Netgear Eyeing at Niche Areas of Home and SoHo Networking

Netgear may not be as popular as Cisco Systems or D-Link, but one must remember that Netgear is one of the pioneers of connectivity over power lines. In the month of June, the company launched 200 Mbps Powerline HD Ethernet Adapter (HDX101) and Kit (HDXB101). The Powerline HD Ethernet Adapter enables consumers to seamlessly connect a personal computer, digital video recorder, game console or other Ethernet-ready device to their home network. It distributes high-speed, high-performance, affordable broadband throughout the home, without the need to run any cabling between rooms. Patrick Lo, CEO, Netgear, says, “Netgear is committed to providing its customers with the best possible networking and Internet connectivity solutions.”

Founded in 1996, Santa Clara, California-based Netgear is a leading designer, developer and vendor of networking products for home users and small businesses worldwide. The company’s product offerings enable users to share Internet access, peripherals, files, digital multimedia content, and applications among multiple personal computers and other Internet-enabled devices. Its Ethernet networking products include switches, network interface cards, adapters and bridges, peripheral servers, such as print servers and disk servers, and VPN firewalls. Netgear’s broadband access products comprise routers, gateways, IP telephony products and wireless gateways. The company’s network connectivity products include wireless access points, wireless network interface cards and adapters, media adapters, and Powerline adapters and bridges.

It sells its products primarily through traditional retailers, online retailers, direct market resellers, value-added resellers and broadband service providers primarily in the US, Britain, Germany, and Asia-Pacific. It has a huge network of distributors across Europe and Asia and more than 6,000 retailers in these regions.

In the entire Asia-Pacific, India is one of the fastest growing geographies. For Netgear, this market is also quite significant. Traditionally, the company was operating in India remotely through the distributors, but later it appointed regional managers – Atul Jain and Kerman Rana for east & north and west & south, respectively. But in the beginning of 2006, the company had appointed Yogesh Sharma, Country Manager. Yogesh worked with D-Link in various capacities. Just before joining Netgear, Yogesh was working with D-Link India as Vice-President (Enterprise).

Recently, VARIndia interacted with Yogesh to know his perspective of Netgear business in India. According to him, India is certainly a growing market for LAN equipments, the market size of which should be close to US$290 million. Switching is the segment, which is growing very fast. For the networking vendors, broadband and telecom are the major growth areas.

It being a major player in the mall business and home market space, Netgear positions its products quite strategically. The company’s strength is better RMA processes, immediate replacements of the faulty products, clear and channel-friendly policies, personal touch with customers and partners, apart from the standard warranty.

He adds, “Netgear worldwide is known to be a channel-focussed and channel-friendly company which we are replicating here in India. Every quarter, we announce our innovative products for this segment keeping ourselves the first organization to launch the products.”

Netgear has three distributon partners in India that include Delhi-based Advent Electronics, Bangalore-based Cyberstar Infocom and Mumbai-based Rashi Peripherals.

As the company’s products are technology driven, Netgear enables the partners with educating them about the technology and the products. This helps them to understand the customer requirements better and sell better. Netgear also helps the partners to earn extra incentives through various incentive programmes to make them profitable.

The company is very strong in wireless networking. It has the entire gamut of products, including wireless routers & gateways, wireless access points, wireless Ethernet Bridges, wireless adapters, wireless multimedia, wireless print servers, wireless kits, etc. Sharma says,

“Wireless is catching up as a concept very fast. Security is no more a concern, but I feel it will continue to gain acceptance to complement the wired technology in the SMB market. The home segment is embracing the wireless much faster.”

In India also, B- and C-class cities are growing pretty rapidly. Looking at the opportunity, Netgear has strengthened its presence in these places. Sharma adds,

“We have our distributor’s presence in most of the B- and C-class cities capable of handling all aspects of services and logistics.” Another area where every vendor is investing is development of integrated products, which carries capabilities of wireless, routing, switching and security as well. From Netgear perspective, Sharma maintains, “We do understand the requirements of this segment very well and this is why we recently came out with a few integrated products.”

Even though the company has the best products and expertise, still there remain challenges for the company in the Indian market. The number one challenge is the price. The user wants the best quality product at the best possible price. Secondly, he needs to be educated about the usability of the product. And, last but not the least, there is a demand for service support – both pre-sales and post-sales. Now, with Yogesh and his team’s presence in this market, to some extent, the issue can hopefully be resolved.

Finally…

Netgear is a company with a lot of promises. It is rapidly expanding in the niche areas of new technology including home storage gear and a new phone designed specifically to work with Skype’s free peer-to-peer Net-based calling service. In the year 2005, Netgear clocked a sales figure of $449 million worldwide, which is expected to grow 18 per cent this year. Netgear is registered on NASDAQ and the stock is traded at $8.92. And, India, being a growing market, will surely have a substantial contribution to the turnaround. According to Yogesh, as a company the target is to grow by 125 per cent in this financial year.