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Alok Ohrie, who recently took over as the president and managing director, Dell India talks the company’s strategy for its PC and tablet for the Indian market. In an interview to Surabhi Agarwal, he says that while Dell will continue to be very aggressive in the Indian market, it will chose value over volume. Edited Excerpts:
Just a couple of years ago Dell became very aggressive in the PC segment but there has been a certain cooling down now. Why is that?
I think the Indian market is underpenetrated. The entire market is only roughly 12 million units (a year). Compare this to China, and how can one explain the gap between 12 million and 66 million (unit sales) in China last year. That’s like 5 times, so to that extent there is huge potential. One should also acknowledge, that the competition is extremely fierce and the margins are wafer thin and every company has its own set of objectives when it comes to playing in particular market. In this category of products we do not want to play at the expense of margins. But we are seeing an aggressive market share gain coming our way in the last three quarters based on the IDC reports. In the consumer space, which is a larger play we are seeing a substantial gain – first and second quarter put together -- we have gained almost 4.5 percentage points of market share. But we will continue to ensure that we don’t go under. Volumes don’t get you anything in this business, it is a business which is hugely dependant on a customer seeing value in something and paying you for that value.
Is that the reason why Dell has been consciously staying away from government business?
No we are not staying away from government. We have a fairly high mix of government business. We have not being there in those large state government deals which run into multi million units as to our mind that business is financially not sustainable. It helps with volumes and market share but it is such a huge challenge to manage in your portfolio. Going forward we are considering a few different approaches for that segment so when we find a way in which we can address it in a financially meaningful manner, we will participate.
There are products that we will be launching over the next 6-9 months in a price point which will make us much more visible in that space.
Dell has very little presence in the new form factors – tablets and Mobile. What is the strategy there?
So, we are very excited about tablets. It is one area in which you will see us being much more aggressive that we have been. So you will very soon hear from us about 7 and 8 inch form factor tablets running on both Windows and Android operating systems. We will come up with the Android first and follow-it up with the Windows later. We believe that over a period of time, there will be a blurring of lines between the smart-phones, notebooks and the ultrabooks. And tablet seems to be an intermediately step to that.
In which segment would you position yourself?
We had tablet in our product portfolio but it was priced a little high (Rs.35,000 to 40,000) and was more in line with the technology that was available that time. You will see a substantially lower priced product than that when we launch the 8 inch. The launch will be very soon, much before the end of the year.
