Dell Raises the Stakes by Lowering Costs in India

Once again, you would have to sift through a mountain of emerging-market publications to find this week’s Nugget. The latest salvo in the battle to commercialize low-cost PCs was offered by Dell this week in India.

According to local sources, Dell is planning to launch a $240 (Rs 10,000) PC in India, the world’s second-most populous nation, followed later by worldwide distribution.

Consumer preferences identified in an upcoming report by Vital Wave Consulting suggest that Dell’s strategy in India is sound. Consumers in strategic growth markets prefer conventional, full-functioning PCs over limited-capability, low-cost machines.

Ten years ago in the United States, Dell capitalized on growing familiarity with PCs and widespread connectivity to sell directly to consumers via the Internet and call centers. However, this model will not work in India without some adjustments to local market dynamics. Dell will need to complement its low-cost machines with alternative business models. Vital Wave Consulting believes that Dell is headed in the right direction with a locally-built, low-cost but full-function consumer PC. They now need to take the extra step and offer financing opportunities, new go-to-market strategies, and applications that address local needs. With the right solutions and creative new business models, Dell could see the same meteoric growth in India that it enjoyed in the US a decade ago.

Also in the news:

• Red Hat makes plans for low-cost Linux global OS
• Sun believes Java will enable ultra-cheap mobile phones
• Mobile phones as money exchange tool gain momentum