Intel gearing up to capture rural market


Intel is gearing up to increase the penetration of PCs in India. The plan is to take them beyond metros, and into small towns and villages.

The chip giant is studying various supply chain models, including that of FMCG companies, to figure out ways to sell high-tech products in these often remote and not very prosperous locations.

The managing director (South Asia) of Intel Technology India said that they can’t use regular channel based distribution mode because it’s a different ecosystem. Unlike in a metro where a PC is a family device, in tier IV and V locations, it would be a community device. It is likely be used by someone to offer services to others in the villages. It will be some thing like a digital post office, to send email.

But even then, the opportunity would be huge considering there are some 6 lakh villages in India. Currently, Intel is present in 484 cities of the country.

Last month, Intel signed a MoU with the Maharashtra State Co-operative Societies Federation (MAFCOCS) under which they will together deploy 10,000 community PCs across 80,000 co-operative credit societies in India over one year. Under the MoU, MAFCOCS and Intel will jointly campaign to increase awareness of IT adoption and solutions. Further Intel will help MAFCOCS set up a data center in Pune (a larger city in the state of Maharashtra, India) which is scalable in order to cater to the future needs of credit societies.

Another effort that Intel recently took to increase penetration beyond the metros was to tie up with Reliance Communications to provide instant internet connectivity through the Reliance Net connect service platform. Under this, users purchasing system from genuine Intel dealers (GID) in certain tier II and III towns in two other south Indian states of India that are Karnataka and Andhra Pradesh. In the aforesaid mentioned class cities Intel powered PCs will be offered with Reliance wireless products to avail of internet connectivity at speeds that far exceed today’s dial-up speeds. The understanding is that the availability of good internet connectivity will encourage people to buy PCs.

An IMRB study on PC penetration indicates that the penetration level in SEC A is 40%, in SEC B is 26-27% and in SEC C a mere 2-3%.

Intel chairman Paul Otellini’s last visit to India had marked the launch of Intel’s world ahead program in this country program to bridge the digital divide through greater accessibility, connectivity and education. This is a $1billion worldwide initiative.

Intel’s activities in the months ahead is likely to impact bout 850 million people with an income below $3,000 a year with the company’s low-cost computers costing 20% less than the present Intel-based PCs.

WiMax (wireless broadband connectivity), although at a nascent stage is expected to be a key driver in increasing PC penetration.