Notebook sales overtook desktop PC sales for the first time in New Zealand during the third quarter of 2005. Total PC shipments increased by 20% on the previous year. And a good chunk of that business went through the channel.
Joanna Burgess, HP marketing manager PCs and channel, says lower prices have attracted home users and small to medium enterprises (SMEs). “HP has a wide network of resellers across the country so it’s been able to take advantage of the huge growth in sales to the SME sector,” she says.
Callum Eade, Toshiba country manager, says a solid proportion of sales went through resellers, with the rest divided between education and retail channels. “It was a big year. You had a declining retail price, an unprecedented increase in consumer sales and an influx of notebook vendors,” he says.
While Eade concedes margins have fallen, he says things need to be seen in perspective.
“Economics would lead you to believe that margin reduction is a bad thing but the reality is you end up selling more units.”
However, the price-aggressive market is having an impact on local notebook assemblers.
Liam Gunson, IDC hardware analyst, says in order to survive, build-to-order (BTO) businesses will have to adapt to market changes.
“There is no whitebook [generic notebook] market in New Zealand so assemblers will have to look for an alternative revenue stream such as services, peripheral sales or even reselling branded notebooks,” he says.
John Gould, Ultra Computers director, agrees competition is fierce.
“We’re finding a good market but obviously would like to be doing more volume. As it is we try to keep out of the low end because we simply can’t compete on price,” he says.
But, he says, Intel could yet provide a silver lining. “Intel is extremely conscious of its channel and has some interesting BTO initiatives that could help turn things around.”