Dell’s India Pricing Mantra – If They Can’t Afford It, Charge Them More

I’m looking to get a new laptop ASAP as my current Acer Aspire 9412 has decided to make my life miserable by shutting the LCD down completely, and also petrifying a hinge to the extent that it’s broken off a chunk of plastic from my cover. So anyways, since I had been warned just over 3 months back by Acer that the hinges might be a problem, I took out some extra protection and extended the warranty to 3 years. All good, or so I thought. It turns out that Acer has an International Traveller’s Warranty, not an International Warranty. What that means is that you’re entitled to 3 years of service in the country you bought the laptop, and also for UPTO 90 days in any country you visit and have a problem. Now, the problem is that I wasn’t informed of the 90 days clause until today, and my 90 days just expired 10 days back. So the good news is that I have the warranty to cover the breakages, the bad news is that I have to go back to Malaysia to get it fixed.

So, I need a new laptop otherwise I have to wait until my next trip to Malaysia, which is out of the question since I haven’t a clue when that is. Having this Acer warranty experience firmly in mind, I decided not to fool around with companies like Acer, HP/Compaq, Toshiba, and focused on Dell, IBM and Apple. I’d called all three and checked that when they say “International Warranty” they mean “International Warranty”. Now, the Apple would have been my first choice, except that it costs an arm and a leg. Same with IBM. So I decided on Dell. Now, always looking for the best deal, I talked to my dad in Malaysia this morning and he said that Dell had some really good deals on the market. So, I logged onto the Dell Malaysia site and started configuring a nice Inspiron 6400 with all the bells and whistles, and most importantly a 3-year complete warranty for about RM4,900, or about Rs.58,000. A bit steep, but the bulk of the cost is in the warranty, so its worth it.

When I configured the exact same spec on Dell India, the configuration cost came to Rs.86,000 or so, a premium of almost Rs.28,000 or 48% on the Malaysian price. Here’s the spec in detail for you to try out for yourselves:

Intel(R) Core(TM)2 Duo Processor T7200 2GHz, 4MB Cache, 667 MHz FSB
Genuine Windows Vista(TM) Home Basic 32 bit (English)
3 Years CompleteCover (Asia Pacific Regional Coverage Only)
Artic Silver with Alpine White accents on a black base
15.4″ Wide Screen XGA TFT Display with Truelife(TM): 1280×800
2GB (2 X 1024MB) 667MHz Dual Channel DDR2 SDRAM
256MB NVIDIA(R) GeForce(R) Go 7300 TurboCache
120GB SATA Hard Drive
Internal 8X DVD+/-RW Combination Drive with dual layer write capabilities
McAfee(R) Security Center(TM) 8.0 – 15 Months OEM (English)
Dell(TM) Wireless 355 Bluetooth Module
Intel(R) PRO/Wireless 3945 Dual Band 802.11a/g 54Mbps Wireless Mini Card
65W AC Adapter
9-cell 85Whr Lithium Ion Primary Battery
Dell(TM) Large Backpack
A/V Cable Kit

Now I did some homework and found that if I had this machine bought in Malaysia and then shipped to me by Fedex or DHL, the duty component is only Rs.10,000. And the freight is around Rs.5,000. So for an extra Rs.15k, I can get the shipment here in an extra 3 days, and still save Rs.12K. I can even save that if I get someone to carry it with them when they come, which is my preferred choice.

Feeling extremely belligerent and eager to make someone at Dell’s life miserable, who wouldn’t feel like that after finding out about this kind of bare-faced robbery, I called Dell’s Customer Service number in Bangalore to find out if they could explain why this kind of disparity exists. So, when I asked this chap why the cost of the exact same spec in India was Rs.28k more than in Malaysia, he gives me a mini-lecture on a new-fangled pricing theory invented by Dell.

It goes like this. Apparently, the difference in price is due to the difference in purchasing power in Malaysia and India. So, I asked him, “Ummm… Is India’s more or less?”, to which the response is, “India’s is less, sir” “Yet you charge them more in India?”, I ask. He retorts, “Yes sir, that’s right.” I didn’t proceed any further as I could tell this chap was getting very testy with my questioning.

