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Disties: Convergence a long way off

Disties: Convergence a long way off

Convergence is the buzzword being used to describe the imminent crossover between IT and consumer electronics (CE). But IT distributors - even those with dedicated CE divisions - are maintaining integration of the two is a long way off.

Westan, which launches its CE division this week, is one of the first to formalise an interest in areas outside of IT. Managing director, Victor Aghtan, said CE would remain a separate route to market for some time.

"It's happening very slowly - it will be at least three years before IT players begin to understand CE," Aghtan said. "Audiovisual retailers are strongly entrenched in the home space. It makes it very difficult for IT people to play in that market - we have a lot to learn."

Ingram Micro business manager, Rodney Thorne, agreed convergence of the two channels was still in the early stages.

"There are not enough educated consumers out there - this is the early adopter stage," he said.

"Broadband and Microsoft's Media Centre software should be driving this but they haven't kicked in yet."

Ingram was not going to launch a dedicated business unit for CE, but would prepare each individual business unit separately to handle crossover products, Thorne said.

"We're evaluating specific offerings from overseas, but for us to be profitable they have to hit critical mass," he said.

The long-awaited release of Microsoft Windows XP Media Center Edition in Australia later this year is expected to drive adoption of PC-based home entertainment products. But already a trickle of media centre-style products has started to appear in the channel.

Altech's Maestro PC - manufactured by the distributor and showcasing full entertainment centre qualities such as a terrestrial television tuner card and six-channel audio - should see the distributor attract new partners in the audiovisual (AV) market, sales director, Safa Joumaa, said.

"We are now teaming up with AV resellers," he said. "I believe it's time IT crossed over into that field.

"We are building our brand using products such as this. The high-end AV retailers are our new target."

HiTech Distribution marketing manager, David Hein, said he was also currently trialling similar boxes.

But despite the efforts of dist­ributors to get onboard, end-users were still in dire need of education about the use of such products.

"People have to understand how these products work - otherwise it becomes just another gadget," Hein said.

"Vendors are ramping up the output of these machines and they're eager for us to tell our customers about them. But sometimes people are unsure what you're supposed to do with them."

Tech Pacific has so far blazed a trail into CE through deals to distribute PlayStations and recent partnering with game developers UbiSoft and Electronic Arts.

The current market reminded Tech Pacific's manager of systems and peripherals, Josh Velling, of the evolution of IT.

"Service wasn't bundled with technology 15-20 years ago in the IT space," he said. "There is so much opportunity now and the AV vendors are starting to realise it. The IT channel can bring to market a whole level of new products, and well as the skills to sell it."

Sydney-based high-end AV retailer and service specialist, Len Wallis Audio, has received calls from IT dist­ributors looking for a new way to deliver its products.

The company has recently partnered with Tech Pacific.

"We've been approached by numerous people that are developing media centre PCs," managing director, Len Wallis, said. "A lot of these people are as confused as we are. There is a fair amount of crystal ball gazing."

Traditionally, the IT market relies on low margin products with revenue being made on the ongoing service, support and upgrading of the unit.

Conversely, the AV and CE resellers often install for free and make money on the equipment.

"How we are going to service these products is the biggest hurdle we'll have to overcome," Wallis said.

"Where we're going is more service intensive. Education will become the key issue. Business models will have to develop. There are going to be some casualties, no doubt about it."


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