The gradual dissolution of tariff and custom barriers, increased competition amongst the premium brands, and continued reduction in hardware prices have propelled the growth of notebooks in the Indian market. Acer has played a pioneering role in breaking price barriers in this high-price segment that hitherto saw characteristic popularity only with a small and niche group of buyers comprising of senior business executives and technocrats. In order to corner a larger market share, the company came up with innovative strategies to make laptops affordable to the highly prospective SMB and SOHO segments. The Company Focus provides a holistic picture of the notebook market in India, the various segments therein, the gradual shift in the purchasing pattern from desktops to notebooks. It also provides the company profile and the various strategies that Acer pursued for a sustained growth.

On March 1, 2005, Acer India Private Limited, the Indian subsidiary of the Taiwan-based multinational Acer Inc., announced a marked reduction in the price of its entry level notebook Aspire 1362 NLC. The laptop which was earlier priced at Rs. 35,999 saw a drop to Rs. 29,999. "It has been Acer's philosophy to provide its customers with the best technology at an affordable price. This new product in our portfolio is a reflection of this commitment. In the pursuit to empower consumers we have always revolutionized the price points in the notebook category," remarked S Rajendran, GM (Sales and Marketing), Acer India. The company pioneered the arrival of low-cost notebooks in the country when it launched its Aspire model for the first time in early 2000. Keeping up with its strategy of breaking price barriers in the laptop segment, Acer kept on reducing the entry level prices every year. In 2002, it came with a laptop for less than Rs. 60,000. The following year it launched another low-cost notebook at a much lower price point of Rs. 50,000. And subsequently in 2004, it reduced the price to an even lower Rs. 40,000. The successive price reductions coupled with attractive product offerings boosted the sale of Acer laptops in the Indian market. The inherent leverage that Acer enjoyed on its product pricings threatened even the well entrenched brands like HP, IBM, Dell, and Toshiba who despite having greater market share (refer Exhibits I, II) found it increasingly difficult to compete with the Taiwanese giant on the price front. As a sequel, many companies repositioned themselves to withstand competition and meet the requirements of low-end users. The market, thus, saw a steady reduction in the price of various laptops, resulting in enhanced sale of laptops across all user segments (refer Exhibit III).

The gradual dissolution of tariff and custom barriers, increased competition amongst the premium brands and continued reduction in hardware prices propelled the growth of notebooks which had so far been restricted to a small and niche market segment comprising high profile business executives and technocrats. Before the arrival of Acer in the Indian notebook scene, most of the PC manufacturers and vendors centred on high-end customers ignoring, by and large, the small and medium scale businesses (SMBs) and small office, home office (SOHO) segments that remained etched to the desktop PCs. While the price of desktop PCs kept falling, the price of notebooks had remained astronomically high even at entry level segments. Notebooks not only faced competition from the branded desktop PCs but also from the highly competitive assembled PCs that came in flexible configurations at much lower price points.

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