In the third part of an in-depth interview with ARN's NADIA CAMERON, Toshiba information systems division general manager, Mark Whittard, shares his thoughts on how the channel can make money in the mobility market. He also talks about green computing initiatives.
What are the key market drivers for your channel partners today?
Mark Whittard, Toshiba (MW): IDC is saying globally by the year 2010, notebooks will outship desktops worldwide. I think it will be earlier here as we're ahead of the average. In the named mass merchants channel, notebooks are outshipping desktops. And that's mainly because the technology lag no longer exists - you can buy similar specs in either platform. As broadband in the home becomes more prevalent and wireless networking takes off, it's going to further drive take-up.
How you approach the notebook customer and the way you service them may then be different because they're mobile. You might need to have national service coverage or at least major city service capabilities, or partner with someone that does.
Wireless technology and the way customers connect is one of the big drivers. It's not just Wi-Fi; it's Bluetooth, and upcoming things like WiMax, and 3G. Then there's the software associated with that. It allows resellers to open a whole new dialogue with customers they wouldn't get with desktops by talking about how they work, what they use for email, the Web browser, security, and VPNs.
Desktop PCs are more transaction-based. With notebooks, you talk about subjective features like battery life, screen size and features. It allows resellers to truly understand what customers are using it for. A lot of resellers approach selling notebooks like they would desktops and lead with price and specs. It's not the way to do it. If resellers switch on to customer benefits, there's so many opportunities. That removes price from the equation and allows them to sell customers what they really want as well as extras around that.
Toshiba recently merged its AV and IT divisions. How important is it for a reseller to learn about AV?
MW: For those on the consumer side, it's very important. Things like high-definition DVD will become more prevalent using dual-use products like our Qosmio notebook. Ultimately this product will become an entertainment device - a Hi-Fi sound system, TV, DVD recorder, as well as a full-blown PC. It'll have entertainment software as well as business software. For business, it's not as important. The key issue there is security, which opens up an opportunity for resellers to sell other services. The other piece of the puzzle is quality and reliability around mobility - resellers could start asking customers about disaster recovery and backup for example. Doing work and software upgrades remotely is another challenge, but also an opportunity for resellers.
Green computing is becoming a major industry concern. What is Toshiba doing to improve its carbon footprint?
MW: A lot of the government-based reports have been rightly focused on the trade-in and deployment end of the cycle. What they're becoming more aware of, and where our focus is, is the entire lifecycle and there are five elements here. The first thing is component procurement and where materials for those come from. Toshiba is one of the few vendors that publishes strict green procurement guidelines. Additionally, we were the first to launch a fully Restriction of Hazardous Substances [RoHS] compliant computer in 2004.
The next piece is the manufacturing phase. Most of the world's notebooks are manufactured in China, and it's fair to say China has some challenges adhering to those. We were the first vendor to have no CFC in our manufacturing process as well as no lead.
The third phase is distribution and there are simple things we can do. For example, in July we had our first one millionth unit month locally. We reduced the physical box size of the cartons out of our factories on average from 44 notebooks per pallet to 56. So there is an effort to minimise the fuel costs as much as we can. We're also looking at sea freight where possible.
The fourth is the usage phase. Australia is a bit behind the rest of the world - the US has already gone to energy efficient computers. Toshiba is number one in events power management and has already achieved 4-star compliance in the US. We're pretty confident we'll get high ratings when these ratings are introduced here.
The last phase is trade-in and recycling. We have been recycling batteries since 1998 or 1999 with MRI locally. They have a 98-99 per cent success rate. We've just started recycling the whole unit with them and we're in discussions as to how we market that to the customer.
Who is ultimately responsible for PC take-back and recycling?
MW: We are looking at a charge that customers have to bear somewhere along the line depending on the age of the product. Some government debate has been around whether we should have an industry-wide levy. We work with Landcare Australia and Planet Ark and we do what we can, but it's really up to the government. They've been pretty spasmodic in their approach and engagement with vendors. Government should either ask the industry to get together and formalise an agreement, or introduce a levy, but there needs to be some sort of organisation. Or they could force vendors to at least have a program where they look after their product, and that seems to be the way it's going at the moment.
We're encouraging customers to refresh their products every three years not only because it's good for ourselves and our resellers, but also because the products then have a recycling value - either as material, spare parts, or they can be refurbished and re-marketed. That helps fund recycling the older stuff. And the recycling companies are getting smarter - the gap has closed a lot. Eventually you could just put a levy on the upfront price, but we're still trying to determine what that cost is.