Canon has opened up its extended warranty program to the channel, allowing resellers to offer longer warranty terms for its digital imaging products for the first time.
Once purchased, the warranty stretches the standard one-year period to three years. The move takes Canon into direct competition with third-party warranty programs offered through retail chains such as Harvey Norman, product manager, Chris Kearney, said.
"There are some third-party providers out there which offer very aggressive pricing, but not the backing of a genuine warranty," he said. "It is a very interesting market to break into and Canon's big enough to absorb the risk."
While he couldn't reveal specifics, Kearney said that the margin on selling the program was higher than those available on hardware. The warranties will be sold via retail stores in a paper pack, the size of a CD-ROM.
Previously sold direct by Canon, the terms and price of the warranty is tiered depending on product value. For items priced up to $499, packs will retail for $99. At the other end of the scale, $249 will extend a product priced between $2000 and $2999. Canon will continue to hold exclusive management of warranties on products over $3000.
Kearney said Canon would also continue to sell extended warranties on products under $3000 if contacted direct by customers, but didn't expect this to be a very big market once resellers began actively selling the packs. He was adamant Canon would keep its warranty prices at retail to be in line with channel partners.
"We will not change our pricing or undercut the channel in any way," he said. "We will keep our prices at the RRP and the resellers can set their own pricing. They have a lot of margin to play with."