Hypertec manufacturing PCs is not, in itself, unique. What is unique is the way the company plans to sell them: via resellers. "Very few indigenous suppliers of PCs have ever entered the reseller channel. However, Hypertec has always used the reseller channel - that's a key part of our overall strategy," said Colin Lillywhite, Hypertec's general manager of Australian sales and marketing.
Lillywhite says Hypertec's primary target for its new line of HyperFormace PCs is the large-buying corporate and government sector. "What we're offering to the reseller channel is quite distinct. We're not seeking to compete with the major, multinational brands - Compaq, IBM, DEC and, to a lesser extent, Apple. Instead, we're competing for that 45 per cent of the market that is owned by indigenous suppliers. This is a major opportunity for resellers to compete with the indigenous brands that are selling direct."
A two-way street
Lillywhite says the scarcity of indigenous suppliers in the reseller channel is a two-way street. He says a lot of resellers have avoided stocking domestically-made PCs because they aren't strong sellers. One reason: lack of brand identity. "With the exception of Osborne, almost none of them have been able to build a brand presence and that's what attracts resellers. Brand names are easy to sell," Lillywhite said.
Andrew Carter, managing director of Melbourne-based reseller Business Computers of Australia (BCA), adds another dimension to the issue: quality. "In the past, the quality hasn't always been there among a lot of the indigenous suppliers," he said. "We've been courted by Optima and Total Peripherals and we've always said 'No thanks'. For that reason we've generally stuck with the 'tier one' products. What I think is going to happen is that the Hypertec PCs are going to allow us to get a place at the table in a way we haven't been able to in the past. I've got great confidence in what they're doing."
John Fisk, managing director of Sentek, a Sydney-based reseller with locations throughout Australia, agrees with Carter. "Hypertec has an excellent reputation inside and outside the channel and I think that will serve them very well - especially in the government sector. Organisations that want to buy indigenous-made product at a certain level of quality are now going to be able to do so. That hasn't really happened before."
Tom Quealy, managing director of Sydney-based reseller Meghead, is sceptical. "A lot of manufacturers try to come in and say 'Look at us, we're doing something completely new', when, in fact, it's the same old thing. Sticking a 'Made in Australia' sign on something doesn't necessarily mean it's Australian-made. Clone computers have always been around," he said. "I'd also be careful making a lot of assumptions about people buying on the strength of a brand name. Price is always going to factor number one. If you can't compete on price, forget it."
Even still, Lillywhite says Hypertec's PC plans have met with strong approval from the reseller channel. "As part of our business plan, we needed to have 30 resellers on board at this point in time," he said. "Right now, we have more than 60 resellers and there are a number of others who want in. They see this as a great opportunity for new sales."
Lillywhite says Hypertec's North Ryde, NSW factory opens on March 1 and is slated to produce 400 PCs in its first week of production. "Our sales projection for the first year is 30,000 units. If we make that, we'll be very satisfied."