So, according to Dell, if the people in a country have a lower purchasing power, you make the products more expensive in that country. Shouldn’t things be more affordable in a country that has lower purchasing power to appeal to a wider audience??? Apparently, in the Dell’s world, in the IT industry actually, the answer is no. By this theory, a loaf of bread in India should be more expensive than in Malaysia, which it isn’t. Apparently, since everyone in the IT game benefits from this, no one bothers to reduce prices to attract a wider market. And I find that this pattern repeats itself in many markets, including automobiles, electronics, household appliances, etc. I still remember a funny story of a time when my cousin and his wife visited my folks in Malaysia. He went nuts and bought 4 or 5 electric rice cookers cause they were dirt cheap in Malaysia compared to India, something like RM40 or Rs.450 in Malaysia compared to over Rs.1,500 in India. Imagine! Rice cookers!

The real irony here is that Dell laptops sold in India are actually assembled in and shipped from Malaysia. So, Dell’s product cost is the same for both India and Malaysia, but there’s a huge difference in the retail price. I can accept a difference if there’s a difference in your production cost, but how can you justify jacking the price up if the costs are essentially the same? Ok, they may tack on 10% for import duty, 5% for freight and handling and all that for India, but how does that explain the remaining 33%? Isn’t there already a profit margin built into the system in the Malaysian price? Is the Dell brand worth so much that it justifies a 33% price premium? I don’t think any brand is worth that much, when there so much competition in the market.

No wonder Dell is trying to enhance its presence in India so aggressively. They’re milking the Indian population bone-dry and laughing all the way to the bank. It’s criminal that the Indian public is so misinformed that they’re willing to pay so much for products that are essentially over-valued. FYI, all memory manufacturers offer a lifetime warranty on RAM. In India, the retailers only give you a 2-5 year warranty. Ask your retailer next time, he’ll say its cause there’s no proper distributor in India for RAM, which is total bullshit. It’s cause they want you to buy more RAM.

So, back to my predicament. I’m getting the machine ordered in Malaysia and brought along the next time someone flies over here from there. I think I can wait a few weeks to save over Rs.25K. I’ve already converted my Acer into a quasi-desktop so I can still work at the office. The only thing is that I have to learn to live without a laptop at home for a while. Might be an interesting exercise in self-control. I might have to stock up on books to read. A lot of books.

For those of you interested in buying a Dell or any computing equipment in India, but not willing to pay Indian prices, let me know. I might be able to help you to save some money by getting the kitting done in places like Malaysia. After all, a good entrepreneur is always on the lookout for new venture opportunities. By the way, I’m extremely serious about this offer. ‘Course its limited to people I know, or people referred by people I know, or people who are really really desperate, and can show proof of desperation… whatever that is…

Note – 27/6/2007: I’ve got a few requests upon people reading this post to do this import of laptops as a business. I’ve got no issues with helping people by advising them how to save some dough, but I’d rather not get into the whole legal ramifications of doing this as a volume business.

The Voters Dilemma – Free Broadband, Free TV or 40,000 Blowjobs

Got your attention with the title didn’t I? Well, what triggered all this was the Indian Government recently announcing plans for a scheme to provide Free Broadband to all Indians by 2008. I’d come across it briefly in the papers, but didn’t pay much attention to it until a buddy of my posted a mini-rant on this at his blog. Here’s the link.

Quite frankly, I’m getting sick of hearing about the outrageous promises that politicians make in order to get elected. No surprise there, I know. It’s what politicians are and do. But, just once, I wish they’d use the vacuum between their ears for something practical, rather than frivolous. Even Alice in Wonderland, with its white talking rabbits, cheshire cats, smoking caterpillars, people made of cards, and magic mushrooms, is more believable that some of the rot that escapes from the mouths of politicians. Anyways, on with the rant.

Now as Ram questions on his blog, why doesn’t the government focus on stuff like free food, free potable water, free education more rather than a stupid gimmick like free broadband. Look at the numbers. India is a land of 1.3 billion people. The number of Internet users today in the country is less than 100 million, or less than 10% of the national population. Furthermore, there are only around 25 million broadband users today. Check the TRAI website for the actual numbers. Ironically enough, its this section of the population that can afford a computer, has proper food, shelter, education, etc. So why the heck do they need free internet? They can afford to pay for it.

