THE channel is set to meet head- on the aggressive pricing of PCs and laptops by retailers, which has lured business customers away from traditional resellers.
The channel is arming itself for battle against such deals, says John Dunbar, Ingram Micro managing director. “The channel has felt the pinch from aggressive retail deals, but is beginning to fight back,” he says.
In its arsenal is a desktop that Dunbar says resellers will be able to sell at $999, while still making a decent margin. “The machine will be made available to the channel within a month.”
Last year saw various PC vendors working feverishly to extend their reach through retail outlets, with some busting the $1000 price-barrier on desktop PCs.
Dell entered the retail market for the first time with a $999 desktop at The Warehouse, while Acer appointed Farmers as a new retail partner for notebooks and desktops, and Toshiba made a concerted push with its notebooks.
Preliminary figures released by IT research firm IDC New Zealand show PC and laptop retail sales soared in the last quarter of 2003, with 204% more notebooks sold through retailers than in the same period in 2002, netting $56 million in revenue.
According to IDC hardware market analyst Liam Gunson, various factors contributed to the rise in sales, including the high New Zealand dollar and increased consumer confidence on the back of the buoyant property market.
However, the lower price of the hardware was a significant contributor, affecting sales of notebooks in particular. “Demand for laptops increased as their prices dropped,” says Gunson.
While he expects the majority of laptops in the retail sector were sold to small or home businesses, Gunson says IDC’s figures do not show what proportion of retail sales could be attributed to this market. “I estimate that it would have increased in Q4 due to aggressive pricing through retail,” he says.
Gunson cites a current promotion by Pacific Retail Group in which a Packard Bell PC is being given away with the sale of an NEC laptop at $2999 through its Noel Leeming, Bond & Bond and Big Byte stores.
Dunbar does not regard the PRG offer as a great threat, saying it will attract only a niche market of people interested in buying both a notebook and a desktop.
Ingram Micro distributes Acer, but Dunbar says the company has not lost out in the vendor’s direct supply to Farmers as it has not historically supplied retailers.
Falling retail desktop prices in the final quarter of 2003 is reflected in IDC’s figures, which show that although 9500 more units were sold than the same period in 2002, revenue was a 1% less at $89 million.