Wednesday, January 7, 2009

An Opportunity for Desktop Innovators

Tech industry analysts, bloggers and reporters had much to say about the fast-growing (and steadily evolving) notebook market in 2008, but Indian business weekly Express Computer capped the year with a dose of balance and perspective. They pointed out that, despite the remarkable rise in notebook sales in India, desktop PCs have maintained steady increases and retain a 3:1 market advantage over their portable counterparts. In India, the 6-million-unit desktop market will grow 30% to 8 million units in the next 3 years, according to IDC.

Notebooks have made headlines and gained market share through a rapid rate of innovation and good marketing. However, analysts of the Indian market (a pace-setter for many other developing countries) note that desktops are still the preferred form factor in many geographies and segments, including second- and third-tier cities, and the SMB, government and education verticals. Desktops have the advantages of familiarity, durability, security (from loss or theft), serviceability and lower prices for better performance.

With so much room for growth in India, there is a lamentable lack of innovation in the desktop space. Despite efforts by Dell and Zenith and others to introduce “green,” energy-efficient models in select markets, PC manufacturers have not kept pace with the innovation and marketing of notebooks. This may reflect a sense of security – that the preference for desktops will endure – but it ignores a potential opportunity. Improvements in infrastructure and service provision (e.g., reliable electricity and broadband) will make it increasingly easy for PC manufacturers to realize cost reductions by moving software applications and data storage to the cloud. More locally-relevant content, simpler interfaces, better co-ordination with local maintenance providers, and services tailored to the education, government and SMB segments could also stimulate desktop sales, claiming even more of the overall PC market for desktops in India and elsewhere.

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