Componentes de la sangre humana y de bovino

Enterprises Consumers Government

R&D, design, technology licensors Hard disk / Casing

Video card; Sound card; Network card

Despite the strength in design capabilities, there is no local realization of IP. However, Indian design skills are quite valued and there is considerable value added in the design activity that happens out of India. Intel, NVIDIA, AMD and Microsoft, among others, execute a large amount of their R&D activity in India. The design aspect of the value chain is definitely a huge strength for the Indian electronics ecosystem. However, it lacks an institutionalized process to make that strength work for the country in terms of realizing local IP, etc.

Laptops: TM, TDM Volumes Forecasts

Product _{(Million units)}TM Volumes TDM Volumes for Local _{Sales (Million units)} TDM Volumes for Exports _{(Million units)}

2010 3.63 0.00 0.00 2011 4.07 0.00 0.00 2012 4.56 0.00 0.00 2013 5.15 0.00 0.00 2014 5.83 0.00 0.00 2015 6.65 0.00 0.00

Category Product Local Supply _{Manufacturing}Local _CapabilityLocal IP Company _Names Level of Local _{Value Add} Remarks Components and Sub systems Processor Only Sales Offices; Total

Imports No No Intel, AMD NA

Though design capability exists there is no local real-

ization of IP

Display Imports No No Samsung NA

Motherboard _{Local Supply}Imports / Yes No

Pegatron, ECS, Giga- byte, MSI, Foxconn

NA

HDD Imports No No _ThoshibaSeagate, NA

Software Yes NA No Dell, Intel, _Microsoft Med Both captive design cen-tres and design through service model

Laptops OEM Yes No No

HP, Dell, Lenovo, Acer,

HCL

NA

EMS No No No NA

The table below captures the capability in India across the laptops value chain.

The Indian laptop market exhibits great local demand, which will also be well sustained in the medium term. However, since the market is import heavy, it is subject to the vagaries of currency fluctuation which creates business uncertainties for laptop vendors and price uncertainties for consumers. Government procurement of laptops will drive the market in the short term, while any increase in the computing power of tablets or the emergence of a disruptive form factor in the portable space could eat into the market for laptops fairly quickly.

The SWOT chart below captures the analysis for the laptops market.

STRENGTHS

Huge consumption demand for laptops Well developed design skills

Government procurement and decline of desktops to drive market for the short term

Indian user segments are becoming more computer savvy - education, etc.

Well developed EMS industry - capabilities for mobile phone manufacturing

OPPORTUNITIES

Decline in desktop sales leading to demand for laptops, for computing power

Escalating manufacturing and labour costs in China could drive investment to India

New policy aspects such as EMC could encourage local assembly investments

WEAKNESS

Absence of supporting industries to support assembly of laptops locally

Reliance on imports for most of the critical components and for assembly

Limited IP generation

Import heavy market pushes Indian market behind on global product launch timelines

Market subject to currency fluctuation

THREATS

Well established manufacturing ecosystem in China and East Asia

Rate of technological change could see laptops being phased out in favour of tablets or other disruptive form factors

Import heavy market could worsen India’s import bill if left unchecked

Component SWOT

The biggest contribution to the BoM in terms of dollar value in a laptop is accounted for by the display and the processor, which account for 15 per cent each. Next comes the motherbaord and the HDD, which alongwith the display and processor,could account for almost two-thirds of the total BoM of a laptop. In short, the top 4 components that contribute to majority of the laptop bill of materials (BoM) are:

1. Display 2. Processor 3. Motherboard 4. HDD

Since laptops are imported in finished product form for the most part, none of these components are locally sourced.

Strategic Conclusions

General

The reimbursement process for claiming tax credit on input duty paid should be made easier and faster so that companies do not have to contend with uncertainties of receiving reimbursement. This would encourage companies to invest in manufacturing with confidence and peace of mind. The reimbursement process could be moved to an online portal for greater convenience.

IP development

A large amount of design activity is carried out at the established IT firms such as HCL and Infosys and the captive design centres of Intel and AMD, but there is no local IP held in the country. Encouraging the growth of fabless design companies and software development firms through start-up capital seeding and, possibly through the mooted EDF corpus, could lead to the generation of indigenous IP in the short to medium term. The application of regional language software could provide opportunities considering the expected penetration of computing and connectivity in semi-urban and rural areas; the idea of setting up central government grants for such software development activity at the NITs should be considered.

Component ecosystem

The manufacturing of motherboards and LCD displays for laptops should be incentivized by exempting their individual components from basic customs duty and excise duty, or offering preferential excise duty. Likewise, sheet metal fabrication and plastic moulding are fairly mature technologies in India; hence, the manufacturing of laptop enclosures could also be incentivized too.

Product manufacturing

The challenges that are inherent to the assembly of laptops is that all of the supporting industries need to be present in close proximity so that the finished product can be assembled optimally and shipped to market destinations in its finished form. Unlike desktops, it doesn’t make sense for laptops to be shipped in knocked-down unit fashion and then assembled at market destinations. Considering that the Indian laptop market is import heavy and a fairly sizeable one too, it causes considerable stress on the country’s import bill. Hence, it would be wise to look elsewhere in the electronics ecosystem to address this issue; tablets, for example. However, if a decision to invest in the manufacturing of laptops is indeed taken, then the electronics ecosystem for laptops should be incentivized in a holistic manner to foster the growth of all the supporting industries that are needed to manufacture/assemble laptops in one location.

Current Limitation Solution to Promote Ecosystem

Tax Structure Convoluted process of claiming tax credit Reimbursement process should be made easier to encourage investment in manufacturing and ensure peace of mind for manufacturers Value Addition Lack of feeding activities Manufacturing of motherboard and LCD displays should be offered preferential basic duty and