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Editorial: Jostling for position

Editorial: Jostling for position

The consumer and small business market takes centre stage in this week's issue, with major hardware brands and retailers jostling for position in the fastest growing segment.

First up, ARN heard Big W was advertising Toshiba notebooks with a recommended retail price of $1500 for less than $1000 (see page 1). At first, this sounded like the Japanese vendor had turned up for a party while everybody else was putting their coats on and getting ready to leave.

After all, Acer broke the $1000 notebook barrier six months ago. While it initially saw a huge sales jump, which soon saw it mimicked by Dell and HP, all three vendors have since concentrated on moving away from the sharp end of the market. This is a trend that will have attracted support from big retailers like Harvey Norman, Dick Smith and Officeworks. Harvey's general manager of computers and communications, Rutland Smith, has previously expressed concerns that vendor pricing has been too focused on gaining market share. This, he has argued, left little room for anybody else in the supply chain to make a dollar.

When contacted, local Toshiba boss, Mark Whittard, said Big W had sourced the product through distribution. Furthermore, the low-ball pricing had not been authorised. The trail turned to Ingram Micro, which said it had sold the product to a second tier reseller with proper margin structures in place. Furthermore, it had been bought through its commercial arm and should never have gone into retail anyway. When all the finger-pointing is finished and the dust settles, one simple fact remains - retail is the hottest market and everybody wants a piece of the action. As previously reported in ARN two weeks ago, HP announced it was sharpening its retail pencil and pulling more business out of distribution in an attempt to make it more competitive. It already does 70 per cent of its retail business direct through Harvey Norman, Dick Smith and Officeworks.

Now Acer has indicated it sees retail as the sector most likely to provide it with growth in the year ahead (see page 1). Local boss, Charles Chung, has agreed to give Harvey Norman exclusive SKUs in order to regain space on its shelves. It is surely no coincidence that a disappointing year for Acer coincided with a period where it was benched by Australia's largest IT retailer.

The Taiwanese vendor will also court other retailers including The Good Guys and Myer in an attempt to grow its retail business.

Finally this week, JB Hi-Fi has announced plans to push Acer, Asus, HP Compaq and Toshiba hardware through a growing number of its stores. It is still early days for this AV specialist in the IT market but it has a large and loyal band of customers that mean it will command respect from other players.

Competition is fierce and retailers will continue to fire special offers at each other in a bid to win the hearts and minds of consumers and small business owners. The only thing for certain at the moment is that the buying power all of these organisations can bring to bear spells trouble for specialist resellers trying to stay afloat in the consumer market.


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