ACCELERATING convergence between home entertainment and IT should further fuel growth at Renaissance, says managing director Paul Johnston.
The distributor has just announced a bumper half-yearly result, crediting Apple’s iPod for part of their success, but Johnston says the best is yet to come.
Total operating revenue for the six months was $51.1 million, with after-tax profits of $777,000, an increase of 14.4% over the previous corresponding half-year.
Apple’s iPod, Johnston says, is performing better than expected and its shortages are a global phenomenon. Back orders have taken six months to clear and similar shortages of the new iPod exist, but people who place their orders now, should get their devices for Christmas.
The iPod has been a “growth factor” for Renaissance, but “we had a good result on all our brands” he continues, either meeting or exceeding their targets.
Two years ago, Renaissance restructured its product offerings, dumping high-profile but low-value contracts like FujiXerox, in place of exclusive distribution agreements. Renaissance’s brands now include Apple, PalmOne handhelds, FileMaker, Macromedia, Juniper Networks and ASUS notebooks.
Johnston credits such exclusivity over a smaller range of products for part of his company’s claimed success. Renaissance, he says, develops the brand for a product in New Zealand, adding value for vendors, rather than just shifting boxes like some of the major distributors do.
While the overall IT market has been “up and down”, Johnston claims his company is in growing markets; such as handheld PDAs, the education sector, networking devices and multi-media. Renaissance is not “a big player” in the “struggling” OEM sector, he says.
The distributor traditionally enjoyed higher sales in the first half of the year as education sales tend to take place early on, Johnston explains, but the overall strength of its markets means Renaissance expects further growth in the second half of 2004.
And beyond that, there is “huge potential for further growth” from new technologies and products, Johnston declines to identify.
“There will be a blooding of the market, a convergence of technology between home entertainment and IT, and this will accelerate,” he says.
An example of this, Johnston adds, is that some 65% to 70% of iPods are sold to PC users, suggesting there is a much larger market for its musical devices for Apple to address.