops either price-free or interest-free for students and teachers. With e-governance being one of the key strength areas of all the state governments, one of the prime steps taken by the governments were issuing laptops to employees as well as students in schools and colleges. On the other hand, private colleges, especially the B-schools in the country, started the trend of providing free laptops to all students enrolling in a given academic year. In today’s scenario, almost all the private B-schools and T-Schools give free laptops to their students. Corporate multinational companies (MNCs), needless to say, ‘adorn’ their employees with a laptop.
FREE LAPTOP SCHEME BY VARIOUS STATE GOVERNMENTS
It has been more than a year since the All India Anna Dravida Munnetra Kazhagam (AIADMK) assumed office in Tamil Nadu. And keeping in tune with one of its election promises, the Jayalalitha government, through Electronics Corporation of Tamil Nadu (ELCOT), has been floating tenders and distributing free laptops for students in schools and colleges across the state. The Tamil Nadu government has also distributed a laptop, printer and a computer-training guide for all the Village Administrative Officers (VAOs). This means, with a total cost of around ` 22 crore and ` 49 lakh, the 7,787 VAOs in the state will have a laptop, a printer and a user guide. No wonder, the initiative has been welcomed by the locals, especially the young generation, in addition to a mixed response from the channel community. While few say that the move has proved to be a threat for them, some channel partners feel that the business has not been impacted since the laptops do not come with high-end configurations and have been distributed only to the education sector. The ruling Samajwadi Party in Uttar Pradesh had promised to give tablets or laptops to students clearing standard 10th/12th from the academic session 2011-12 onwards. For this,
` 2,800 crore had been provisioned to the UP budget. However, this scheme could well cost the exchequer almost ` 4,500 crore, if all of those passing classes 10th and 12th this year, approximately numbering over 2.8 mn and 1.9 mn respectively, avail of the benefit. This number will definitely rise next year, keeping in mind the increase in the number of students annually. Besides, this scheme would also act as an incentive for weaker students to score passing grades, thus pushing the number of successful students further. Although the government had announced that the eligible students would get the gadgets by the end of this calendar year, it is likely to get stretched to 2013 March. Unlike Tamil Nadu, in Goa, the laptop comes with highconfigurations and according to the partners, it does not boost the sale of the accessories.
WHAT THE CHANNEL PARTNERS THINK?
Mayank Babu Agarwal, CEO, Agarwal Networks, Allahabad, while speaking about the scheme from the UP government said, “I am not sure of the success rate of this scheme so as to think whether it will help in the business of accessories or services.” Speaking on the potential of the prospective business, he said, “Yes. There can be some growth in the business of accessories. However, according to the tender floated, vendors have to set up service centers in the locations they are dealing in, which may not be possible. Also, even if they appoint channel partners for that, the targets are too high, which cannot be achieved by the partners easily.” Mahesh R Kurup, CEO, Ozone Computers, refuses to think negative about the laptop schemes. He said, “This scheme turns people towards a digital lifestyle, as they cannot go back after getting accustomed to a life of gadgets. So, on a long-term basis, this will definitely help the business of the partners.” Speaking on the growth of the accessories business, Kurup said, “The sale of devices like pendrives, DVD writers and web cameras will definitely rise with free laptops pouring in, and the partners can invest in the accessories business.” Dhiren Mehta, president, Goa IT Business Association, says, “The accessories have no role to play with the free laptop scheme, as the laptops provided have the latest configurations like bluetooth and camera. However, if the sale of laptops increases generally, we can expect the sale of accessories, as they are given free with many major products. In Uttar Pradesh, partners are apprehensive about the possibility of their sales business going down, once the implementation of free laptops/tablets takes place. According to Ghaziabad based Rajeev Garg, owner of Adhar Computech, “The day government initiates the free distribution of laptops, our business will be badly hit. Already, our business sales are down by 45%, even when Diwali is around the corner. We do not think this free laptop scheme will enhance the sale of accessories. As we think most of the students will resale their laptops in the market, which will further hamper the pricing.”
WHAT DO THE VENDORS THINK?
Atha Ulla Khan, GM, Eagle Information Systems said, “The laptop market is growing everywhere and we are in the phase of appointing service partners across the country. Recently, we unveiled service centers in Rishikesh, Aligarh, and Agartala, and soon Vellore and Puducherry will have our service partners too. We aim to cover all the districts in the country.” He also added that the company has conducted several laptop training programs for the service engineers, and that they strongly believe in laptop service as the governments have started giving free laptops. “Soon there will be a revamped state-of-the-art website in place where information about our products, services, training dates and feedbacks will be updated every now and then,” he said further, adding that Exilient has accessories for all the major brands. Telling that Tamil Nadu is emerging as the laptop capital of the country, he added that not just the service engineers in an office but also the business owners themselves are interested in knowing about the laptop trade. P Suresh Khanted, CEO, SACO said, “A suitcase worth
` 4,000, which is used rarely, is maintained by investing around ` 300. Then, for a laptop, which is worth around ` 30,000 and is used throughout the year, customers must concentrate on its operational efficiency and looks. Maintenance of a laptop is like a small four-member family where the screen, top, keyboard, and mouse pad are the key areas to be taken care of for a long working life. Our saloon will groom laptops brought to us,” he said, adding further that SACO has a wide variety of products to ensure that the laptops look healthy and beautiful.
“The accessories have no role to play with the free laptop scheme, as the laptops provided have the latest configurations like bluetooth and camera”
president, Goa IT Business Association