HP has been ruling the Indian market ever since it launched their computers hit the Indian shore.

They
have been the market leaders for 5 years but now they have been overthrown of their position by Dell.
HP India was leading Dell in annual sales figures by almost 1.5 lakh units last year. But this year it has
overturned. Dell has managed to sell 3.53 lakh computers against 3.31 lakh computers sold by HP for the
month of June.

When Dell arrived in India, they knew their conventional sales strategy won’t work in India. They would
have to enter stores in order to make a mark in the Indian industry. Dell entered and with their jaw
dropping prices, competitors soon realized Dell’s presence in the Indian market. For the second quarter
this year, Dell leads Indian computer market with 14.3% market share. HP is 2nd with 13.4% while Acer
is on 3rd with 11%

According to a report by Gartner India, Dell has overtaken HP as the number one personal computer
brand in India, in second quarter of 2010 (April to June), where it sold 3.53 lakh PCs, as compared to
HP’s 3.31 lakhs. HP had held the crown for five years in a row, and for an indication of how fast Dell has
grown, note that HP led Dell by 1.5 lakh units in the same period in 2009.

his is especially heartening for Dell, as they had to change their entire direct-to-home delivery platform
for the low-penetration Indian market, and instead sell through conventional authorized shops and
dealers.
HP is known as a ‘premium’ brand, and is often grouped with other brands like Sony and Toshiba. Its
biggest competition however, apart from Dell, is from the Taiwanese manufacturer, Acer.

Gartner also released information about Dell and HP’s last quarter market, where Dell had a 14.3% share
of the overall PC market, compared to HP’s 13.4%, and Acer’s 11%. In the notebook category, Dell’s
share was 27%, while HP had approximately 20%.

In the coming months, recent news of Dell’s earlier shady practices might affect its sales adversely, but
the odds are the common man would turn a blind eye to it.

For as long as we could recall, (five years to be precise) HP was leading the PC sales in India when it
came to the organized market. It has been consistently selling more PCs than any Indian or foreign
company - until now.

HP's Indian dream run has been cut short by Dell who sold more computers in India than HP for the very
first time. That's right! According to a report in the DNA, Dell sold around 3.53 lakh PCs in the June
quarter compared to 3.31 lakh by HP. 

Dell's growth is remarkable considering it was trailing HP by over 1.5 lakh units in annual sales just a year
ago. Not long ago, research firm IDC had also noted that HP fell behind Dell in the notebook sales
department as well. When Dell first arrived in India, it was using a Direct To Home method of selling its
products. However, Dell quickly realized that for it to make any mark in the Indian market it will have to
trudge the "traditional" sales path wherein Dell products would have to made available in stores as well.
Soon after Dell arrived in India stores, its cut throat pricing vis-a-vis other brands seems to have worked
wonders.

In India, Dell now has a market share of 14.3 percent in the overall PC market last quarter, followed by
HP with 13.4 percent and Acer with 11 percent. 

While HP might be left behind in India, on the global front, Dell still plays second fiddle to HP. Until 2006,
Dell was the world's no.1 PC maker until HP overtook it. Bad news followed when Acer pushed Dell to
the third place a few years later. Dell has managed to pull itself back though and has now regained its
world no. 2 spot by pushing Acer down the order.

Dell’s Entry in India

Dell International started in India about seven or eight years back by opening a customer contact center
at Bangalore in 2001. In 2003, the second contact center was opened at Hyderabad. The company
operates its services from four centers based at Bangalore, Hyderabad, Chandigarh and Gurgoan. Dell
started in Bangalore providing customer support to English speaking countries and later also began
providing technical support, procurement of financial back office and Knowledge process outsourcing.
After the U.S., Dell India is the second biggest centre with 13,000 employees. The strategic importance
of India to Dell is evident from the fact that India was one among three locations (the other two being
US and UK) where Dell’s Latitude E series and Precision notebooks were launched.

Manufacturing – The first Dell ‘Made in India’ desktop

“The Chennai operation reaffirms the strategic importance of India to Dell, providing significant impetus
to our growth plans and prospects here, where we are already among the fastest growing computer
systems suppliers.“- R Anandan, VP & GM, Dell India

In July 2007, Dell began production at its new manufacturing facility in Chennai (Dell’s third
manufacturing location in Asia-Pacific and Japan region and eighth overall). The Sriperumbudur plant
(50-acre site with a planned five-year investment of about US$ 30 million) was chosen for manufacturing
in September 2006. The planned initial capacity was around 400,000 desktop computers per year. The
company has doubled its production capacity since then from 400,000 in 2007 to the 1 million units in
June 2008. Infosys, one of Dell’s largest customers in the country, was presented with the first ‘Made in
India’ desktop computer system.

Dell’s Market Share in India

“India is the fastest growing market for Dell worldwide and laptops have emerged as the fastest growing
form factor.” – Rajiv Ahuja, Director Communications of Dell APACS

“By 2015, the number of PCs in India will grow 10 times and in the last year our personal computer sales
in India grew by 99% compared to the previous year”  ” – Michael Dell.

