PC market: More innovative, more affordable

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.