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BW Businessworld

The Price Is Right

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It's 'raining' tablets these days. With the advent of Apple's iPad, a new trend of offering this sleek new device has gained momentum in the global technology market — rivals such as HTC, Research in Motion, Dell, Motorola and many others jumped in the fray, and thus begun a rat race. First, the race was about 'who all can offer a tablet' then began the fever of 'who can offer the most advanced tablet', with 'how many applications or apps.

And as this tech-fever caught hold of Indian tech geeks, the race turned into 'who can offer the cheapest tablet or at least 'affordable' ones?  A trend similar to that of mobile phone manufacturers popping-up now and then as we see more Indian players getting more and more tech savvy.

After Reliance Communications launched its 3G tablet in collaboration with Chinese firm ZTE Technologies at a price tag of Rs 12,999, Bharti Group's company Beetel introduced its version of a tablet PC at Rs 9,999 on Thursday. A day later, a little known Bangalore-based firm Lakshmi Access Communications Systems (LACS) launched a tablet PC for just $99 (about Rs 5,000).

The company has intensified the competition by introducing a wide range of Tablet PCs with screen-size varying from 4-10.9 inches. The company, which launched its first tablet PC in January 2010 under the brand name Magnum, said it has revamped its product to better suit the users' needs and has made investments of about Rs. 20 crore in the project so far.

"The product was designed by LACS, while the manufacturing was outsourced to a Chinese firm," says Managing Director Mahendra Kumar D. Jain. Magnum is available in different screen sizes, with some of the variants doubling up as a phone, and the maximum price tag of the product is about Rs 38,000.

Among the unique selling propositions of the product are its pricing, upgrade and damage warranty, and the wide variety. "The devices come with 2 unique types of warranty - an upgrade warranty, wherein the consumer can upgrade to a newer technology device at a small incremental cost, and a damage warranty, wherein a new device is shipped directly to the consumer in the rare event of the device experiencing sub-optimal performance," the company says in a statement.

While the company has not yet elaborated on the features of Magnum tablets, these devices will come with Android 2.3 gingerbread operating system, with some of the high-end variants having dual-boot option (Android + MS Windows). Apart from the regular features of a PC, Magnum variants have Bluetooth (DUN) Internet connectivity by pairing with mobile phone, and menu available in 11 languages.
The company plans to invest about Rs 100 crore in the venture in the next one year. It will spend about Rs. 60 crore in marketing Magnum and open 10,000 EZs (experience zones), or franchisee retail outlets in the financial year 2011-12. LACS  is looking at a sales target of Rs 800 crore in the current fiscal.

The company is adopting a franchisee model of retail outlets for which the company plans to open about 10,000 product display galleries or experience zones - what the company calls 'Easy EZs.' "For consumers, the ubiquitous presence of easy EZs means that the fear of online purchase is completely eliminated. They can see and experience what they are going to buy, even before placing their order," says Jain.

Easy EZs could be set up in just 100 square feet of area, with an investment of Rs 3.5 lakhs which could also be financed and requires no sales tax registration as the billing is done directly to the company, online.