India's personal computer market is undergoing a major transition as premium notebook computers are being brought to the mainstream, with almost half the prices, compared with a year ago.

On average, the prices of notebook computers now range between Rs 50,000 to Rs 60,000 compared with about Rs 1,00,000 to Rs 1, 25,000 about 18 months ago. Moreover, notebooks now cost only around Rs 10,000 more than a premium desktop personal computer. Prices are expected to fall further, say industry sources.

Notebook maker Hewlett Packard's marketing head in India Suchi Sarkar says she expects the notebook market to grow by 50-60 per cent in the next year. The company sees a huge penetration possibility for the product in India since the ratio of desktops to notebooks in the country is 1:30, compared with a ratio of 1:6 in Thailand.

"The notebook market in India is expected to grow exponentially. One of the main drivers for this is the reduction in prices. They have become more affordable now," says Sarkar.

"We are witnessing an increasing demand for notebook computers. On the one hand, prices are crashing. On the other, adoption of technologies such as wireless, etc is fuelling the growth," according to a senior executive with another manufacturer, HCL Infosystems.

Industry sources also point out that some companies are working on a strategy to further reduce the prices of notebooks by at least Rs 10,000.

As part of a stripped-down package, companies will offer notebook computers without a battery, which will reduce the price by Rs 5,000. They also plan to market notebook computers with a desktop microprocessor instead of a notebook microprocessor. A desktop microprocessor, according to sources, is about 20 per cent cheaper than that of a notebook computer.

Besides, the decision by many a company to go in for the less expensive Linux as an operating system instead of Windows will also reduce prices by at least another Rs 5,000. Companies will also offer notebook computers using AMD microprocessors instead of Intel microprocessors, which are at least 20 per cent costlier.

The price cuts have helped the market to surge. According to research agency IDC, India is the third-fastest growing notebook market in the Asian region, with a compounded annual growth rate of 21.9 per cent.

In the first quarter ended June 2003, notebook computer sales in India grew nearly 52 per cent with a sale of about 18,000 units with the year-ago period.

In comparison, according to IDC, the desktop computer sales in the country in the first quarter grew only 11.8 per cent. However, this is at a much higher base of about 5.6 lakh units.

Companies attribute the spurt in notebook computer usage to the increasing usage of IT and the automation of the sales force in sectors such as pharmaceuticals and fast moving consumer goods.

"We expect a takeoff in the SMB and education segments, as also in the corporate space, for sales and service personnel. The prices will be brought down further," a senior executive from a leading multinational computer company said.