'Local PCs are good but they don't sell'<\/p>\n
By Johannes Simbolon<\/p>\n
JAKARTA (JP): Local personal computer (PC) manufacturers claim
\ntheir PCs are better and cheaper but harder to sell than those
\nfrom overseas.<\/p>\n
Local PCs have lost their grip on the domestic market over the
\nlast four years.<\/p>\n
They controlled between 75 percent and 80 percent of the
\ndomestic market in 1992 when 200,000 PCs were sold nationwide,
\naccording to Infokomputer magazine.<\/p>\n
They sold half of the 280,000 PCs sold in 1994, and 45 percent
\nof those sold last year.<\/p>\n
Between 1985 and 1995, the government tried to develop the
\ndomestic computer industry through import taxes and duties on
\ncomputers and computer-related products. Government offices were
\nalso required to buy local PCs.<\/p>\n
But protectionism has not worked. Not only have local PCs'
\nsales dropped, almost all of their components are still imported.
\nThe government eliminated import taxes and duties on computers
\nand computer-related products this year.<\/p>\n
The magazine estimated local PC sales would drop to 40 percent
\nof the 500,000 PCs sold this year.<\/p>\n
Local PC makers blame poor sales on image and promotion
\nproblems.<\/p>\n
\"The public generalizes that all local PCs use fake
\ncomponents, are easy to break, etc. This perception is not
\nentirely true,\" said Wiriadi Tirtariyadi, a director of PT
\nMulticom Persada International which produces Mugen PCs.<\/p>\n
Wiradi told The Jakarta Post recently that retailers and
\ndistributors gave local PCs a bad image.<\/p>\n
The big local PC manufacturers and retailers assemble PCs from
\nimported components, he said. But the big manufacturers applied
\nstrict quality controls unlike retailers.<\/p>\n
\"The PC shops (retailers) make PCs out of cheap, fake
\ncomponents and sell them far cheaper than all other PCs. They
\npledge long guarantees to buyers. But, after the transaction,
\nthey disappear, or close their shop and open another one
\nelsewhere with a different name to avoid previous costumers,\" he
\nsaid.<\/p>\n
Outdated<\/p>\n
\"This has tarnished the image of all locally made computers,\"
\nhe said.<\/p>\n
To improve their products' image, four leading domestic PC
\nmakers signed an agreement recently with the leading software
\nfirm Microsoft of the United States to preinstall genuine Windows
\n95 operating systems in their PCs.<\/p>\n
The four firms are PT Multicom, PT Zeuscom Indonesia which
\nmakes Kronus PCs, PT Galva Technologies Corporation which makes
\nGTC computers and PT Zyrexindo MandiriBuana which produces Zyrex
\ncomputers.<\/p>\n
The agreement benefits local PC producers by making the public
\nbelieve in their products and benefits Microsoft because it
\nreduces software piracy.<\/p>\n
The four companies plan to make a similar agreement with the
\nleading microprocessor firm Intel of the U.S.<\/p>\n
Wiradi said the public were largely ignorant that some local
\nPCs were as good, if not better, than branded PCs from overseas.<\/p>\n
He said foreign big-brand-name manufacturers churned out
\nmillions of PCs and waited until they were all sold before
\nproducing more advanced models.<\/p>\n
They sold their stock in developed countries before sending
\nthe remains to developing countries after they had become
\noutdated in developed countries.<\/p>\n
\"This was the reason that many branded PCs sold in Indonesia
\nhad outdated components,\" he said.<\/p>\n
Local leading PCs makers had smaller economies of scale, each
\nproducing about 100,000 PCs a year. This enabled them to produce
\nmore advanced PCs with the newest components faster.<\/p>\n
\"For instance, the first computer in Indonesia using a Pentium
\nPro microprocessor was a local computer, not a branded computer,\"
\nhe said.<\/p>\n
Zatni Arbi, a computer observer, said Wiradi's statement that
\nbranded manufacturers sent the remains of their stocks to
\ndeveloping countries was no longer true. He said branded
\nmanufacturers were now launching their newest products in
\ndeveloped and developing countries simultaneously.<\/p>\n
\"I know that IBM Aptiva and Compaq Pessario were launched in
\nthe U.S. and Indonesia around the same time,\" he told The Post.<\/p>\n
Cheaper<\/p>\n
The leading local PC makers may no longer boast that their PCs
\nuse more advanced technology than branded PCs sold domestically,
\nbut they insist their PCs have some advantages over branded ones.<\/p>\n
\"As far as technology is concerned, all computers are similar.
\nYou can check that on the contents of local and branded PCs. They
\nare basically similar. Local PC manufactures can only take
\nadvantage of better after-sales service and cheaper prices,\" said
\nHendra Sutandinata, the president director of PT Zeuscom.<\/p>\n
Some local manufacturers, he said, had around-the-clock after-
\nsales service to repair broken PCs, while branded PCs might have
\nto be sent to Singapore.<\/p>\n
Local PCs could be between 25 percent and 30 percent cheaper
\nthan comparable branded PCs, Hendra said.<\/p>\n
He said no branded computer firms made PCs themselves anymore.
\nThey ordered them from PC makers around the world, including
\nIndonesia. They put their brands on the PCs and raised the price.<\/p>\n
\"I know that because I once worked for a big computer firm in
\nthe U.S. and purchased PCs from manufacturers around the world
\nfor our company,\" said Hendra, a former marketing manager of
\nAmerican Tandon Computers.<\/p>\n
He said Zeuscom's factory in Kapuk, Tangerang, also made PCs
\nfor branded PC firms abroad. He would not reveal their brands.<\/p>\n
\"So what happens is really funny. We export our PCs to the
\nUnited States. There, our customers put their brands on them and
\nsend them to many parts of the world, including Indonesia, at a
\nhigher price,\" he said.<\/p>\n
Hendra said local manufacturers preferred selling computers
\ndomestically with their own brands to making computers for
\nbranded PC firms because it was more profitable.<\/p>\n
\"The profit (margin) from domestic sales can reach two digits,
\nwhile profit from sales to branded computer firms averages 2
\npercent,\" he said.<\/p>\n
Local manufacturers found it hard to sell their products under
\ntheir own brands because they could not afford to promote them,
\nhe said.<\/p>",
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