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Second Hand PCs : A First Hand Report

Can anyone’s scrapped system, be someone else’s dream machine? Well, this certainly holds true in the second-hand PC market. Just because your PC can’t run the latest game doesn’t mean its trash. It can possibly perform mundane office tasks. Many don’t know this, but there exists a large secondary PC market out there — with its own set of rules of participation and provision. A stream of such so-called obsolete PCs form the foundation of this market. Some consumers frequently upgrade their PCs and sell their old ones in the second-hand market — largely in the metros. A significant portion of these proliferate to rural areas, where people may not have the means or inclination to invest in the latest configurations. Such second-hand machines also find their way to educational institutes, offices, and businesses, in tier II and III cities. A Gartner report states that “one in every 12 PCs in use worldwide is a secondary PC.” An estimated 10 per cent is donated to NGOs and other nonprofit organizations. Let’s try to understand the specifics of the second-hand PC market by answering some fundamental questions.

Why would you want a second-hand computer?

Well the simplest and quickest answer to that question is price! People who buy a refurbished or a second-hand computer generally fall into one of two categories. The first category of people needs a computer for fairly standard tasks such as internet browsing, word processing, spreadsheet work, etc. Applications of this nature have not changed much over the years in terms of the demands that they make on a computer’s resources. Therefore, a second-hand computer which may be a few years old, would be quite capable of running even modern versions of these programs and at a fraction of the price of a brand-new machine. Besides, when you’re running such mundane tasks, a brand new machine can be an expensive overkill. The second category of users might require a machine to do some specific task — as part of an office or a home network — for example an email, a database, or a web server. Again, tasks which an older computer is quite capable of handling.

Gordon Moore, the former CEO of Intel once observed that “the power of semiconductor technology doubles every 18 months”, and so the average computer manufactured today has specifications which dwarf those available just a few years ago. But the resource requirement of day-to-day software has not evolved at the same pace. A computer made three years ago will run office, database, accounting and other mainstream applications, and browse the net, as effectively as the latest PC. This is quite a blessing for small businesses looking to purchase a few additional computers, especially in these dire economic times.

“Well what about durability?” you may ask. Jitu Bhai who is the proprietor of Jitu Bhai Joone Computer has some reassuring things to say. As his company’s name suggests, he deals exclusively in second-hand computers and has been in the business for over ten years. “Computers, although not built to last forever, are certainly built to last. Especially the older ones which had better build quality”, Jitu opines. “[They] almost never break down... if one does fail, chances are that your new PC can also do just that”, says Jitu Bhai. He also points out that it’s a good step you can take to do your bit for the environment. Remember that with very little measure taken for proper disposal of e-waste, most of the redundant PCs in India will be dumped in non-environment-friendly ways. Reuse and reduce is the formula.

Things to keep in mind while buying second-hand PCs
  1. Avoid Branded PCs. Opt for assembled - Branded PCs have customized motherboards which are hard to come by. Their slots can’t accommodate generic components, the SMPS can’t be sourced and numerous other problems. An assembled PC, on the other hand, is easily upgradeable.
  2. Avoid RD and SD RAM – Again, these components are very difficult to source. Even if you can source the RAM, it'll be expensive due to non-availability.
  3. Opt for Samsung and LG screens – These, according to dealers, are the most reliable and they have a wide service network. Like most things Chinese, avoid Chinese monitors.
  4. Operate the PC to check if it’s in working order - Look under the hood for components that are within warranty. For example most hard disk drives come with a 3 year warranty. Also check for bad sectors in the hard disk.
  5. Check to see if the cooling fan is working properly - Any abnormal whirring noises could mean it has gathered dust and needs cleaning.
  6. Give the specs a thorough look to make sure they match with the ones advertised - Go to Settings > Control Panel > System > Device Manager to check the listed features.
  7. Try to get original documentation - Receipts always come in handy.
  8. Avoid Celerons - No explanation required!
When you are the seller

When most people sell off their computers, they do a simple formatting of their hard drive. This is certainly not enough. They put themselves at risk of being defrauded or of having their identities stolen because many disks are not properly wiped of data. Second-hand computers are a potential treasure-trove of personal information, and can be exploited to devastating effect. Professor Martin Gill of the University of Leicester and his team, in a study purchased six second-hand computers from various sources and conducted a forensic data-analysis on each one using off the shelf computer software. They discovered half had not been securely wiped. In one case, there had been no attempt to wipe the contents! Make sure you use a data-shredding software on your most personal files before selling your PC. A good data wiping software is Erase v 5.3 which can be downloaded from http://www.tolvanen.com/eraser/download.shtml

Where do these PCs come from?