Speaking as one of the 100 million potential beneficiaries of this scheme, I wouldn’t say no to free broadband. But, I’d rather they reduced the tariffs to encourage more people to get on the Net, rather than offer it for free. ‘Cause they’d have to finance it somehow and the only way would be through taxation. As it is, we’re getting taxed for almost everything. So, I for one would like to avoid another tax somehow, and am still willing to pay for the service, only I would prefer if the costs weren’t so steep.

The Internet economy in India is just taking off. More and more people are becoming increasingly reliant on the Internet and are investing in broadband connections to benefit from the fast speeds, always-on connections, etc.. But the cost of Internet Access is on the higher side compared to other countries. In Malaysia, for example, an unlimited 1MBPS broadband connection is available for RM77 per month, or Rs. 925 per month. The cheapest comparable plan in India costs Rs. 3600 per month or approximately 4 times more. If the Indian government could take steps to reduce the cost of Internet access to say maybe twice what it costs in Malaysia, then more people would sign up for the service, and the government wouldn’t have to shoulder the a huge financial burden in making the net more accessible. This is how I would approach this anyway. This way, its an achievable task rather than an complete load of bullcrap.

Doing some very rough number crunching, the average broadband bill in India is approximately Rs. 500 for 256k limited connection. An unlimited 256k broadband connection is about Rs. 1000 per month. Let’s assume that the government decides to offer unlimited 256k for free. It doesn’t make sense for it to be free and limited. So with approximately 15 million current broadband users in India today, of which about 85% would be in the 256k bracket, your cost of providing free broadband to this group is about Rs. 1,275 crore per month [15 million x Rs. 1000 x 85%] , or Rs. 15,300 crore per annum. Where the heck would you get that kind of money??? I doubt taxes would cover that cost. Ok, so this isn’t the cost of providing service but its the amount that is being subsidized. The actual cost of providing this service would not be that high. Even if its 50% of the subsidized value, its still over Rs. 7,000 crore, and thats money I’d prefer going towards more useful things. I’d rather see this kind of money invested into reducing our petrol prices or shoring up electricity generation, stuff that would really improve my living standards. How does free internet do that? What the heck do you do with it? For a desi, the average browsing pattern is check email, read the news, get on Orkut, browse porn, check mail, check dating/matrimonial site, Orkut, porn. Not very productive is it??? So why encourage that lifestyle even more?

Getting back to Ram’s main point, he states “While I see all the comments on the feasibility of implementing it or of this being a simple election (national elections are in 2009) gimmick, no one is talking about the fact that there are so many higher priority problems in this country that should be tackled first.” India has some really serious issues it has to tackle like basic education, sustained power generation to meet demand, potable water, food, clothing for the poor, the list goes on. Yet, the general public still seems to be swayed by empty promises like free broadband, free tvs, etc. Sometimes you really have to wonder how the public can actually vote for such imbeciles when said imbeciles clearly have lost the plot. I mean you can claim ignorance as an excuse once, but this kind of crap has been happening for over 50 years now. You’d think people would have learnt by now.

A case in point is the last state election in Tamil Nadu. The current DMK government was swept into power last year after they promised free TVs and free cooking gas connections to each household. Cooking gas is fine, people need to eat. But free TVs??? I mean come on guys. People are struggling to make ends meet and put food on their tables, and you give them TVs? How’s that going to help them live? By turning into mindless zombies addicted to the idiot boxes, who end up scheduling their entire lives around TV??? And what about the extra burden on the already faltering power infrastructure? Why can’t you invest more into stabilizing the power grids? Unfortunately all these facts and reality checks are irrelevant to politicians. The net result is that a year on, the DMK is in power, the free TV and gas plan is in shambles with only a small fraction of population actually receiving the goods, and the voters are no better off than they were before. Life goes on for them as it did before the election, despite the empty promises of the government they voted into power.

