Can the price cuts continue?
Despite prices having fallen immensely in the PC marketplace this last 18 months or so, the competition remains as intense as ever. PC trade publications have reported that Michael Capellas, Compaq's (www.compaq.com) CEO, has told analysts privately that he is less then enthusiastic about continuing the PC price battle. According to Merrill Lynch analysts, the plan now is for no further price cuts this summer from Compaq, and sales staff are being told to walk away from deals where the price gets too low. Talk about a change of heart. Only two months ago, when the company announced a summer price offensive - in response to Dell (www.dell.co.uk) and HP's (www.hp.co.uk) early summer price cuts - the firm slashed just under a third off the price of some machines and promised to stay competitive in the face of rival pricing. Capellas' comments have been met by `summer sale' offering around 100 pounds off several Dell machines, and a raft of price cuts from HP on its NetServer machines, ranging from 3 to 22 per cent. Can the price cuts continue? Yes, but not if resellers can hope to turn a profit on the sale of hardware on its own. More than ever, resellers need to get into value-added territory, leaving the box shifting to the box shifters.
Fujitsu waves goodbye to the ICL name
Almost a decade after the Japanese giant Fujitsu acquired ICL, the company has announced plans to phase out the brand name by March of next year. The move is a major one for ICL, which is now the UK's third largest IT software and services operation. The gameplan is to rename the firm Fujitsu. This won't come as a shock to the firm's resellers, as they've been calling the company Fujitsu ICL for some time, but it could shake some major customers up sufficiently for them to look at the competition. The same thing happened last year when Mitsubishi phased out the old Apricot brand name that had been around since the early 1980s. 3Com did something similar in the late 1990s with its US Robotics brand name - the list goes on and on. It seems that giant US and Far Eastern firms don't factor in the brand loyalty that many UK companies have towards older brand names. Granted, such loyalty may well be misplaced, but what the marketing men call `brand loyalty' is a major profit earner for many UK companies.
Some sections of ICL will remain away from the main Fujitsu rebranding, however, as the Japanese giant has commissioned a team of marketing consultants to come up with a new name - incorporating the Fujitsu brand identity - this September.
Computer 2000 to offer same-day licensing
Computer 2000 is planning to offer same-day licensing to its resellers, in a bid to persuade them to stay loyal. Previously, software licenses took almost a week to arrange, meaning that business customers had to wait for their complete systems, despite the fact that the hardware was in stock at the dealer. The move is made possible by hooking dealers up to the distributor's electronic data interchange (EDI) system, which runs across the Internet. Some experts have questioned the need for near-instant licensing, but the `instant satisfaction' seen in walkaway PC purchases in the leisure systems sector may yet be seen in the business marketplace. The move is important, as it means that dealers can at last value-add a system before dispatching to the customer while the ink is still drying on the contract. It also shaves away the advantage that direct-sell vendors such as Dell and Time have in terms of box availability.
Tiny launches `Touch & Buy' kiosk service
Tiny Computers has come up with an interesting take on the way the public perceive Internet pricing to be cheaper than retail. The direct-sell retail vendor has launched a `Touch & Buy' service in its stories, allowing shoppers to buy digital entertainment products and PC related accessories on the high street at Internet prices. The move to introduce 'Touch and Buy' comes as Tiny started diversifying in business and expanding its new product portfolio, recently launched in March. The new interactive system enables customers to order products by following simple instructions on a touch-screen computer with a swipe card facility for taking payments. Goods are then delivered within the following 3-4 working days. Tiny's Marketing Director, Neil Stevens, said that some consumers still have concerns about Internet security, and until now, they have had to stump up the heavy mark up our high street competitors dictate. `Tiny has tackled this problem by launching `Touch and Buy', which will ensure we can bring to market more digital entertainment and PC related accessories at unrivalled prices,' he said. The kiosks, which are being installed nationally at Tiny's showrooms, are essentially a repackaging of the firm's products, which have always been fulfilled by mail order. Perhaps more importantly, however, it allows staff in the showrooms to concentrate on high value products and value-added transactions, leaving the sale of accessories and low ticket items to self-service.
IBM offers credit facilities to resellers
IBM has announced it is offering credit and direct purchasing facilities to resellers wanting to pitch into the small-to-medium-sized enterprise (SME) marketplace. The idea is to allow value added resellers (VARS) an alternative to the standard IBM distribution channel when they require non-standard credit terms and conditions. The move comes 12 months after IBM started selling PCs and servers direct to VARs, so bypassing distributors who may not be interested in low volume sectors such as the SME marketplace.
ICL, 0044-1753-604736 (GB), www.icl.com;
Computer 2000 UK, 0044-256-847505 (GB), www.computer2000.co.uk;
Tiny Computers, 0044-1293-827302 (GB), www.tiny.com;
IBM, www.ibm.com