One particular distributor is under siege at the moment. First, it was dumped by its main vendor partner, AMD, for various breaches of their partnership agreement. Last week, Microsoft accused it of supplying pirated software to several Sydney resellers. This week, US-based PC manufacturer eMachines is taking legal action against it for the unauthorised distribution of its products.
The company in question is Silverwater, Sydney-based distributor APD International. It is making a mockery of eMachines' distribution model through the parallel importing of eMachines PCs for both domestic and international sales.
In July last year, eMachines set up its first Australian office in Melbourne. Sales and marketing director Steven Klotnick quickly employed a handful of staff and set up a warranty agreement with AWA Technology and call centre support services through Datacom. The big ace in his sleeve came with a three-month exclusive arrangement to supply PCs to retail giant Harvey Norman.
This exclusivity has been somewhat short-lived. In actual fact, it never existed. APD International has been selling a range of eMachines PCs to local resellers and dealers in Asia for several months.
APD International director Ngat Doen said he "brings in a good number of eMachines PCs". Of these, only 20 or 30 per cent are sold into the local channel with the rest being moved offshore. Nevertheless, that equates to around $20,000 worth of machines a month.
ARN sources have revealed that APD International does not have distribution rights to eMachines products, and is selling product that is around 18 months old. eMachines is now preparing legal action against the distributor.eMachines staff in both Australia and the US refused to discuss the matter. Meanwhile, Microsoft would not comment on its relationship with APD, citing pending legal action, and AMD would not comment on the basis that litigation against the distributor is currently being put before the Supreme Court.