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EDITORIAL: A channel space oddity

EDITORIAL: A channel space oddity

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It was particularly hard to pin people down last week on what would be the market drivers of 2002. After a year of living dangerously such as we have just endured, who can blame people for being a little bit hesitant in making a call about what might or might not happen even next week, let alone deep into the coming 12 months?

It has also been interesting to reflect on some of the predictions made by the channel 12 months ago in our final issue of last year. I am not going to embarrass the people who were way off the mark, but if you still have a copy of the last issue of the year 2000, you might get a few chuckles.

For starters, there was no shortage of pundits still declaring the Internet to be where the money is. This year was to be the year in which "the wider market will catch up with the early adopters" in terms of e-tail, ASPs and Web hosting companies, according to one prediction.

No doubt some of these models are still gathering momentum but it has been more the old powerhouses that have taken over, rather than the early adopters. Many of the innovators went broke and the old guard adopted their ideas.

Meanwhile, GST business activity statements were supposed to drive PC sales to new highs, IP telephony was supposed to rule the networks and broadband adoption was supposed to drive applications development. In retail, confidence was still high that online sales would be the champion of the sector.

Instead, what we saw were PC sales continuing to plummet, very limited budgets at the end-user level for any convergence projects, and a chicken-and-egg scenario in broadband adoption and service development (which came first?). As for online retail, if there is a pure-play e-tailer left out there, can you please give me a call. Hang in there E-Store, your time may yet come.

But there is a recovery on the horizon, according to many. Just last week several distributors reported a spike in sales, and that has to be a good sign that consumer confidence has returned.

Distribution stalwart Fiona Dicker of Dicker Data conceded the spike was "probably seasonal" but experience has shown her that a lot of customers hold off buying until the new year in the hope they will see some "specials".

"January should be good if this [December activity] is anything to go by," she said, adding that if January is good, the industry is off to "a far better start than last year".

Meanwhile, national player IT Wholesale was also reporting swift trade in December with corporate sales defying the usual slowdown that comes at the end of each year. Retailers were also buying up.

IT Wholesale managing director Santo Pappalardo said if it was just a seasonal spike you would only expect to see the retail sector boosted, but "this is not just retail, it is across the board".

Few are doubting it is going to be another tough year in 2002 but at least everybody has trimmed down to realistic levels and developed smarter business acumen. Such an annus horibilis tends to do that to you. Things just have to get better, don't they? And even if they don't, we're all better prepared to cope with it.

On behalf of all the staff of ARN, I wish you all the best for Christmas and the holiday season. ARN now goes into a four-week hibernation to emerge fresh and ready for the new year with our first publication on January 23 and then every Wednesday after that until Christmas 2002.


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