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Whither Assembler Market?

http://www.channeltimes.com/story/whither-assembler-market/

The Indian PC market, according to a recent IDC report, recorded a 30 percent growth in fiscal 2005-06 over the previous year, exceeding the 4.6-million mark in unit terms. However, the assembled PC market has taken a hit for the worse, both in terms of market share as well as total units sold. Sales went down to 41 percent from 53 percent in FY ‘04. A MAIT-IMRB report has pegged the share of the assembled PC market at 34 percent of the PC sales for the first half of FY ‘06.

The branded PC manufacturers have been slowly but steadily establishing themselves as the preferred choice. Also, the price differential between the branded and assembled PCs has reached almost negligible levels. Even the customer preference has turned to things branded. So, is this the end of the road for the unbranded assembler?

Certainly not. Worldwide trends indicate otherwise. In most developed nations, assembled PCs account for anywhere from 20 percent to25 percent of the total PC market. While this may not appear impressive, we must bear in mind that the Indian IT market is a growing market - with more than 90 percent of it yet to be tapped. But what measures can the assemblers take to benefit from this opportunity now that most of their earlier advantages have been neutralized?

Firstly, a large section of the populace still opt for a non-branded product provided they are offered quality at modest prices. The value proposition will seem even better if the assembler can offer some useful add-ons. This is one aspect that the branded manufacturers have played upon.

Another factor that has found favor for branded players is that they offer varied configurations, thereby providing the customer with an array of choice. Assemblers can add value by analyzing the actual requirements of the potential customer and offering a range of options with the likely benefits of each of them. Also, there are no serious compatibility issues where assemblers are concerned. This is one USP that assemblers can promote.

Service and support is another area the assemblers can turn to their advantage. Though manufacturers have been working on establishing a robust service network, much has been found wanting. Assemblers can leverage this gap between demand and supply for prompt service to garner market share. They should also look at the emerging segments like the whitebook market and carve a niche for themselves.

If the assemblers think out-of-the-box and leverage on these positives, they can still be a force to reckon with.

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