HP, Prion ink exclusive deal

HP, Prion ink exclusive deal

Prion Technology has outgunned rivals such as Tech Pacific and Ingram Micro to secure exclusive distribution rights to HP's Pavilion PCs, in a move it hopes will extend its business in the retail market.

Michael Bosnar, Prion's general manager, said he expects the PCs to bring in over $10 million in revenues between when the deal takes effect on 1 November and June 2000. "The following year we hope to double it."

Bosnar said the Vox Group and Clive Peeters have already signed up to carry the Pavilions, which he admits will see it compete with existing retailers such as Harvey Norman.

It will be a juggling act for Prion to expand HP's distribution without cannibalising existing outlets, but Bosnar said HP is determined to take Pavilion into new markets for the first time, and needed new channel partners to do the job.

"We are managing the channel very closely because we are very nervous, as are HP, that we don't undo the good work that has been done," he said.

The wider distribution marks a change in tactics for HP, which until now had sold its Pavilion units exclusively though a select number of larger retail chains.

HP estimates it already has 30 per cent of the retail home PC market, but the company is keen to take an even larger slice of the action, which this year will exceed 460,000 units, according to IDC figures.

New markets HP is considering include HP staff purchase schemes, rental organisations, mail-order and telemarketing companies, in addition to University Bookshops.

Bosnar said the HP deal would allow Prion to build on its new distribution strategy launched earlier this year, which is underpinned by a dedicated sales team to service the consumer market.

The two companies have a longstanding relationship dating back over seven years to when Prion, then known as High Performance Distribution, was HP's first Australian distributor.

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