Also more multinational brands are waiting in the wings to enter this segment as it posted an impressive 70 per cent growth in the first quarter of 1999, according to a survey by US-based agency, International Data Corp (IDC).

Multinational brands registered a growth of about 45 per cent in the first quarter in the segment, which is at present dominated by genuine Intel dealers (assembled units) and domestic players like HCL and Zenith.

The growth potential has made these players introduce the latest models at competitive prices with Compaq last month introducing its `Presario 4010' at below Rs 50,000 to take on H-P's `Pavilion 4402'.

Though H-P is tight-lipped on its next move, officials indicate a slew of marketing initiatives and further price cuts forPavilion.

"Our Pavilion range would contribute more than 50 per cent of our consumer product turnover for the current fiscal which is about 20-30 per cent of our total turnover," vice-president consumer products, H-P, Ravi Agarwal, told PTI.

Presario has the advantage of being an early entrant in the market as it was originally launched in 1995. H-P, which recently broke its joint venture agreement with HCL, launched its Pavilion range only this year.

However, the IDC survey rated H-P high on brand awareness and its ability to synergise its marketing efforts with its other products. For instance, H-P is offering a printer free with Pavilion.

"We want to be the market leader in the MNC segment," general manager marketing, Compaq, Suchi Sarkar, said.

Compaq is offering Presario 4010 through 15 exclusive outlets and planning 12-13 more such outlets in the next few months, she added.

The company has also stepped up its after-sales service with its tele-support service apart from appointing trainedconsultants in all of its exclusive stores, she said.

Both Compaq and H-P are competing with Indian brands which are about 20-25 per cent cheaper and have strong after sales support, IDC said.

The MNCs claim that their products offer high quality and features other brands do not have.

Assemblers or gids are the runaway leaders in the home PC segment with a marketshare of 71 per cent, followed by HCL (9.1 per cent), Zenith (nine per cent), Compaq (3.6 per cent), Vintron (2.3 per cent) and Wipro (1.9 per cent).

"Presario 4010 has been designed specifically at our Singapore facility to suit Indian needs and the price we offer is in line with our global strategy to enter the low-end segment," Suchi said.

H-P, however disagrees. "Compaq has slashed its price after we entered the market. We were one of the last MNC brands to enter. Compaq is reacting to us," a top H-P official said.

H-P also claimed that Pavilion is sold through 50 exclusive outlets unlike its rival Compaq which has only recentlystarted selling through exclusive stores.

According to IDC, the total number of PCs shipped in 1998-99 were 8,45,000 and 200,000 out of them went into homes. This is going to increase as the main driver for PC sales would be children's education and internet, it added.

H-P already offers 10 hours of free internet including registration with Pavilion while Compaq is planning promotional schemes to promote e-commerce.

Though both H-P and Compaq are tight-lipped about targeted sales, unless volumes are generated the brands are not likely to sustain.

According to the IDC survey, price will be an important issue, but brands will start playing an important role once the market becomes large enough.