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Channel is the D-Link in the chain

Channel is the D-Link in the chain

D-Link has enjoyed massive growth in its Australian operations over the last two years, more than doubling revenues to $26 million from 1998 to 2000.

Mass-market connectivity manufacturer D-Link held its 2001 channel conference recently in Bali and took advantage of the opportunity to outline future directions and market strategies to its leading distribution and retail partners.

According to Kevin Wen, D-Link's Australia/New Zealand managing director, the company fully understands its position in the connectivity space as a mass-market supplier. He makes no secret of the fact that its business model revolves around moving in only when demand for technologies has been proven in the market place.

Once the demand has been confirmed and mass markets begin to open up, D-Link moves in and drives the costs down through efficiencies obtained in design and large-scale manufacturing.

In Australia, D-Link feels its biggest challenge is to improve brand name awareness and market acceptance, something that has already been achieved in the US as a result of mass adoption. Wen pointed to the fact that small business, SOHO and consumer demand for network connectivity products has gone through the roof in recent years. Through price competitiveness it holds market shares of up to 63 per cent (NICs) in some segments, he said.

According to Maurice Famularo, Australia/New Zealand marketing manager for D-Link: "Technology still has a long way to go".

"There is enormous opportunity for D-Link going forward in bringing our business model to the latest connectivity technologies," he said. Famularo used voice over IP and ADSL broadband as two classic examples of opportunities for D-Link to bring its manufacturing efficiencies and lower costs to mass markets.

However, the company is still very steadfastly focusing on its traditional LAN technology heritage and building on existing wireless access switch technology and home-networking competencies.

"Wireless is still a little pricey but we see large growth opportunities for it in the future," Famularo said.

Meanwhile, Wen feels the channel is still the only way for mass-market vendors to reach users.

"Naturally the channel is extremely important to D-Link," he said. "We only ever deal through channels and work on the principle of ‘they win, we win'."

Wen said he wants D-Link "to be a household name" and remains committed to channels - even in broadband where there is a need to develop relationships with direct-selling telcos.

"I am not sure how we are going to do that [broadband] at the moment," he said. "However, you can rest assured that it will be through the channel."

Famularo said future direction for the company and its channel strategies will rely on an increasing retail presence. Retail now represents about "11 or 12 per cent" of D-Link's Australian revenues, Famularo said. "Retail is going to be increasingly important as technologies converge and prices come down".

D-Link has clearly identified and targeted "new channels" as a route to "new markets", he said. It intends to "partner with leading technology companies to infiltrate" where there are opportunities such as broadband.

"One of the main areas we see new opportunities is in partnering with major telcos," he added. "To get our products into the broadband and voice over IP services they are offering, we need to understand how they work."

D-Link also announced in Bali that Melbourne-based BBF had won its Distributor of The Year award, which was accepted by BBF managing director Ron Jarvis. Famularo said BBF secured the award "based on its exceptional performance and growth year-on-year".Photograph: D-Link Australia/NZ's Maurice Famularo.


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