Will it be all white on the night? August saw competition heat up once more in New Zealand’s bustling notebook market. As you can read in today’s paper, Korean electronics powerhouse LG is the latest big name to offer a portable range in this country. LG’s brand may not be as well known here in New Zealand as elsewhere in the region, but it still has widespread consumer recognition. Those of us with long memories will recall its former incarnation as Lucky Goldstar — younger readers are probably familiar with the company’s cheesy ‘life’s good’ tagline. Whether consumers can be persuaded to buy information technology from a firm better known for making domestic appliances remains to be seen. LG’s notebooks are competitively priced when compared with similar quality products from existing brands. Earlier in August Fujitsu PC appointed Morning Star to push its notebook range into the corporate sector. We reported this on the front cover of our 25 August paper. The Fujitsu story got second billing to Synnex’s Verified by Intel programme; another major notebook play. As Richard Harri, the company’s country manager, explained, the Intel programme is designed to help local assemblers tailor custom-made notebooks known as whitebooks. It does this by reducing key components to a limited set of building blocks that can be pieced together in various combinations to meet a customer’s exact needs and budget. Intel’s Lego-like approach to whitebook customisation is quite radical and relatively high risk. Whitebooks are the notebook equivalent of white boxes — locally assembled custom made no-brand computers. These have been more popular in markets other than New Zealand, where there’s been a long history of high profile distributors running into trouble — anyone out there remember Computer Imports and the Ellis brothers? White boxes account for a roughly 15 percent share of local sales — in other countries they have approached 50 percent of the market. The fortunes of white box manufacturers have ebbed and flowed depending on the activities of major brands. Right now, brands such as Hewlett-Packard and Acer are on the rise and white boxes are in retreat. Local assemblers have never really performed well in the notebook business. But the notebook business is growing much faster than the desktop business. So part of the current market swing back to traditional brands can be accounted for by the rising popularity of portable computers. Which is where Mr Harri and his whitebooks come into play. Could they, with help from Intel, help local assemblers win back market share from the international brands? To some extent the answer lies with the power of Intel’s brand. If consumers buy into the Verified by Intel marketing campaign then perhaps the tide will turn once more in favour of the smaller manufacturers. This is in doubt. Intel may be well-known, but its badge is a little more tarnished these days than in the past. A huge injection of marketing funds could help. Another big question mark is cost. Intel’s Lego-like construction approach allows third party component manufacturers to contribute blocks. This should create a strong supply, plenty of choice and keep prices competitive. But how will these advantages stack up against the big guy’s ability to pile ’em high and flog ’em cheap? Whatever the outcome, there’s one real positive: moving notebook competition into a higher gear should stimulate the market. We can all drink to that.
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