Channel slow to grab convergence opportunities
- 29 September, 2005 22:00
IT seems that although consumer electronics (CE) and digital convergence products are enjoying a high profile, many traditional IT resellers are yet to jump on the bandwagon.
Rob Kester, distribution director for Legend, says many in the channel are missing out on good opportunities and margins of up to 30%.
“IT resellers have a knee-jerk reaction to anything new and those that are onboard are few and far between,” he says.
While Legend started in memory products Kester says his company has steadily moved into CE and this year launched its own brand of CE products including LCD televisions, portable DVD players and a personal video recorder.
“The strategy is to take the best of what Legend does and mix it with a sourced product, that way consumers get leading-edge Japanese specifications at a Korean price,” he says.
Because Legend designs, manufactures and distributes its own products it effectively cuts out the middleman and lowers the cost of items.
“Legend has over 800 resellers in New Zealand and delivers them consistent products. On top of that the company invests heavily in research and development.” Earlier this year Legend broke the A$100 price barrier with its set-top boxes, currently being trialled by TVNZ.
“We’re hearing that New Zealand will be ready for digital media within the next two quarters. Our products are priced for the lower budget and quite frankly the Sonys of the world can’t match us on price.”
Peter Carr, Forrester Research country manager ANZ, agrees.
“The digital home is about consumer behaviour and experiences, not technology. Within that market the focus is less about the brand and more on price. Look at the way Dell is selling TVs as an example,” he says.
Carr does sound a warning note to CE companies, accusing them of lagging behind in order to increase market share rather than boost market growth.
“Retailers are also falling behind in terms of potential strength in the digital home. To survive they will have to move into service provision of digital services and provide experience zones within stores.”