PC market: More innovative, more affordable

Burhanuddin Abe, Contributor, Jakarta

Today computers are no longer luxury goods, and are used both at home and in offices. Indeed, some buyers are very particular about their computers as they need smart devices with high performance for various applications such as three-dimensional digital games, or video and photo editing, for which fast, powerful and expensive processors are needed.

However, most computer buyers do not need the sophistication of their machines. They often need a computer with just enough capacity for word and figure processing, or for accessing the Internet to visit websites or check their email.

If you go to Glodok in Kota, downtown Jakarta, for example, you can easily find inexpensive computers, usually made in Taiwan or Hong Kong. Some of them are even domestically assembled with performance as good as that of branded personal computers.

Although rather behind the times compared with the markets in other countries, the computer market in Indonesia will never become sluggish because there is an increasing need for computers following the outbreak of the digital revolution that has transformed our lifestyles. It is this need that computer vendors are not capitalizing on. New computer sales centers have sprung up not only in Glodok but also in malls and plazas like in ITC Mangga Dua, Mal Mangga Dua, WTC Mangga Dua, Mangga Dua Square, West Jakarta; Audio Plaza Menteng in Central Jakarta; Ratu Plaza in South Jakarta and also in various shopping centers like Carrefour. Also worth mentioning is the establishment of the Jakarta Electronic Center, at SCBD (Sudirman Central Business District) and Mal Artha Gading.

Electronics centers have been using a variety of techniques and tactics in their attempt to attract customers, among others by maximizing the products they sell and providing the best service. Most vendors apply a credit purchase system and promote this system in the mass media.

"Given the present condition, it is hard to find buyers ready to pay cash," said Salim Ngaserin, a computer vendor at Mal Mangga Dua.

There is a common thread running through the sales strategy adopted by the computer vendors. They believe that Indonesian buyers are highly price-sensitive. Therefore, local computer makers, like Berca Group, which develops its Relion brand for desktop computers, notebooks and servers, for example, are quick to seize this opportunity.

As a new computer brand, Relion has a good chance to develop in the domestic computer market, just like other domestic computer brands such as Mugen and Zyrex. These domestic computer makers can sell their products at relatively lower prices than international computer makers.

In fact, however, not only local computer makers but also noted computer producers have found it difficult to market their products here. Aside from launching their sophisticated computers, they, like it or not, are compelled to sell inexpensive products. Intel Corp., for example, has started to offer its buyers AMD (Advanced Micro Devices) processors of the Sempron and Athlon series, which are sold at very affordable prices. Meanwhile, other world-famous computer manufacturers, like Dell, Acer, Lenovo-IBM and HewlettPackard (HP) have also done likewise.

In Indonesia, HP introduced the Pavilion PC w50701 desktop computer, whose construction design is the same as that of the previous types. While the features of the two types are similar, Pavilion PC w50701 desktop computers are sold at a much lower price than the earlier ones. At the low-end, a desktop using a AMD Sempron 3100+ processor with a speed of 1.8 GHz and 256 MB memory, a 17-inch CRT monitor and a SiS 760/964 motherboard chipset shows a satisfactory performance. The price? Not more than US$599.

Meanwhile, Apple Computer Inc., usually known to manufacture the most expensive of Wintel-based computers -- computers using a Microsoft Windows operating system with an Intel processor -- has begun to correct its prices by launching its second-line products. After a successful mass and phenomenal marketing of the MP3 digital music player, commonly referred to as iPod, Apple founder, Steve Jobs, introduced the Mac Mini.

Small in size and light in weight, this computer set, which comes out in a very attractive design, possesses all the computing capacity that we need either for doing our work, listening to music or editing photos. Apple alone refers to it as a cheap computer, using a 40 GB hard disk and a G4 processor with a speed of 1.25 GHz, and is sold for US$499, while the version using an 80 GB hard disk and a G4 processor with a speed of 1.42 GHz is sold for US$599.

This computer set is not yet a trend but at least it has become an alternative product for computer buyers. Mac Mini may become a breakthrough for all Apple products as well as the products of Apple's close rivals like IBM and HP, which tend to be facing a stagnant market.

It can be understood why IBM sold its personal computer division to China's Lenovo. IBM is known as a legendary computer manufacturer with many patented innovations to its credit. However, the problem facing the company was how to sell these innovations as lucrative commodities.

Partnering with Lenovo not strengthen its position as a company controlling the worlds computer market but also enabled it to explore the Chinese market, which offers vast potential.

Indonesia, a country with a population of over 220 million people, is also a highly potential computer market, especially because computers are used not only in working environments but also for educational and entertainment purposes. Still, the demand for computers in Indonesia averages only 500,000 to 600,000 units annually.

In fact, the demand for computers in Indonesia should stand at a minimum of 1.5 million units a year, said Herwawi Taslim, chairman of the Indonesian Association of Computer Companies (Apkomindo).

It is understandable that the demand for computers in Indonesia is still very low. The reason is that all computer components are imported from Japan, Thailand, China, Taiwan and several other countries. That's why it is necessary to create an investment climate that will encourage foreign investors, particularly foreign computer manufacturers, to set up their plants in Indonesia. "If computer producers set up factories here, the prices of computers in Indonesia can be slashed," he noted.