Consumer electronics and cabling products will replace memory as the key local profit driver for Legend Corporation over the next 12 months.
Referring to the company's financials for the full-year to June 30, Legend CEO, Bradley Dowe, said that while overseas markets had contributed to its memory business, the Australian market had been flat. The memory manufacturer and distributor recently reported a net profit of $6.7 million for the past financial year, up from $3.9 million in the previous year. Revenue also rose by 13.4 per cent to $201 million.
"The fact of the matter is that in our most traditional market, memory, the second half of last year was a flat one," Dowe said. "Australia is a more mature market and while everyone might be considering a PC upgrade, they are very selective about it."
In comparison, strong memory revenue had come from countries that had yet to mature such as South Africa and China.
"Demand for memory there is strong, so adding those geographies has actually protected us from the cyclic issues of the local marketplace," he said.
"The memory business is still there, locally, but it depends on major market trends and we don't see growth in mature markets like Australia until new products like Windows Vista launch to drive that growth."
To make up the difference, Dowe is betting on new areas of business to make up the shortfall. Following its acquisition of local electronics house, Cable Accessories, Legend is now offering 2500 different products in the local market ranging from extension cables and surge protection plug boards on the Cabac side through to thumb drives and other flash media products such as MP3 players under the traditional Legend brand.
While new product lines, such as MP3 players, would be suitable to a wider channel, Dowe said Legend would begin pushing them out via its traditional memory resellers.