Hardware distributor, Sato, is taking legal action for alleged breach of contract after small form factor (SFF) specialist Shuttle appointed two other distribution partners in Australia.
Altech and Multimedia Technology were appointed by Shuttle in September last year, ending a three-year exclusive relationship between the vendor and Sato.
Shuttle said the change of policy reflected the need for more coverage in the Australian market and was part of an international strategy to increase penetration.
Shuttle CEO, CK Hung, said the Australian market had a lot of potential but claimed the vendor needed to expand distribution in order to maximise that potential.
Shuttle said it had notified Sato in June that sales were significantly below targets and more market penetration was needed.
Sato product manager, Lou Yuhang Liu, said his company was very upset by the move and wanted to continue with Shuttle.
He said the company had invested a lot of money in promoting and pioneering the SFF brand, which now accounted for a large part of the company's sales revenues despite still being an emerging market.
Shuttle said its agreement with Sato ended on December 18. However, the vendor would continue to support existing Sato customers.
"We will not sell products to them but we will sell warranty parts so they can look after their existing customers," Shuttle sales manager for Australia, James Lin, said.