The Hindu Business Line : Zooming in

IT is all too easy to guess when a person is being just nice when he says, "India is an important market for us." If there is still only a one-person marketing team in the country and sales don't show a healthy growth, you know the company is present in India only to add to those numbers of countries they claim they have a presence in.

But eWorld met two hardware companies recently; companies that have seen those numbers to be able to predict a brighter future or have been so excited by sales that a person from the parent company's board of directors is actually placed in India.

Yep - that's what AMD did. A competitor to giant Intel in the microprocessor arena, AMD Inc is relocating Ajay Marate, who is on the executive council of the company to India, as president of the country's operations. Marate's presence here would mean that India no longer reports to the Japanese office but talks directly to the US. Sure signs that the parent sees India as a serious market in which to make its presence felt and earn money. India has been classified as one of four emerging markets, in addition to Russia, Latin America and China. Significantly, 80 per cent of AMD's revenues comes from outside the US.

Also, the parent has seen profits in the last quarter after eight successive quarters of losses. This, with India's temptingly ballooning Personal Computer (PC) market (the industry estimates that 3 million PCs would have been sold here for the year ended March 2004) could have sparked the company's interest in the region. Sanjeev Keskar, country manager for AMD in India, does not reveal actual numbers but says that the recent boom in the Indian PC industry has helped AMD increase sales.

The $1.2-billion chip company has a market share of about 18 per cent, according to Keskar. In India, he says, AMD's market share has climbed from, "the single digits to about 12 per cent." The Manufacturers' Association of Information Technology's (MAIT) statistics says that the market share of non-Intel based PCs in India is 18 per cent.

Keskar says that AMD is doing three things afresh in India: it is ramping up its channel strength; adding manpower resources to specifically address target industries; and pitching in more marketing dollars.

On the first front, the company has increased its direct presence in India from seven cities to 16. Towards targeting specific industries, AMD India is putting in place a 10-person business development team to address the banking and finance sectors, the government and the BPO industry. Finally, AMD aims to increase its India dealer network by about 1000 to a total of 2000 by this year-end. Towards this, it is holding channel get-togethers at nine cities.

Even though AMD does not advertise in the mass media as heavily as Intel does, 75 per cent of unit sales for AMD are through its network of PC assemblers. Asked if it is going to spend on advertising in India, Keskar says, "We will, to create awareness. But we are essentially a technology company and our strengths are in developing products."

Another company that was keen to speak to the press was Lexmark International. Its managing director for the ASEAN region, Jonathan Yeo, too refrained from sharing details of sales. But he had some interesting insights into the printer market. Read on for some spice.

Yeo says that sales for Lexmark's all-in-one machine (AIO — with print, scan, photocopy and fax functions) have grown five-fold in the last quarter compared to the previous quarter. Though, without a comment on numbers, it's hard to gauge how significant that growth is.

P.G. Kamath, General Manager, Lexmark India, had an interesting comment on sales in different parts of the country. While the North, West and Southern regions contributed approximately 90 per cent of countrywide sales, Mumbai and New Delhi alone chalk up 55 per cent of sales. With presence already in Mumbai and Chennai, Lexmark is setting up an office in New Delhi this year.

Now that we are done with numbers, here's a bit on what influences the printer industry. Yeo says that increasing Internet connectivity helps the printer industry. After all, your printer needs increase as you receive more and more relevant information. For that, you need connectivity. Yeo cites a survey that says that only two per cent of households in Asia are connected to the Net. To him, that means potential for growth. So, is Korea, with a high level of Internet access through broadband, proving that theory? Yeo answers that with, "Korea is the third-largest market for us in Asia." With a population of a mere 26 million, that is good penetration.

Interestingly, sales of digital cameras is also contributing its mite to printer industry sales. After all, if you take instant pictures using your mobile phone or digital camera, you'd like to print them for posterity. Recently, Kodak tied up with Nokia for a promotion. Kodak offered a printing service for photos taken with a Nokia mobile phone. And Lexmark's were the printers used.

Yeo also notices a reversal of roles for the fax machine. "There was a time when e-mail attachments were printed out. Now, a printout can be e-mailed using a fax." Assume that there is an interesting article in today's newspaper that you have photocopied and want to send to a friend. You don't have the patience to log onto the paper's Web site, locate the article and e-mail it to him. So, you scroll the paper through a Lexmark multi-function machine, and instead of typing in a destination fax number, you key in an e-mail ID. An image of the copy is sent to that ID.

Finally, we asked Kamath the same question that we asked Keskar of AMD. Did Lexmark benefit from the recent spurt in PC sales? Sure, he says. "Three years ago, there wasn't much of a link between the PC and printer markets. Now, there is." He says every 100 PCs sold in India results in the sales of 25 printers. He says that would be increasing to between 30 and 35 per cent. He attributes this increase to a fall in PC and printer prices, and an increase in the range of applications that require access to a printer.

bharatk@thehindu.co.in

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