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Optima goes after digital home market

Optima goes after digital home market

Optima is planning to make heftier investments in the digital home concept and expand its services arm to overcome declining PC hardware margins.

The decision follows the release of its full-year financial results, which saw the manufacturer register net profits of $1.3 million on sales of $129 million. The result represents an 11 per cent increase in total revenues compared to last year, as well as an 8.6 per cent rise in net profits. Optima experienced an 84.9 per cent drop in profits in the first half of the year, recording just $198,000 on revenue of $55.5 million. At the time, the sharp fall was blamed on the loss of lucrative NSW government business.

Chairman and managing director, Cornel Ung, said the company traditionally performed better in the second half of the year recording up to 60 per cent of its sales in that period. Larger desktop rollouts for the NSW Department of Education and Training (DET) and its counterpart in Queensland this calendar year also contributed to the improved sales results, he said.

Optima's total overall product shipments rose by 12 per cent, with desktop systems experiencing modest growth. Notebooks however, were the star performer, growing by 59 per cent.

"This year, we expect notebook sales will grow to be about 25-30 per cent of our total business," Ung said. Currently, they accounted for 20 per cent of sales.

But he said pricing pressures in the PC market would continue to impinge on its margins. As a result, the company was strengthening its services skills, as well as putting more effort into the digital home space. This would include expanding its range of CE products, as well as wireless connectivity goods.

"We will develop a channel to commit to the digital home solution," he said. "We plan to work with them to define the concept of a home outlet shop."

While Optima currently had regional partners, it would also actively recruit metropolitan-based players for the task, Ung said.

But he warned it didn't expect to see revenue from its digital home products until the latter half of 2006.

"Digital home is at its beginning - we are still waiting on the new platform from Intel early next year," Ung said. "But we are working on promoting its identity with our channel."

Optima would use its cash balance of $6.5 million to fund investments into more staff and resources for the push, he said. It would also work on developing applications, such as security and VoIP for consumers.

A stronger year was also expected across its services management and procurement business, Ung said. The company has secured a place on the newly established notebook panel supplier's list for the NSW Department of Education and Training next year. Previously, the department had grouped desktops and notebooks under the one supplier list. Optima will join HP and Apple.


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