This free broadband crap is the same deal, only on a national scale. Some jackass wants to get some publicity so he decides to announce this scheme. And he’s probably never even used a computer before in his life. The problem is that politicians, particularly in India, believe that its grandiose schemes not practical substance that wins elections. So they make outrageous claims and promises to get elected, and once elected may or may not actually deliver on the promises. All I can say is I hope they just remember what happened to Chandrababu Naidu in Andhra Pradesh a couple of years back. He was celebrated as the model IT-savvy Chief Minister, and people raved about his efforts to use IT to modernize the bureaucracy of the state government. But despite all the acclaim and recognition, he still lost the elections because he didn’t act when a really bad drought hit Southern Andhra Pradesh. For all his panache and media savvy, Naidu neglected the basic needs of his voters, who felt he didn’t care about them and consequently didn’t vote for him.

So, a warning to the powers that be. The Indian voter is not a predictable lackey. You can’t really predict how he/she will react. Rather than trying to woo them with glitter and giving them horse-shit in the end, try to actually do something constructive for them. They’ll remember that, and not the horse-shit, and love you for it in the long run, rather than turn on you in the next elections. You’re better off doing the practical and achievable, rather than the showy yet impossible.

On a lighter note, it looks like other countries are learning from Indian politicians about making empty promises. A Belgian politician actually campaigned for the Belgian Senate by promising, “I’ll give you 40,000 blowjobs.” Here’s the campaign website if you don’t believe me. Given the fact that she looks pretty hot and is nude in the ad, you can’t help wondering how many voters, especially male, would’ve said no to that particular campaign promise. Plus she also added that she was willing to travel anywhere in the world to keep her promise. I guess she really was keen on catering to a wider audience. Talk about putting your mouth where your money is. She even calculated that at a rate of 80 blowjobs a day [80??? Assume 6 hours for sleep, an extra 4 for breaks, lunch, showers, mouth rinse, etc... that leaves 14 hours, so that comes to just over 5.7 blowjobs an hour, or one every 10 minutes...], it would take her 500 days to fulfill her “obligations”, and even went into details on dos and donts for the blowjobs. Take a look at the website if you’re curious. Must warn you though. It can be considered NSFW.

Wonder of wonders, it was later reported that she failed to live up to her promises, and sent a Japanese assistant to perform the “dirty” work instead. El Reg had a good story covering this here.

I dunno bout you but at least the Belgian gimmick was appealing. ‘Course, that’s cause Tania has the looks to pull it off. Can you imagine if it this happened in India and that was one of our female politicians???

Disclaimer: I’m not responsible for any trauma associated with readers mentally imagining female Indian politicians such as Jaya, Mayawati, Sonia, etc. in place of Tania Devereaux. It’s your own damned sick fantasy, so you deal with it.

Why India Should Say No To US Nukes

The more I read about this hoopla about the pending India-US nuclear co-operation treaty, the more I find myself wondering why India needs this deal. Let’s get a few facts straight first. India needs to harness nuclear energy to be able to meet its electricity needs for the future. No other alternative to current fossil-fuel based power technologies provides as much bang for buck today. Alternative energy sources like solar, wind, or tidal energy are too nascent to be able to provide the kind of mass energy production needed to match India’s increasing hunger for electricity. As it is, the current infrastructure is barely able to meet demand, and brownouts and power outages are increasingly occurring throughout the country.

Having said that, I don’t think the US nuclear deal will really help us move forward to meeting our growing energy needs, despite what our politicians would have us believe. If you take a look at the current nuclear technology used for power generation in the US, all of the 104 commercial reactors in use today are based on either pressurized water reactors (PWRs) and boiling water reactors (BWRs) designs. The last commercial reactor commissioned in the US was in 1996. The Nuclear Authority of India already has several nuclear power installations that are based on PWR and BWR technology that have been in operation for over 10 years. So, doesn’t that mean that we already have a lot of the know-how we’re supposed to be getting from the Americans now?

US technology still has its roots in the cold war ethos of dual-purpose reactors, energy and plutonium production. But, we’ve already got military nuclear capability so we don’t need that. And we already have the ability to build PWR and BWR reactors. So, just what are buying? What exactly are we getting from the Americans thats so valuable?

I don’t think this deal is about nuclear technology, but more about money and the US selling more military hardware to the India. Nuclear technology is a deal-sweetner being offered by the Americans to coerce India into signing the deal. After all, US nuclear power technology can be considered somewhat ancient.

