HP invites Optus into the PC channel

HP invites Optus into the PC channel

HP notebooks and Optus broadband connectivity are to be sold as a bundled utility service under a new agreement signed between the PC vendor and the country's second largest carrier.

Optus will offer a range of HP consumer and business notebooks, bundled with either its fixed or wireless broadband connectivity, for a monthly fee starting at $69.95. The computers will be sold in much the same way as the carrier would sell mobile phones - the hardware being subsidised by the customer's commitment to a 24-month plan.

The agreement pitches the substantial marketing prowess and retail presence of Optus against HP's retail channel, and if successful could revolutionise the way computers are sold at a retail level.

It's also the latest in a series of deals HP has struck with third-party service providers that bundle connectivity and home entertainment services alongside the purchase of a PC.

In June, it partnered with Optus and Microsoft to bundle wireless push email with its new generation of iPaq handheld devices. A month earlier, the PC vendor began bundling IceTV interactive digital TV subscriptions with sales of its M series media centres.

Bundling has long been the means by which resellers, particularly in the retail market, have differentiated themselves and added value to the meager margins available on PC sales.

Marketing manager for computer buying group Leading Edge, Craig Kirby, said when vendors did the bundling prior to channel involvement, the result was a double-edged sword.

"Some retailers are happy to sell bundles because they just want to sell something," he said. "But there are others who are sensational at up-selling - who might rely on a good price to get people into the store and up-sell from there.

"If you are losing accessory sales, you are not increasing your average margin per sale. As we all know in this business, it's the extras that keep you going."

HP argued bundles promoted sales growth by showing customers what kind of exciting new services they could access with a PC.

"These promotions allow the customer to experience and enjoy the total solution," market development manager for HP consumer desktops, Manpal Jagpal, said.

Some retailers are happy to see the vendor spending its marketing dollars.

"It excites the customer and creates sales," business development manager at Victorian reseller, CentreCom, Ramon Costello, said. "HP tends to market these bundles quite aggressively, and that brings the customer in. We can do the rest."

Jagpal said there was a gamut of additional up-sell opportunities retailers could consider including peripherals, printers, larger displays and additional hard drives.

That said, not all of these necessarily earn the reseller a higher margin or commission.

"The up-sell is not always about margin," Jagpal said. "It's about a better customer experience. We always look at what is best for the customer."

Ideally, Kirby said, vendors should be bundling products that were not directly related to the core product, so the sale didn't hinder a retailer's chances of additional sales.

"Bundling anything that the store doesn't sell itself is a great promotion," he said. "But broadband plans are absolutely something our retailers would be interested in selling. We differentiate ourselves from our competition by being an end-to-end provider."

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