Need for low-cost PCs drives Linux in India

Aiming at India's volume PC market, two vendors this week launched entry-level products that run Linux and are priced at about $230.

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Backing these initiatives is the country's minister for communications and information technology, Dayanidhi Maran, whose aim is to increase PC penetration in the country.

Currently, 15 million people in India own a PC and there are 5 million Internet connections in the country, according to Maran. The aim of the Indian government is to increase the number of people owning a PC to 75 million and the number of Internet connections to 45 million by 2010. To achieve this objective, the country needs low-cost PCs, said Maran at a launch Monday in Chennai, commenting on a $230 PC from HCL Infosystems Ltd., a large PC vendor in Noida, near Delhi.

Maran also noted that the Indian government will be setting up an open-source center in Chennai to develop open-source software to get around the high cost of proprietary software, Maran said.

"The response that the HCL PC is getting is phenomenal," said Ravi Pradhan, country manager in India of Via Technologies Inc. in Taipei. At Indian Rupees 9990, the cost of the new Linux PC from HCL breaks the Rupees 10,000 price barrier that is important to attract the mass market, Pradhan added.

HCL's $230 PC uses a processor from Via in Taipei, while Xenitis Infotech Ltd. in Calcutta launched this week a PC priced also at about $230, which runs Linux on a processor from Intel Corp.

In May, Encore Software Ltd. in Bangalore introduced three models of Linux-based computers that retail at between $222 and $333 depending on the configuration.

Microsoft Corp. rolled out in India in June its Windows XP Starter Edition, a low-cost, stripped-down version of Windows XP for emerging economies. But some of Microsoft's partners, like HCL, are of the view that offering Linux is the only way to arrive at the $230 price point.

By using Microsoft's Windows XP Starter Edition, it was not possible for HCL to offer a PC at $230, said an HCL spokesman. "Linux is free, while the Starter Edition has a price tag to it," he added. HCL also offers PCs that run the Windows XP Starter Edition, as well as Linux PCs that run on Intel processors.

"The Starter Edition has its limitations, such as the hardware configuration that can be used and the number of applications that can be run at one time," said Pradhan. "The competition at the entry level is between Linux and a pirated version of the full version of Microsoft Windows."

By September, Via expects to introduce its Terra PC, a set of reference designs for low-cost PCs, that will first be rolled out in India. HCL is one of the licensees for these reference designs, based on Via's processors and chip sets, that will enable vendors to offer PCs priced at about $230, according to Pradhan.

The PCs will be offered with Linux, although they will be certified to also run Windows, according to Pradhan. By adding the Windows operating system and office suite from Microsoft, the price of the PCs will more than double, he added.

Microsoft expects that product value will, in the final analysis, prevail.

"We are committed to helping India bridge the digital divide, and making our offerings more affordable is a key initiative to this end," said a spokeswoman for Microsoft India. "In creating low cost products, we need to ensure that there is no compromise in the value they offer," she added.