“We have gone from zero to 10 per cent share in the government segment and we’re the largest player
in the large enterprise space” – Sameer Garde, India General Manager for Dell.
In March 2007, Dell was roughly a half a billion dollar enterprise in India and has expectations to touch
revenue of $1 billion within the next year. (Within three years of launching its products in the Indian
market, Dell crossed the $1-billion sales mark in India.) In 2008, Dell ranked third in the Indian market
with a 7.6 percent market share compared to about 4 percent market share two years ago. In Q2, 2008,
Dell had a 16% share in the Notebooks segment and 6% share in Desktops segment as compared to 8%
and 4.5% share in Q2, 2007 respectively.

Dell’s new retail strategy and Direct-only model

Dell’s innovative direct- sales model with good sales growth had been successful until the mid-2000s
when the company’s profits and share prices began dropping considerably. Dell was selling PCs directly
to customers by phone and online. On May 24, 2007, Dell disclosed its plans to sell PCs in the US,
Canada, and Puerto Rico through Wal-Mart and Sam’s Club retail stores. This announcement came soon
after Michael Dell returned as CEO replacing Rollins.

In India, as part of the retail initiative, Dell tied up with Tata Croma (the Tata-owned electronics retail
chain) in July 2008 and with select Staples stores. By the end of 2008, Dell planned to increase its
presence to100 Indian cities by increasing its channel partners. In October 2008, Dell announced the
opening of the first Dell exclusive stores in India at New Delhi and Coimbatore. Dell also tied up with 600
systems integrators all over the country who could take orders on its behalf.

Dell’s New Marketing Strategy in India

Dell is targeting the small and medium businesses (SMB) in smaller towns in India as its main driver for
growth as the company believes this market sector is growing rapidly and is not exposed to global
shocks making it a much more stable market. Dell India is focusing on simplification of the business
processes (basic areas to improve cost efficiencies) as part of its new rollout plan. It has even tied up
with Tally to offer accounting solutions online. For an initial period, customers get a Tally subscription
free along with select Dell Vostro systems. Dell has also increased its SMB team to 200 and expanded its
presence to about 600 tier-II and tier-III cities. Dell will also introduce a portal titled “Dell 360″ (with
discussion forums) where SMBs can educate themselves on benefits of IT to their businesses.

Dell’s New Advertising Campaign for SMBs

First launched in India, Dell’s new advertising campaign is titled – “Take Your Own Path”. The campaign
targets Indian SMBs with a new range of laptops.

Testimonial Advertising instead of Transactional

In December 2007, Dell partnered with WPP (after withdrawing its advertising responsibilities from over
800 different agencies worldwide) which launched its own specialist unit Enfatico with Dell as its only
customer. Enfatico’s first international campaign for Dell targeted SMBs featured successful Indian faces
(like P Rajendran – NIIT’s co-founder and COO, Raman Roy – CEO of Quattro among others with their
testimonials) and aimed at establishing an emotional connect with brand Dell.
Channel Leveraged Business Model

At Acer, we place customers at the centre of our business and surround ourselves with dedicated,
quality partners. This gives our customers the speed, choice and flexibility that makes doing business
with us easy.

Partnerships are about commitment and communication. At Acer, we bring together partners in
channel, business and service. Our established network of Channel Partners helps us deliver award
winning service and support while our eCommerce infrastructure streamlines business transactions. This
model strengthens Acer relationships with supply chain speed and flexibility, information and service
delivery with no single point of failure.

By working closely with Channel Partners, Acer can leverage their existing infrastructure such as supply
chains and distribution to minimise costs to the customer.

We carefully screen our Channel Partners to ensure customers work with the best partners available.
Acer has worked closely with its partners to develop customer service programs, online tools and an
information infrastructure that allows them to rapidly and effectively meet your business needs.

Acer has established strategic alliances with leading IT vendors such as Hitachi Data Systems, Intel,
LandDesk and Microsoft to ensure continuous innovation is part of the value we bring customers.

cer is a major player for notebooks and desktops across the region.
“The Middle East remains one of the strongest performing IT markets in the world,” said Krishna
Murthy, managing director, Acer Computer, Middle East and Africa.

“Acer over the years has grown and constantly met and exceeded the demands of the IT industry,
empowering our channel partners and facilitating their growth is instrumental for our continued
success.”

“Acer’s dynamic channel business model encourages partners to be pro-active and, with their valued
help, we aim to capture a significant proportion of this growing IT market,” added Murthy.

At the meet, senior Acer executives updated channel partners and distributors from across the region.
New products and Acer’s 2010 strategy were key subjects.

“Only by empowering our channel partners can we hope to grow our market share. Our business model
has proven very successful, but informing our partners and helping them to grow is also vital, if we are
to sustain our growth,” said Murthy.

Acer is the gold sponsor of this year’s DCC MEA event.

Some of the Acer products on display include Aspire 3D, the Acer PC with 3D viewing experience, the
TriDef media player, which supports on-the-go conversion of 2D videos and photos, Ferrari One, Acer’s
notebook which combines powerful performance with extreme portability, and Acer Timeline series
notebooks. –