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Editorial: What's in a name?

Editorial: What's in a name?

While HP is insisting its new business arrangement with Westan is for 'unbranded' rather than 'whitebox' PCs, the news brings to mind an old saying: If you can't beat them, join them.

In recent times, Dell and Acer have made no secret of trying to take market share away from the local systems builder market by developing programs that target its traditional strengths such as flexible configurations and speedy delivery. And HP's decision to infiltrate the ranks by adding its own unbranded machines to the mix is simply further proof that the larger manufacturers have set their sights clearly on the whitebox market.

In many ways, it is not surprising that HP has decided to look for a slice of the whitebox pie. After all, the local whitebox market is maturer than most and half of all the PCs sold in Australia go through that channel. Furthermore, it has to be easier for a multinational vendor to take share from smaller manufacturers with little or no marketing budget than it is to fight each other for the odd percentage point.

From a HP perspective, the 'unbranded' deal provides it with another revenue stream (even if the sales won't be added to its column when analysts at IDC and Gartner are evaluating quarterly or annual market share).

And it must certainly be attractive for Westan, whose sales staff will be able to tout the new machines as some kind of big industry secret. The distributor must be expecting to get some significant traction in the market, given that it has drastically ramped up its assembly line capabilities to meet forecasted demand.

But what effect, if any, will it have on the dynamics of the branded HP channel and the wider PC market?

While these machines will not be sporting HP badges, you can be sure that Westan and its resellers will be making it very clear to potential customers that this is essentially what they are. And although existing HP hardware partners have so far been very diplomatic about the announcement, it is hard to believe that sales managers at the likes of Ingram Micro and Dicker Data will welcome the extra competition - particularly if it is pitched at an aggressive price point.

One thing the HP deal with Westan will do is reopen the branding debate and make people question what exactly the value of a badge is. The key differentiator between the new unbranded systems and the ones that wear a HP badge, according to the vendor, will be services. In short, buying the badge will give a customer access to the HP support network and warranty agreements.

So the success (or otherwise) of the HP-with-no-name initiative will largely depend on how good a job Westan and its resellers do when it comes to after-sales support. Many resellers will probably be attracted by the proposition of selling HP boxes and passing them off as their own, with Westan predicting that it will give smaller dealers the confidence to move out of the consumer space and into the SME market.

But like the small business community as a whole, cornershop resellers depend largely on word of mouth when it comes to making judgements about product quality and reliability. Westan will have to be on top of its game straight away if it is to make a success of this opportunity. A good reputation takes a long time to build but can be destroyed in next to no time.

Brian Corrigan is Editor of ARN. Reach him at brian_corrigan@idg.com.au


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