A sign of the times

A sign of the times

Optima’s demise has been painful to watch and was largely unavoidable

Having written about this industry for a few years now, it was very sad to hear last week's news that Optima had finally hit the wall and called in administrators. It was no great surprise, whispers had been flying around for some time, but it still feels like a significant milestone in the decline of local PC manufacturing.

The company was founded by Cornel Ung some 20 years ago and grew to become the largest local manufacturer of PCs. In its pomp, it accounted for about 4 per cent of all PC sales in Australia and regularly won significant contracts, particularly in government and education.

Like many whitebox manufacturers, it was able to differentiate from tier-one brands on three levels - price, flexible configurations and speed to market. Alongside others including ASI, Ipex and Paragon, it was a thorn in the side of the multinational market-leaders.

But as we have seen so often in the IT industry, sometimes you can have a good thing taken away from you through little or no fault of your own as the market evolves beyond your ability to adapt and compete. ASI saw the writing on the wall and reinvented itself over the years (it now plays in fields as diverse as the datacentre and document management) but Optima stayed in the PC building game and had the rug well and truly pulled out from under it.

Looking back I remember Acer president, JT Wang, telling me in 2004 that the major PC vendors spent too much time trying to take a percentage point here and there from each other when there was a huge whitebox market with tiny advertising budgets to be attacked. He wasn't alone in reaching that conclusion.

Once the tier-ones sharpened their focus on the low-end of the market, with Acer and Dell particularly aggressive, life builders. As the market matured and price differentials were eroded, the schools and government departments that had been the core of Optima's business gradually defected to the multinationals.

The move to mobility in recent years also proved to be a major challenge for Optima and other local builders. The flexibility that had been such a key differentiator for their desktop business was impossible to replicate in the notebook market and styling was also a problem as buyers became increasingly concerned about the aesthetic qualities of their machines.

That's not to say Ung and his team are not accountable for the company's demise - the decision to branch out and put the Optima badge on cheaply imported consumer electronic devices drained money out of the business and never looked likely to succeed. Of course, that's easy to say now; hindsight is a wonderful thing.

As for the rest of the local PC manufacturing industry, it isn't all doom and gloom. There are still opportunities in specific niches like gaming, and some smaller players that have been supplying boxes to the same customers for years will continue to survive, but the salad days are over and they're never coming back.

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Tags acerOptimaCornel UngASIParagonIpexvendorsJT WangdemisePC sales

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