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Editorial: A long road to travel

Editorial: A long road to travel

While Intel's Viiv looks certain to be an important milestone in the development of the digital entertainment PC concept, its launch has left a lot of local system builders with a real short-term headache (see page 1 of ARN April 26 edition).

In a nutshell, several have complained they now have a big pile of pre-Viiv Media Center PCs gathering dust in their warehouses. That is a painful financial hit for companies operating on such skinny average margins.

The only way to shift these boxes now is to slash prices, which is ironic when you consider they were being touted by many as a way of building some profitability back into the ailing PC channel. Even then, major retailers won't touch an entertainment PC with a bargepole unless it is sporting a Vivv badge, according to Altech sales manager, Kevin Hartin.

And who can blame them? Retailers are bound to be keen on investigating new ways to crack the potentially lucrative digital home market. After all, Microsoft's Media Center Edition has not opened too many doors since it was launched in Australia 18 months ago.

Microsoft executives continue to put a brave face on and insist sales are in line with expectations but how many people do you know who have bought one? While I wouldn't pretend my friends and family are any kind of yardstick for technology buying habits, I still don't know a single person outside of the industry who owns a Media Center PC.

Any hopes that the recently launched Xbox 360 will kick sales along look forlorn too. The gaming console may well act as an extender in conjunction with a Media Center PC but most buyers would still have to fork out for a new computer first. That still doesn't seem very compelling to me when you consider the price tag involved. Viiv will help but the digital entertainment PC still has a long road to travel.

In other news, the diversification strategies being pursued by Bluechip Infotech (see page 4) and Synnex (see page 10) are further proof that the wider PC channel is still doing it tough. Both distributors have announced they will look to improve their standing with corporate resellers in the year ahead - a move partially designed to reduce reliance on corner-store resellers that still concentrate on shifting boxes and have very few services built into their business model. A product shift is also well underway for both companies, with IT and telecommunications convergence the most important driver.

Finally, a thumbs down goes to Citrix Online for announcing it was pulling resellers out of a two-tier model without telling the distributor in question, itX (see page 1). Its Asia-Pacific managing director, HR Shiever, said the decision to revert to a single tier had been taken at a global level. While this means his hands have largely been tied, the failure of local executives to communicate this message to itX was disappointing to say the least.

Although the companies had only worked together for six months, and the vendor's seeming reluctance to grow its channel meant it was unlikely anybody at itX would be crying themselves to sleep over the decision, the distributor still had a right to expect better lines of communication.


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