Monday, April 03, 2006

PCs, commodity already

Two cowboys (no, no! This is not Brokeback Mountain story!) with guns in their hands and backs facing each other start walking in opposite directions, the crowd is holding its breath, not knowing who is going to be killed. In a flash the two men turn. On a creaky wooden chair, sits our smiling Saif. When you expect the two cowboys to shoot, Saif moves his hand in a magician like manner. And lo! The two cowboys who were willing to smoke out the gun powder are astonished to see roses popping out of the gun. Saif, the magician, again does a trick and the two cowboys start dancing.

On the other side, I think in a downtown Indian city, a foreigner is in a computer store and seeks information about a PC. The Khan Badshah (yes Shah Rukh Khan), grabbing an opportunity to speak to the beautiful white skinned lady, enters and explains the features of the PC and the freebies that she would get along with it. In comes the real sales man and hands over Khan Badshah's computer and his freebies. The white babe is shocked and so am I!

Having been fed on 'Crossing the Chasm'’ and other masterpieces Geoffreyry Moore and brain trained by Naru, the recent ads are kind of disturbing. What's more! Having spent more than 3 years in 20:20 MEDIA, India's largest IT PR consultancy, we always told clients that IT was different from other industries because it was still nascent. The significance of this statement is that unlike other industries, you need to sell concepts before you can sell the products/solutions.

For those who think, I am talking non-sense, let me explain. Have you seen ads of soaps explaining the ingredients and how they keep you clean? No. Do you need to be told that to take a bath, soap is essential? No. With this in mind, every brand of soap has taken a positioning. Lux is for beauty (for film stars), Hamam is a family soap (and important to get your daughter married!), Chandrika/Medimix are Ayurvedic. Similarly for automobiles. Ferrari is for speed, BMW is for class and Merc for safety (and status). This also helps consumers relate to what products they need and able to make a choice.

But PCs. Hmmmmm. It was about a new Pentium. It was about screen - LFT, TFT and what not. It was about RAM - 64, 128, 512...It was about software, internet, games...Today, computer is almost everything. It is entertainment, education, games, information, let me make it simple, it is about convergence. Everyone was explaining how things work in the mysterious IT world. But never was it sold like a mainstream brand?

But suddenly, here are two stars who are endorsing PCs - Lenovo and Compaq.

Have PCs gone mainstream?

Statistics reveal that of the 30 odd million PCs that exist in India only 30% find their way into households. Of the 200 million odd household this penetration would be meager 5%. This fades before TV which is reaching 50% penetration.

What does this indicate?

1. It could mean that PC companies are now finding the market saturated and are not able to find new buyers. Therefore, lure them with faces they love to watch.
2. People know what a PC can do, so don't teach. Move ahead and differentiate by creating brand.

Think about it. The MAIT, Dataquest and other reports on PC consumption indicate that the market share of assembled PCs is coming down. There is a growth of PC brands.

Whatever it may mean, if this trend continues, I think it might change the balance of power in the PC ecosystem. Finally, we may see that the Intel domination is likely to be reduced. The power of brand ambassadors may steal the shine out of Intel's contribution to ads. More so, for PC parts makers.

(Picture Courtesy: The Hindu Business Line)
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