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Editorial: Engaging in guerilla warfare

Editorial: Engaging in guerilla warfare

Whatever problems we face in business, or indeed life itself, there's always more than one way to skin a cat. The challenge of competing against branded hardware heavyweights (see page 1 of the October 4 edition of ARN Magazine) has seen local manufacturers employ one of two tactics - transition the business to introduce a greater focus on services or tackle them head-on in a price war.

The first of these two approaches looks to be the most popular and sensible. ASI Solutions, for example, has spent the past couple of years shifting away from a hardware approach and now considers the provision of PCs, notebooks and servers as an add-on to its services business.

Although essentially still a hardware manufacturer, Optima has also been making moves to beef up its services in an attempt to differentiate itself. Multinational competitors like Acer and Dell are hungrily eating away at its traditional public sector contracts. In reality, it is harder for Optima to disentangle itself from the hardware battle and it will have to rely on regional strength to stay competitive. ASI is also playing that card and will look to work with the multinationals as a service provider where possible - if you can't beat 'em, join 'em.

Pioneer Computers is taking an altogether different line and attempting to punch its weight in the price war. It launched a $799 notebook earlier this year, which matched prices being offered by HP and Acer, and operations manager, Jeff Li, is convinced pricing is still the first criterion on government purchasing checklists.

In trying to keep costs down, Li said he had been buying Intel processors and Microsoft operating systems from overseas because of the massive pricing breaks being offered locally to branded vendors. Intel and Microsoft both make positive noises about the importance of local builders but, as Li pointed out, they need to redress this pricing imbalance sooner rather than later if that channel is to survive.

While there are clear differences in the approaches of whitebox manufacturers, one similarity is that they are all trying to push the envelope when it comes to new technologies. Pioneer has ruggedised notebooks that go head-to-head with Panasonic Toughbooks and a line of ultra-mobile PCs; ASI claims to have one of the smallest PCs in Australia. Like guerrilla fighters, it is the skirmishes around the central battle where they will continue to be most successful.

On the consumer front, a handful of local builders will pit their wits against the world's best in an attempt to develop a sexy media centre PC (see page 1 of the October 4 edition of ARN Magazine). While this is surely an oxymoron, the $1 million bounty Intel has put on the table might just inject a bit of life into a market that desperately needs it.

The chipmaker has been very vocal with claims that its Core 2 Duo processors will lead to smaller and more stylish media centre designs. In the next six months, we should finally see models that will look at home in the AV stack. But only a fool would bet against the winner of Intel's competition coming from anywhere other than China or Taiwan.


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