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Notebooks take lead in monster June

Notebooks take lead in monster June

The end of financial year rush has historically made June a happy time for the channel, but it has exceeded all expectations in 2005. While the bean counters are still adding up the numbers, several industry figures contacted by ARN were in no doubt that records had been smashed.

Although hardware margins are not getting any fatter, a boom in demand for notebooks has been a source of success for many in the channel. And companies focused on the security and storage markets have never had it so good.

Intel raised industry hopes back in April when upping its financial predictions due to ongoing strength in the notebook market across geographies and channels. And its confidence looks to have been justified.

Acer marketing director, Raymond Vardanega, said the PC maker had celebrated its biggest Australian revenue month in May but would comfortably set a new benchmark in June.

"June has been massive," he said. "SMB, government and home have been the best performing segments, with all three showing some amazing uptake of notebooks."

IT Wholesale exceeded internal targets by about 70 per cent, general manager, Darryl Tucker, said. From a product perspective, he also pointed to notebooks as a star performer and predicted the bullish mood in the industry would spill over into the new financial year.

"It's been fantastic - June is the best month we have ever had and July is crackling along at about the same pace," Tucker said. "We have a lot of big rollouts on the books where the first order has gone through in June but the rest is scheduled for July."

ChannelWorx managing director, Scott Lidgett, said June had been more than 50 per cent better than in 2004 for the security and networking distributor. He pointed to the public sector as a major end-of-year spender.

"It's been a typical end of year in the corporate sector but it always surprises me that government departments have money left to spend," Lidgett said. "We have done a handful of nice deals with state and Federal government during the past month."

But although slightly surprised by the June rush, he said its sales pipeline had been indicating a strong finish to the year since April.

"Most of the business we have done in June was forecast so it hasn't been a bolt from the blue," he said. "Having said that, this is a bigger uplift than we have seen in June for a couple of years and it will probably be a record year for us by the time everything is counted up."

Storage integrator, XSI, has enjoyed an exceptional 12 months, according to CEO, Max Goldsmith. Its revenues were up more than 35 per cent on the previous financial year, he said, largely due to its increased focus on services.

"We are doing a lot more consulting and looking to provide solutions instead of selling product," he said. "Customers love the fact that the factory doesn't own us because we can offer the best of what's available rather than pushing our own brand."

Goldsmith said XSI took more orders in May than it had in any previous month, which had translated to a bumper installation month in June. Although its own financial year runs until September, Express Online has also enjoyed its best month, beating sales from June last year by more than 60 per cent.

General manager, Alison McQuarrie, attributed the stellar month to improved sales across categories.

She said MYOB, Adobe, Netgear and Microsoft had been its most successful vendors during the month. McQuarrie also estimated the distributor had seen a 40 per cent jump in reseller applications during the past six months and had 50 per cent more registered resellers than it did a year ago.

Synnex managing director, Frank Sheu, predicted sales of $50 million for June, which would make it the distributor's biggest month ever. This would be its third record month in the past six, he claimed. May was also exceptionally strong.

"PCs, peripherals and printers are all going well," Sheu said. "Feedback has been strong from OEMs, computer shops and the mass retailers." Microsoft partner director, Kerstin Baxter, said the software giant was well on track locally to achieve its aspirations for the financial year.

"Partners have been excited about the end of the financial year and the prospects for next," she said. But despite the general excitement, not everybody has seen their end of financial year numbers jumping off the chart. Bluechip Infotech managing director, Johnson Hsiung, estimated his company would record sales of $11 million in June. While this would be an increase of about 8 per cent on June 2004, it had needed to ship significantly more product.

"I think we have doubled notebook sales in the past six months [compared to January-June 2004] and have also seen a 30-40 per cent increase in LCD monitors," Hsiung said. "But falling unit prices saw optical drive revenues drop by about 30 per cent even though we maintained volumes." In addition to falling prices, he cited a general downturn in economic confidence and the proliferation of year end specials from competitors for the modest improvement Bluechip had recorded.

In the security market, Lidgett said there had been no need to use a bargain basement approach to stuff deals through.

"The vendors we work with have not been offering special pricing - they are hitting their numbers so there has been no incentive for them to do that," Lidgett said.

For the financial year ahead, he was confident the security market would remain buoyant.

"We are seeing some signs of conservatism, because deals are taking longer to get over the line, but there is still a strong incentive to buy," Lidgett explained.

"Security is no longer an elective spend. Australian compliance laws are not as strong as in the US but companies with American parents or partners are still keen to address these issues."

Acer's Vardanega said the vendor would be looking to capitalise on big opportunities for storage area networks (SAN), projectors and its new range of LCD TVs during the next six months.


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