As we pointed out earlier, one source is the home user, probably indulging in a two-year upgrade cycle. But another important source of these PCs are large companies that have regular update cycles. Companies operating in verticals such as IT, telecom, banking and finance, where the criticality of IT infrastructure is very high, experience a high churn for PCs that are phased out more rapidly. It is here that the technology obsolescence factor essentially acts as a driver for the secondhand PC market. Until recently, banking and finance companies could easily afford to be slightly frivolous. Faisal of Star Infotech, which operates out of Lamington Road and deals in second-hand PCs puts it well — “large companies will routinely go in for a yearly revamp in hardware and sell the old computers to dealers for near scrap value.” However, he is quick to add that “most of my stock comes from home users”. Faisal is now looking forward to expanding his sales reach by targeting SMEs that require 15 to 20 computers for routine work. Jitu Bhai also offers some interesting insights. “A lot of pieces come from customs where auctions are regularly held to get rid of unclaimed or seized goods. Big businesses are a good source but we get their used computers indirectly, through large PC suppliers who are required to buy back hundreds of PCs from their clients as part of exchange schemes”, says Jitu Bhai. Another source is imports. Some may frown and call it e-waste dumping, but large quantities of high-end used computers find their way to Nehru Place in Delhi and secondary markets in Kolkata. These PCs are usually leased by rental companies abroad, and after a pre-defined deadline are considered redundant. Of course, they are far from redundant. Many of Jitu Bhai’s components come from PC manufactures who keep standby pieces of components to cover replacement guarantees. The buffers are quite high and many pieces remain unused, and find themselves in the secondary market.

Why does it make sense for SoHo’s?

According to Jitu Bhai, the propensity to buy second-hand PCs for offices is less in the Metros. This is because the gap between new and second-hand has narrowed over the years. Yet the thumb rule remains that a secondhand machine can be bought at half the price of a new one. As per current prices, a decent second-hand PC can be bought for Rs. 6,000 to 8,000 as opposed to a new entry-level model for around Rs. 13,000. This translates to Rs. 5,000 saving on just a single PC — if your business requires more than five PCs, you are looking at a substantial saving.

People in the metros also have several hang-ups regarding after-sales service. Anyone trying to rubbish the entire second-hand business PCs should know that most of the players offer some form of warranty. The warranty period may range from a week to a month and most secondary sellers offer maintenance contracts through partner firms. Most don’t offer on-site warranty, but are happy to service the faulty components if you’re willing to bring the equipment to their office. Many others go by the axiom, “Walk out of the door and it’s your responsibility...” Avoid these guys.

Tier II and tier III cities are more open to the concept of used PCs. Mr. Goyal, a cybercafe owner in Jaipur had started off with three PCs that he bought from Jitu Bhai. He has now expanded to fifteen and is perfectly satisfied. A woman in Mira Road, who does not wish to be named, has several second-hand computers that form the back-bone of her small medical transcription business.

Where do you start from?

Your friendly neighborhood assembler should be able to get you a good deal or at least get you in touch with a second-hand seller. You will also find players like Jitu Bhai who have their own web site (www.jitubhai.com) that offer components, as well as fully set-up PCs. If you pick up in bulk, most suppliers will offer some form of discount and either a preferential or an enhanced after-sales service. A simple Google search will net you results on web sites like Indiamart. Remember, some people will have no qualms about calling a spade a spade — in this case, a second-hand PC. But the euphemisms are aplenty — pre-owned, used, and refurbished are some examples. All these terms can be quite confusing and certainly interchangeable. Although refurbished ideally implies that the computers have been thoroughly serviced and faulty parts have been replaced by the dealer. Most dealers do this anyway, so even if the computer has been lying in a dusty office basement, it’ll look like it’s in a fairly decent condition.