Hardware not dead, but pick the right niches

Hardware not dead, but pick the right niches

As margins progressively diminished and unit shipment numbers shrunk across a variety of hardware categories in the past couple of years, resale prospects appeared to offer increasingly little value.

In recent times the hardware proposition has become more and more unattractive, but there are now some encouraging signs of life for at least the latter half of 2010.

Globally, IDC predicts a modest recovery in servers and storage despite continued economic uncertainty. Closer to home, the Asia Pacific PC market grew 19 percent last Q2 (ending June), with a strong interest in portables.

Here in New Zealand, the analyst company saw local PC refreshes begin to emerge midway through last year, while the latest figures for Q3 2009 show quarter on quarter growth in shipments for the first time since the second quarter of 2008.

Printers were another product category to get a boost in Q3 2009, with a quarter on quarter rise of 4500 units after several quarters of decline.

Although IT budgets are set to remain tight this year, and the recoveries in some categories haven’t taken them back to the levels they experienced two or more years ago, pockets of growth potential exist.

You will most likely know that tablets are tipped to be the next big thing when it comes to PCs. This was evidenced by Apple’s big reveal last week of the iPad. As US technology writer Mike Elgan recently pointed out, the tablets’ ability to accommodate e-book reading and HD video playing should make them a drawcard with consumers.

Apple’s tablet release also evidenced that the vendor shows no sign of losing its knack for giving consumers what they want. Despite the amount of copycat products, anything beginning with ‘i’ seems to offer strong sales potential, at least in the period closely following its release. IPhone and iPod accessories makers’ products are increasingly being taken up by distributors in New Zealand, showing their strength as an additional sale.

One US analyst predicts a stellar year for global Mac sales in 2010, while by the middle of last year, Apple held the local number four spot in PC vendor rankings for both notebooks and desktops.

Meanwhile, resellers’ approach to printer offerings is gaining smarts amid recognition that selling the hardware and walking away is not enough. HP acknowledged this with new certifications for its printer channel members recently, incorporating rewards for end-to-end management of print requirements that includes parts, support, services, consumables management, workflow and billing.

As infrastructure refreshes become possible for some firms this year, an encompassing view by vendors of each customer’s overall strategy and sustainability aspirations should be considered. This will avoid a piecemeal approach to one-off product purchases.

Intelligent bundling also offers revenue potential for hardware — even if it’s just making sure peripherals and a carry bag are sold with a notebook, or that the hardware/software/security mix is right for buyers.

Many column inches have been devoted to the technologies that offer growth potential this year, with cloud computing, mobility and social media prevailing.

Accordingly, hardware that supports the development of these should be top of mind. This includes equipment for building datacentre capacity and efficiency, and devices that allow the secure and effective use of social networking.

Additionally, resellers should be aware of leasing and financing schemes available to customers who are proceeding with post-recessionary caution on procuring IT equipment.

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