Sirius dismisses 3Com's modem market ambitions

Sirius dismisses 3Com's modem market ambitions

Australian modem-maker Sirius Technologies last week touted a rosy $1.3 million profit on sales of $31 million since the merger of Banksia Technology and Netcomm in November last year. But there is still much tinkering of business models and inventory rationalisation to be done, according to Sirius MD David Stewart.

A defiant Stewart was also far from troubled by claims of 3Com MD Gerhard Rumpff, that the vendor will win a 30 per cent share of the V90 modem market by January next year.

"I believe their chances of success are slim," Stewart claimed.

"3Com does represent stiff competition for Sirius, however they have to urgently improve their distribution strategies in order to compete.

"They have made numerous attempts to enter the modem market without success and with a lack of strong logistics and product maintenance arms they will struggle to hit the 30 per cent mark," he added.

"Resellers must also be wary of the fact that much of 3Com's manufacturing is done off-shore and could cause shipment delays."

Stewart added that Sirius now has a very strong solution to offer resellers, from the consumer end of the market with Simplecomputing's modems through to high-end remote access modems provided by Dataplex. Complementing these offerings are modems from Banksia and Netcomm, which are aimed at the corporate and small office markets.

"While we trade under the name Sirius Technologies our intention is to continue with the same modems brands in order to force our way into new market segments," Stewart said.

"We now have one integrated sales force, while the decision to sell our Dataplex modems through a distribution channel will also increase our exposure in the remote access arena."

Drastic steps

Meanwhile, Sirius is also taking drastic steps to implement better inventory management strategies after the vendor admitted that excess inventory was a major cause of the company's debt.

"Since December 31 our debt has been reduced by $2.2 million, largely as a result of improved inventory management," Stewart claimed.

"Our strategy is to cull product lines that aren't performing and introduce marketing campaigns for those products which can offer potential sales value. We are also in consultation with our distribution partners to tighten their forward ordering options in order to better manage our stock."

According to Stewart, other inventory cost cutting options open to Sirius include shipping modems direct from Sirius manufacturing outlets to the reseller coupled with attractive price incentives for distributors to on-sell excess stock.

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