The Hindu Business Line : Sticky sales push PC makers' rethink on pricing

COMPUTER makers are relooking at prices of desktops and notebooks to reverse slowing sales as consumers have deferred their purchases anticipating a post-Budget drop in prices.

The Union Budget allowed exemption of eight per cent excise duties on personal computer imports while retaining 16 per cent countervailing duty (CVD) on components.

However, most of the manufacturers are yet to take a definite step as they expect some "signals from the Government" over the next few days to help them firm up pricing strategies.

"Our sales have been drastically hit as people have deferred their buys ... sales are down by almost 50 per cent in the last 15 days," said Mr Amit Khanna, owner of Binary World, a leading computer dealership in Bangalore.

"Customers are still waiting for a clearer picture," Ms Devita Saraf, Executive Director of Zenith Computers said.

While companies like Zenith Computers have already announced a two per cent price cut across its products, global top gun Dell is likely to roll back its reduced price offer by Friday evening.

"The Government has told the company that the excise duty is going to be rolled back. But since we gave an ad yesterday, we are going to keep our word. If payment is made within 5 p.m. July 16, the offer is valid," Dell contact centre employees said.

Dell, which unlike other vendors imports all its products from Malaysia, had announced a six per cent price cut ranging from Rs 2,000 to Rs 4,000 on its desktops, workstations and notebooks on Wednesday.

However, top Dell officials refused to comment and passed the queries to its external communications agency, which also chose to stay silent.

Local player, PCS Industries, which considered a four per cent reduction in its prices to offset the stagnated sales over last fortnight despite its willingness to dent bottomline, did not implement it anticipating some directions from the Government early Friday.

The Acer India General Manager (Marketing), Mr S. Rajendran, said that the company has witnessed a slowdown in sales due to purchase deferrals.

"However, we expect the sales to be normal next week on the hope that 16 per cent CVD on components would be removed."

However, Wipro Infotech's General Manager (Personal Computer Business), Mr Anil Jain, said that the company had not witnessed any impact on sales.

"It's too early to comment on the sales impact," he said, adding that Wipro was not considering any price cut currently.

"We are hopeful that the Government will come out with something soon," the MAIT Executive Director, Mr Vinnie Mehta, said.

PC makers had initially cheered the Union Budget that abolished eight per cent excise duty on PCs but later realised that the move did not pass on cost benefits either to them or the consumers.