What really gets my goat is when you consider how becoming dependent on US technology seriously weakens our national and economic security, which is contrary to what our “exalted leaders” say on how it will strengthen India. US nuclear technology is primarily based on using uranium ore as the raw material for nuclear fuel. This is fine for the US maybe since Canada is the largest supplier of uranium ore in the world [and we know that Canada is a quasi-US state in all practicality.], so they are assured supplies. Unfortunately for India, we have no significant reserves of uranium anywhere within our borders. Plus, we have a hostile neighbor in Pakistan so obviously friendly sharing of resources is out of the question, even if Pakistan had uranium reserves, which they don’t. So we’d have to import uranium from countries like Canada and Australia if we intend to use US technology.

What we do have is thorium, and plenty of it. It’s estimated that at least 25% of the world’s thorium reserves are inside Indian borders. What’s so special about thorium? Thorium is a radioactive ore considered by many to be an alternative nuclear fuel source to uranium, with the added benefit that it actually is a more efficient fuel for nuclear reactions, and produces less plutonium and other highly radioactive byproducts. If you’re interested in the mumbo-jumbo, check out the Wikipedia reference to thorium. The downside to thorium is that the ore needs to be processed more extensively than uranium before it can be used as nuclear fuel, making it more expensive.

But here’s where we need to starting thinking in a bigger picture. India has been conducting extensive research on building thorium-fueled nuclear reactors for years. In 2005, India unveiled its revolutionary “A Thorium Breeder Reactor” (ATBR) in Mumbai capable of producing 600MW for 2 years without any refueling. The design was specifically tailored to enhance the safety of the nuclear reactor. It was even proclaimed “The World’s Safest Nuclear Reactor”. [More details on the ATBR can be found here.]

For the past 50 years, we have relied on indigenous solutions to our nuclear problems, even in the face of international obstacles and opposition. Should we seriously consider throwing all that away just because we’re being “allowed” access to US technology? Especially when the basic raw material needed is not even available in India and has to be imported? Yes, thorium might be more expensive to process than uranium. But, it’s easy to obtain and since it’s indigenous the cost of transport and handling is reduced significantly. So it could work out to be as or even less expensive than handling uranium ore.

But the main advantage of going this route is that it safeguards our national security and economic interests. Just consider how easy it would be to cripple India if there was an international embargo on shipping uranium to India and we were running nuclear power stations based on US technology and uranium? It’d be like kicking us back to the Stone Ages with the flip of a switch. By denying us uranium, they could cripple our power grids, and our economy would grind to a halt. By using an ore that is available locally, we ensure that no outsider can interrupt the supply of fuel that will drive our country forward. Our esteemed politicos might want to listen to the local boffins doing thorium research before kowtowing to the “great Americans”. Jeesh, you’d think we were still ruled by the frigging Westerners.

But you got to hand it to the Americans. They’ve taken an asset with diminishing value, i.e. their aging commercial nuclear technology, and are using it as a major carrot to sell more military hardware. For that’s really what this whole stupid treaty is about. If you read some of the fine print and press about this so-called “breakthrough in Indo-US nuclear relations”, you’ll see that as part of the deal that the Americans are expecting India to place orders for over US$5 billion for conventional military equipment for a start, with future purchases also expected.

It’s obvious that the US wants to divert India’s allegiances away from countries like Russia and China, who have more in common with India strategically than the US does. And they’re using our pathetic Indian fascination with all things American to try and maneuver our “enlightened leaders” [read as “bulbs”] into committing us to a relationship that diverts Indian taxpayers money into American coffers, coerces us to abandon over 20 years of indigenous research which is more suited for our particular geography, and above all puts us in a position where the controlling factor to our national wellbeing is in the hands of outsiders.

I wouldn’t be this upset if this was more of a two way street. And I’m not normally so xenophobic. But this is so patently biased in favour of American interests you have to wonder why our government is actually trying to pursue this. Yes, there may be things that I am not aware of. But from a layman’s perspective, it just looks like a really bad deal for India. And I want my government to justify it to me before they accept it. Especially when there are more beneficial alternatives to this deal, why is our government insistent on pursuing it?

Nuclear power does not contribute significantly to Indian’s current electricity output today. But, it is being touted as the way forward to meeting the electricity demands of tomorrow. With that in mind, I believe that nuclear power is an essential part of our national infrastructure, and needs to be treated as a national security issue to ensure that India truly does benefit tomorrow from it.