HP is making a play for the Australian PC whitebox market, signing an exclusive distribution deal with national systems builder, Westan, to assemble and distribute its forthcoming range of unbranded desktop PCs.
The deal, almost a year in the making, will see Westan produce desktop PC systems based on HP hardware but developed as whitebox-style products.
HP's new channels manager, Rosalie Boyd, said the decision to sell unbranded PC components to the Australian community was due to the strong marketshare these systems had within the PC industry.
"The Australian market is unique in terms of the maturity of the unbranded desktop business," she said. "It's a huge part of the market. We're doing this to supply customer choice."
Although a similar program had been launched in India 12 months ago, the move was otherwise a new market initiative from HP, Boyd said. Under the arrangement, Westan will be supplied with unbranded HP barebone units, featuring a mini-tower with motherboard, floppy drive, installed power supply, keyboard and mouse.
HP would also provide unbranded memory, hard drives and optical drives as optional components, Boyd said.
There are no plans for HP to extend into the whitebox notebook market at this stage.
HP chose to partner with Westan because of its 15-year heritage in the system building industry, she said.
"They are a strong contender and have a strong channel," Boyd said. "They have also had their own unbranded box for a long time."
Another key factor was that Westan did not already have a distribution relationship with HP for its branded products, she said.
"We looked at the partners we could work with," Boyd said. "We didn't want to compromise the branded business in any way."
She said Westan would be in charge of all promotional, sales and training programs relating to the new unbranded PCs, as well as warranty conditions.
None of the parts would be covered under HP's existing warranty schemes, Boyd said.
Westan marketing director, Phil Jackson, said the company would offer its resellers the choice of systems branded with their own logos, as well as the boot-up welcome screen. It would also create brochures and marketing material which would feature the reseller's name in preference to Westan's.
"It is an opportunity for our partner to step in and provide products to markets that they have been shy of," he said. "Resellers don't cost in the assembly of products, documentation, training or advertising."
For example, many of the distributor's SME-sized partners that assembled systems had restricted themselves to a consumer base, Jackson said. "Often they don't have the confidence in their product to move into the low-end business part of the market," he said.
To meet forecasted demand for the new desktop systems, Westan has expanded its assembly line capabilities at its office in Melbourne by tenfold.
"We want to make sure our structure is capable of stepping up and producing larger volumes for the deal," he said. "We expect to grow the range of products as we get more experienced."
Westan has also expanded its services and support capabilities specifically for the new systems deal.
"We won't be providing HP services, but we will provide our own services and support through third party companies," he said. "Our background is in whitebox, but we have to add value to that."
Westan is expected to start supplying stock from mid-November.