Special investigation: Clone assemblers hurting

Special investigation: Clone assemblers hurting

For many white-box manufacturers, the sudden price fluctuations of components have hit hard.

"We have no choice but to increase the price," said Robert MacPherson, managing director of assembler Micro-Pro. "The price of other components might be coming down, but not by enough to balance it out. Memory went up by so much - you just can't hide [that cost]."

Jullie Jeal, general manager of Total Peripherals Group, said the fluctuation prices mean assemblers have to make a "guesstimate" when preparing for tenders, as costs may change dramatically during the tender process.

MacPherson is also a victim of this uncertainty. "When it happens quickly you tend to lose money. If you are in the middle of a tender, you can't change the prices halfway through. You just have to wear it," MacPherson said.

"I wonder if some of the big PC vendors are really affected like us. I wonder if they have agreements in place with their suppliers to make sure they don't suffer the same pain."

Fellow Victorian assembler Kevin Dainton, managing director of Daitronics, believes the tier-one players have large forward orders with suppliers and are "generally able to read and control the market at a global level".

Although the fluctuating prices are creating a difficult juggling act for PC vendors and assemblers in the short term, the rest of the channel is confident that conditions will eventually improve. Dainton said he is confident pricing will stabilise and eventually decline, particularly with an improving Australian dollar.

Jeal believes the price increases on LCD panels will result in even more of a drag in the market penetration of LCD. But since they make up a very small percentage of the monitor market, she believes there will be little effect on the channel.

According to NEC Australia's general manager, Tim Falinski: "The pricing we have now is more of a re-adjustment to what the price should be. We enjoyed the good times, now for reality."

Nevertheless, recent reports on economic activity in the US have highlighted the possibility that a PC price increase is the last thing the IT industry needs just after it has shown signs of recovering from a severe downturn.

"It's become a far more price-sensitive market than it was in the past," said Mark Roberts, CEO of Brisbane-based ServerBits. "The Y2K PCs are getting a bit long in the tooth, but businesses are just as likely to wait on the upgrade until the price starts going back down again."

Georgina Swan contributed to this article.

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