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HP emerges as lowest bidder for UP govt laptop scheme
[December 12, 2012]

HP emerges as lowest bidder for UP govt laptop scheme

LUCKNOW, Dec 12, 2012 (Mint - McClatchy-Tribune Information Services via COMTEX) -- Hewlett-Packard India Pvt. Ltd emerged as the lowest bidder in the Uttar Pradesh government project to buy 150,000 laptops for students in the state, which could restore its leadership in the Indian PC market.

The order could be divided among other vendors such as Acer India Pvt. Ltd, Lenovo India Pvt. Ltd and HCL Infosystems Ltd, which also qualified in the technical round, although HP may get the biggest share.

A UP Electronics Corp Ltd official said a decision is expected within the next four-five days. If the order is split among multiple vendors, the other companies will have to match the lowest price quoted by HP (around Rs.16,000 per laptop or Rs.19,000 with taxes and duties), the official said on condition of anonymity.

Other companies may find it difficult to match the price quoted by HP.

"If you look at all the bids, the difference between the lowest and some of the other bids is quite wide," said an official at one of the companies that wasn't the lowest bidder. "It would have been easier had it been a difference of one or two per cent, but that's not the case." Sumanta Mukherjee, lead analyst for computing devices at CyberMedia Research (CMR), said that since "no government will want to keep all its eggs in one basket", the contract will be split in all probability.

A similar Tamil Nadu order for around 900,000 laptops was also split among several vendors -- HCL, Acer, HP, RP Infosystems Pvt. Ltd, Wipro and Lenovo.

The price quoted by Lenovo, which emerged as the lowest bidder and got the highest chunk of the order, was Rs.13,939 per laptop.

According to an 11 December report in the Hindustan Times, HCL quoted around Rs.22,000 with taxes per laptop, Lenovo around Rs.24,000 and Acer approximately Rs.25,200 for the UP deal.

Companies may match the HP price to add volumes, even though the deal may be a drag on their margins, Mukherjee said.

This will help "companies while bidding for other contracts", he said. "But as the Tamil Nadu deal has proved, such deals may not be very good for the bottomline." The Tamil Nadu contract was delayed because vendors found it difficult to service the deal at the agreed price as component costs rose due to currency fluctuations and a scarcity due to floods in Thailand.

For HP, the deal would act as a boost, Mukherjee said.

The company, which was the market leader in the personal computer market in the country for many years, was dislodged two years ago by Dell. According to market research firm Gartner, the company has a market share of 15.5% at the end of September quarter and stands at the number three spot with Lenovo and Acer at number one and two, respectively. Dell is down at number four.

An official of the company who did not want to be named confirmed that it had emerged as the lowest bidder but said it was waiting for the final decision from the government. "Obviously, if we win the tender, it will be a big thing for the company," the person said.

___ (c)2012 the Mint (New Delhi) Visit the Mint (New Delhi) at Distributed by MCT Information Services

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