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Asus plans to crash the top five in the notebook & netbook segment assisted in its efforts by a company-owned local warehouse and a broader retail presence. By Pupul Dutta
Taiwanese IT major, Asus recently launched its much awaited Eee Pad Transformer Prime in India amidst much fanfare. With this device, the company plans to conquer not just the tablet market but also the premium ultrabook segment, as the device comes with an optional mobile dock that offers a full QWERTY keyboard with touchpad and USB port, while also extending battery life to 18 hours.
The Transformer Prime is the first tablet to use the Nvidia Tegra 3 Quad-Core CPU. This empowers it to deliver a gaming experience comparable to that of a gaming console. The Tegra 3 also enables up to 61% lower power consumption, which translates to 12 hours of battery life for HD video playback.
Asus currently has about 5% market share in the country and it plans to take that up to 15%. Talking about the upcoming trend, Unaez Quraishi, Director Sales and Distribution, System Business Group, Asus India, said, “In the coming months, notebooks will become thinner with longer battery life. We expect people to get used to ultrabooks given features like ultra thin, light weight and a longer battery life of 9-10 hours.”
Ultrabooks are the latest category of personal computers created by Intel and the PC manufacturers. Last year, brands like Acer, HP, Lenovo, LG, Asus, Toshiba and Samsung released their versions of ultrabooks and placed their bets on this segment for higher margins.
Quraishi said, “We want to be among the top five players in the notebook and netbook segment. We were in top seven last year.” For this the company will open its own warehouse in India that will facilitate the distribution process. “In order to reach customers and partners on time it is important to have your own local warehouse. Earlier, the distributor ordered from the factory in China and the products would be shipped directly to them. Now, with a facility set up here, all goods will be shipped to Asus India centrally and we, in turn, will send it to the distributors.”
Though vendors are betting big on ultrabooks, analysts were of the opinion that it would not be accepted by the Indian masses, at least not in the near term.
“Indian masses look for affordable products. Ultrabooks priced at Rs. 50,000 and upwards will never be accepted by the people, especially in a market where there are cheaper, more affordable computing devices available,” opined a Gartner analyst.
Margins are getting thinner by the day in the mid- and low-end laptop categories, however, and this, coupled with the entry of tablets and other devices, is eating into PC manufacturer’s profits.
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Analysts believed that, although the future of computing did rest with ultrabooks, it would take time for Indian buyers to absorb such products. “Although, we have witnessed healthy sales globally, we can’t really predict what will happen in the Indian market as of now. Also, ultrabooks would only contribute about 5% of the total share of revenues for us,” Quraishi said.
Asus & the competition
Toshiba recently launched an ultrabook that it claims to be thinnest in the category so far and comes with spill-proof technology giving immunity to the laptop from coffee or tea spills. Priced at Rs. 96,290, Toshiba is optimistic about the product’s sales. Asus on the other hand gets an edge over its competitors by pricing its tablet/ultrabook at Rs. 49,990.
The Gartner analyst said, “The market for ultrabooks will be driven by demand and supply. Unless there is any demand, how can these companies expect to make profits or reap higher margins?”
Asus’ tablet when considered as an ultrabook wanna-be is priced competitively. However, it runs Android and that platform lacks tablet apps in stark contrast to the lakhs of phone apps that are available on it. Also, when compared to the smoothness of iOS, the user experience on Android tablets still has some room for improvement.
Lastly, 3G connectivity is conspicuously absent on the Prime.
Plans & strategies
In order to reach out to customers better, Asus plans to expand its retail footprint by increasing the number of its exclusive stores from the current 18 to a hundred by end 2012. “We have our experience stores in places like Thane, Aligarh, Durgapur etc. We have done this to reach out to our customers living in tier 2 and 3 cities,” commented Quraishi.
Currently, the company has two national distributors as well as a regional distributor in every state.
Talking about upcoming launches, Quraishi said that the company would launch tablets and laptops with Windows 8 by the second half or third quarter of this year.
Definitely the setting up of a local owned warehouse will cut product dispatch times and having a broader retail footprint will also help Asus further its ambitions in the Indian market. Of course, competitors aren’t sitting still. Lenovo, for instance, has been expanding its retail footprint for quite some time now. Having said that, Asus should end up selling more items this year. Whether that will be sufficient to get it into the top five remains to be seen.
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