HP/COMPAQ: Channel stunned by merger

HP/COMPAQ: Channel stunned by merger

Compaq's distribution channel is still reeling from the news of HP's buy out of the PC manufacturer. However, most distributors are expecting a 12-month wait before the effects are felt in the Australian channel.

Fiona Dicker, managing director of Compaq's leading Australian distributor Dicker Data, said she had suspected a major merger for some time, commenting that the market has shrunk too much to support too many major players.

"There is not all that much left but HP, IBM and Dell," Dicker said. "The HP Compaq merger will be a big as IBM."

Dicker also forecast that the white-box market would ultimately feel the effects of the deal.

"Both HP and Compaq have been aggressively chasing white-box market share for a while now," Dicker said.

She was also concerned about how the deal might affect the distribution reviews currently underway at Compaq.

Steve Rust, managing director of Ingram Micro, a distributor which has relationships with both vendors, said he was currently playing a game of wait and see, confirming Australian distributors had been caught by surprise.

"I don't expect there to be too much of an effect over the next 12 months," Rust said. "I'm glad I'm not the one doing the integration on this deal because it would be a huge job."

Rust believes the major ramifications will play themselves out via the product lines, with the disappearance of certain lines.

"There are certain complementary elements to the product lines; HP is strong in printers, while Compaq holds sway in the handheld and PC market," Rust said. "At the end of the day however, HP is an exceptionally strong brand name and will now be even stronger."

Photograph: HP's Carly Fiorina

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