Resellers recover from bundle failures

Resellers recover from bundle failures

Australian PC assemblers are optimistic low cost PC and Internet bundles still represent an opportunity despite less-than-spectacular results achieved by vendors pushing the model.

After an initial rush, "cheap PC deals" bundled with Internet access offered by the likes of Tandy, Harvey Norman with ISP Eisa, and Myer/Grace Brothers with Optus, have lost some of their appeal, according to a number of industry observers.

However, Telstra looks likely to stimulate the market this time after one source, who asked not to be named, reported it is expected to roll out a new program bundling Big Pond Internet access with "a number of tier-one PC suppliers as well as at least two local PC builders."

Local PC assemblers contacted by ARN last week indicate a potential bonanza still awaits if they can get the right package and price combination.

In addition, those late to market with the low up-front cost model have the advantage of avoiding the early marketers' mistakes pitfalls.

One such early promoter was Compucon, which recently heralded the launch of its zero dollar PC (ARN page 1 June 16), but "held back" after the release of other bundled deals in the market.

According to Phillip Tran, sales and marketing director for Compucon Australia, the company is still keen to move into the retail space, and to do this it is working on achieving the right price point.

"Without subsidisation, the bundled PC is currently priced around $75 a month and that's not good enough," Tran said. "Our target is to achieve a price of $40 - $50 a month and we're doing some other things to subsidise the cost of the hardware. He said that there are several issues to be addressed besides the price, including the service standard of the ISP, a guarantee of performance and the implications of the GST could turn out to be the biggest issue of the Internet bundled PC business. "They [the current bundles] have muddied the water and people have started to realise that it's not a good deal," he claimed.

Another local assembler eyeing the bundled market is Impact Systems Technology (IST). Managing director Peter Agamalis said that consumers know about the Internet now. "The tier -one manufacturers have been supplying entry-level systems for first-time buyers and bundling them with two or three year Internet agreements, and with the way Intel is releasing new processors, the systems are well outdated before the contract is completed." Like Compucon, IST is preparing to join the fray, but with the benefit of the hindsight of the recent market events. "We expect to be releasing a package through our resellers soon," Agamalis said.

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