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Growing the beanstalk

P. T. Jyothi Datta

With its Beanstalk brand of computers, HCL Infosystems is going the whole hog to offer home-users the ultimate out-of-the-box experience.

`Never before, never again' - that was the promise of the Beanstalk experience. Remember Beanstalk, the home segment-focused multimedia-enabled personal computer from HCL Infosystems that burst onto the scene five years ago?

Promising the child and its family a different experience in `edutainment' through advertisements, set creatively apart from the standard product-centric computer advertisements one usually sees, the Beanstalk brand entered the market playing on its posi tioning as a quality product available at competitive price-points.

The company's next phase of advertising spoke of a better quality of life, where the family spent time together on the home PC. However, market perception is that Beanstalk has been rather low-profile, advertising notwithstanding.

And, with the future belonging to convergence products, with PCs appearing set to offer entertainment opportunities and television preparing to offer Net services, the home, it seems, is definitely the place to be.

And, with the home looking all set to become the most happening place, where does that leave the Beanstalk brand, one of the forerunners in the small office home office (SOHO) segment?

Beanstalk, with its tagline, `The fastest way home', now seeks to pamper its user by catering to his/her changing needs in terms of aesthetics, performance and applications.

The Flex ATX form factor to enable innovatively shaped cabinet design, DVD and CD players, enhanced graphic, storage and processing capabilities, Internet readiness and simple and intuitive operation and support are some of the features that Beanstalk pr ides itself on.

HCL's Beanstalk Ultima, Beanstalk Ultima Elite and Beanstalk Pro target both the SOHO and the small and medium enterprises segment, and are priced between Rs 55,000 and Rs 70,000. Its Busy Bee brand, that also targets the home segment, comes at Rs 35,000 .

Tracing the evolution of the Beanstalk brand over the last five years, Rajendra Kumar, Vice-President (Operations), HCL's Frontline Division, says Beanstalk, positioned at the competitive price of Rs 19,995 about five years ago, targeted the upper end of the market in major towns. ``But, now with PC penetration looking to reach the small towns too, we are looking at secondary and tertiary towns,'' he adds.

Frontline Division, the distribution arm of HCL Infosystems, and among the first to give value-added offerings to PC users, is marketing these products through its distribution network.

Convinced that the home is where the PC is, HCL had promoted the Beanstalk brand despite the initial risk of not netting the numbers. ``With our Beanstalk and Busy Bee brands, we were pioneers in bringing in a product to tap a nascent market. We literall y created the market. But, over the last three years, the market has been evolving and more so in the last six-seven months,'' says Kumar.

According to him, at 4,00,000 units or 35 per cent of the total PC market, the SOHO segment is the fastest growing one. About three years ago, it was only five per cent of the total market. ``Initially, the numbers were small as penetration was low as a result of high duty structures, which were not yet rationalised,'' comments Kumar. ``And, at that point of time, there were not many players in the market by way of competition,'' he adds.

Around the same time, Pertech Computers Ltd (PCL) had also launched an aggressive campaign targeting the mass market. PCL's campaign, though initially robust later weakened. But, that's a different story. At present HCL's home-oriented brands see their c ompetition in Compaq's Pressario and HP's Pavillion.

Kumar sees two critical factors that are going to continue fuelling demand in the home segment. ``One is definitely the Internet explosion and the other key driver is the child's education, with parents wanting to provide the best platform and tools and with the significance of technology increasing in social life,''he says.

Another interesting factor is that PCs are moving out of the study room and into the drawing room. ``People no longer want those standard boring colours of the typical business PC. Subsequently, we brought in our colour coordinated PCs in silver and blue and grey and white combinations. Even as product innovations are constantly happening, we are investing heavily in aesthetics and also support our consumer base with a strong tele-support network,'' he says.

Profiling the consumer, Kumar says the home PC user is of two types: The IT-literate category and the application-seeking category. The former looks for performance features and the latter looks for consumer-friendly features, and with its SOHO-oriented Beanstalk and Busy Bee brands, HCL Infosystems covers both segments.

``Giving the consumer the convenience of choice, the two brands cover the consumers' needs of creativity, imaging, gaming and Web-designing, to mention just a few. Ease of use is another operative word with these brands, for instance, even a child can us e the opening Beanstalk screen,'' says Kumar.

Satinder S. Juneja, senior manager with the Frontline Division, says Beanstalk has entered its third phase in both advertising and features. Says he: ``After the launch advertisements, we focused on price-points. The second phase saw the advertisements g et a more human face, with a stress on the quality time that a family needs.''

Beanstalk is currently in the third phase, where PC penetration seems set to increase. ``The users of IT are going to be in schools, there would be e-classes and more people will be using it from an application point of view,'' Juneja says.

Other promotional efforts being undertaken by HCL Infosystems include working with schools and encouraging students and teachers to develop their own course material. This effort is being undertaken along with Microsoft and Intel. ``Technology is no long er restricted to the PC, monitor and keyboard. Applications are extending to the home theatre, a good sound system, better graphics and the like. This is where we are going to be,'' adds Juneja.

The growth rate of the domestic PC market is about 35 per cent, as compared to the global market, at 25 per cent. And, it is expected to maintain the same pace over the next three years, according to Kumar. The convergence product market is also expected to show a similar growth pattern, but he does not feel this would threaten Beanstalk's market.

``According to the International Data Corporation (IDC), the home segment is growing at 65 per cent. The growth of the convergence market is only going to further expand the home segment. Though 50 per cent of the home market is made up of assemblers, mo re home users are becoming brand-conscious. And, with reliability increasingly becoming a factor, our reinforced tele-support and retail network play a significant role,'' Kumar says.

With a market share of 25 per cent of the branded market, Beanstalk is continuously investing to beat the obsolescence factor that plagues the industry. ``We are ready for the technological innovations that the market would need in future and are looking to promote our products through creative marketing, such as the formation of Beanstalk clubs. Fresh advertising is also on the cards,'' says Kumar.

And, since all the action promises to be at home, HCL's Beanstalk is pulling out all stops to offer the home-user the ultimate out-of-the-box experience.