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PC manufacturing giant Hewlett Packard (HP) has bagged the contract from the Uttar Pradesh government to supply 1.5 million laptops. The laptops price at Rs 19,058 per unit will be provided to students who have passed XII standard during the 2011-12 academic year.
HP was competing with PC makers such as HCL Infosystems, global majors Acer, and Lenovo for the contract. HCL, Lenovo and Acer had quoted a price of Rs 21,983, Rs 23,919 and Rs 25,199 respectively.
The state cabinet meeting chaired by chief minister Akhilesh Yadav here approved the proposal to issue letter of intent (LoI) to HP India Sales Private Limited for the bulk supply. An email sent to HP, declined to comment on the development.
The total supply is worth about Rs 2,858 crore. The state had already made a provision of almost Rs 2,800 crore for giving laptops and tablets to students passing class XII and X respectively.
The delivery of laptops would be under strict schedule as mentioned in the bidding terms. The laptop would comprise 14 inch screen, 2 GB memory, 500 GB hard disk, one year warranty and support three languages viz. English, Hindi and Urdu. Under the original bidding terms outlined by project consultant KPMG, the vendor was required to provide almost 1.8 million laptops complete with backpacks within 210 (7 months) days of the award of contract.
HP win follows suit of Chinese PC maker Lenovo, which bagged a similar project from the Tamilnadu government last year. This also allowed the Lenovo to emerge as one of the largest PC manufacturer in India. This contract might help HP as it has been losing market share
Analyst predict that such government projects will see stiff competition from PC makers who have been witnessing slower consumer demand globally and in India. According to Manufacturers' Association for Information Technology (MAIT), only 10.8 million units of notebook and desktop computers were sold in the country in 2011-12 -- 8.5% less than what the industry body had projected earlier.
"For HP that has been hit by several negative news especially the personal systems group, this is about gaining market share based on volume growth. These kind of deals help you leapfrog your market share. What will be seen is the margin levels that HP is playing. That too when the dollar-rupee is not too favourable for the PC makers," said Sumanta Mukherjee, lead analyst for computing device at CyberMedia Research.
Last year, the Tamil Nadu government had awarded a contract to six vendors for supply of 9,14,000 laptops under the first phase its free laptop programme to the students. However, some of the vendors who were shortlisted for the project subsequently expressed their inability to supply the devices within the stipulated date and as per the quoted price citing supply bottlenecks.
In the second phase, Electronics Corporation of Tamil Nadu Ltd (ELCOT), the implementing agency of the TN government free laptop programme had floated a tender for supply of 7,24,000 additional units of laptops. The process for short-listing of vendors for the second phase is currently underway. The laptops that were offered in the first phase of TN government project approximately cost about Rs 16,500 per units as these were having basic configurations.
More to come
The breakup for laptops and tablets under the UP government budget was roughly Rs 2,400 crore and Rs 400 crore respectively. Since, the cost would overshoot the allocation, the government would need to provide for extra funds for the tablets, wherein over 2 million students are eligible. The bidding process is on for tablets.
The UP government has also floated a separate tender to procure 2.6 million units of tablet PCs which will be distributed to class-X students, in the first phase.
The laptops would be given to students, who had enrolled themselves for higher education. It includes pupils passing through the madarsa education system.
