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Case closed

Desktop PCs may still outshine notebooks in terms of volume of sales for resellers, but increasingly channel companies are finding their customers interested in the myriad of benefits notebooks offer.

Hakan Alac, senior research analyst at IT research company Inform, says notebook sales have been fairly consistent on a month-by-month basis. "However, in the past few months we have experienced an increase in notebook sales as products and product features are enhanced and, more importantly, average prices have been reduced," Alac says.

"In terms of affordability, the average street price of notebooks has generally been falling. In January 2000, the average price of a notebook was $4063, compared to $3781 in January 2001. This is not only good news for corporates that buy up large amounts of notebooks, but also increases the value proposition for the SME market."

But for resellers looking to take advantage of end users' interest in notebooks, the consensus seems to be: find out what customers really need and want.

Sending the message

David Nicol, IBM's Australia and New Zealand local product manager for IBM's Thinkpad, says the role of the channel is very strong, and that IBM relies heavily on its channel to "spread the message" about its products. Nicol says it educates the channel on the features and functions of its notebooks so that they can then spread the message to their customers. "[Resellers have] a role in talking to their customers about mobile computing and what capabilities are available to them," he says.

"They need to be asking the customer what they want from their mobile experience . . . [and] find out what type of notebook they're after in terms of size and weight."

Jim Alfaro, IBM's worldwide speaker about notebooks, who was recently in Australia for the 2001 Mobile Solutions Roadshow, says that customers today are looking for desktop functionality in a notebook package. He believes more and more people are moving towards notebooks as their device of choice instead of the desktop. Like the mobile phone, it allows people to work anywhere, anytime.

To capture this interest, IBM's Nicol says that when resellers are talking to customers, they need to try to determine the most appropriate product. He suggests asking three key questions to determine this. Does the user need to travel with the PC? How much do they travel? What kind of functionality or performance do they need? And what are their budgetary constraints?

Andy Woo, computer and peripherals analyst at Gartner, believes resellers need to re-skill themselves and attain particular sets of skills for the vertical markets they plan to tackle. Resellers need to have skills in demand creation, pre-sales consulting, order taking, product fulfillment, and service and support, he suggests.

Woo says that rather than try and do everything, resellers should concentrate on one particular area. "[Resellers] can't be a jack of all trades - [they] have to specialise in one area and concentrate on their core competencies," he says. "The bottom line is to add value to the chain."

Go go customers' gadgets

Aron Jackson, from notebook vendor Jackar Australia, believes that customer's needs are still major issues for resellers. He uses the example of an SME not always needing the fastest notebook on the market. "You'll find Australians are very price-conscious compared to the US market, but," he adds, "we still love our gadgets."

Jackson says it's also important for resellers to build up ongoing relationships with their customers - if they're happy with the level of service, the customer will come back the next time they need a product.

From a reseller perspective, Faisal Chaudhry, a partner at reseller Notebook Land, says his customers are primarily seeking productivity when assessing which notebook to buy. "We discuss what they want to use the computer for," Chaudhry says. He believes it's important to look at what the primary objective of the machine will be for the customer.

"Laptop computers are the ballpoint pen of the new computer age," he says. "You can take your laptop with you wherever you go. Your office is wherever you are, and you don't even need a desk or a power source."

He says that Notebook Land's primary focus at the moment is the home-user and corporate markets. Particularly with the home users, he says, it's a matter of explaining how a notebook, as opposed to a desktop, can benefit them at home.

"The growth rate [in notebooks] is exponential," Chaudhry says. "Our sales in the past three months have doubled [over] the three months before that. Whereas the PC market has virtually come to a standstill, laptops just seem to keep growing and growing." And it's because of that growth that Chaudhry says Notebook Land decided to specialise in notebooks.

He also sees opportunities in selling other products, such as a mobile printers or scanners, while completing a notebook sale. Tradespeople are ideal customers for cross-selling, Chaudhry adds. Electricians and plumbers need mobile printers with their laptops so they can print invoices for their own customers on the spot, giving them productivity gains because of the time they're saving.

Chaudhry says the overwhelming argument in favour of laptops is the convenience, flexibility and cost benefits they offer. "Traditionally laptops are the preferred choice of people who are buying their second or third computer. But increasingly first-time computer owners are discovering the considerable advantages of choosing a laptop."

Inform's Alac suggests resellers look closely at the types of add-on components and accessories that will be popular with notebooks. "As prices decrease, notebooks are looking more attractive to consumers in the retail market."

And Panasonic is touting the need for what it describes as "ruggedised solutions", such as its range of Toughbooks which were released in Australia last year. Craig Hutchinson, national business manager for Toughbook at Panasonic Systems Division, believes the notebook market has expanded dramatically in Australia. "Many organisations are demanding rugged solutions - not just areas such as the armed forces, but also companies with key field operators that cannot afford downtime," he says. "The geographic spread of Australia also means that business travellers are commuting significant distances with their notebooks, and this has an effect on product wear and tear."

But there are still challenges for channel companies selling notebooks.

On the up...

Gartner's Woo says that one of these challenges is the shrinking PC market, but adds that notebooks is one of the key growth areas in the PC industry. "Last year alone the portable market grew 23.8 per cent," he says. "I believe this year the growth rate will continue to mirror that."

The mobility of Australia's workforce is another major positive driving notebook take-up in the future.

Gartner's Woo believes mobile workers are becoming increasingly common in Australian business. He also sees drivers moving forward will be technologies such as wireless LAN.

Compaq Australia's Chee-Mei Gan also sees businesses looking for productivity for their mobile workers as one of the hot topics of the moment - the anywhere, anytime idea. She believes the focus will increasingly be on wireless technology, both wireless LAN and Bluetooth.

She suggests resellers need to look at their customer's requirements in terms of what they need and how their mobile workforce is using mobile computing. "Are they having access to information wherever and whenever they are? With wireless LAN technology, you have the capability of accessing information while being free to roam."

In the future, IBM's Alfaro thinks resellers will increasingly be asked questions about wireless technologies such as Bluetooth and wireless LAN. He stresses that it is imperative that channel companies know the difference between these technologies, so they can pass this information on to their customers.

Looking forward into the next six to 12 months, Inform's Alac believes the notebook market has been heating up recently, with vendors launching new products with distinctive features. "As notebooks become increasingly similar, there is renewed pressure for vendors to differentiate their products from their competitors," he says. "Vendors are increasingly looking at style, product features and accessories as a point of differentiation."

Laurie White, product marketing manager at Toshiba Australia agrees the channel should be looking carefully at what the customer needs. "[The customer] might have wants, but what are they trying to solve?" he asks.

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