ERA carpets Intel

Despite serious allegations of product tampering and chip re-marking, officials from suspended Intel distributor Electronic Resources Australia (ERA) and its part-owner Ingram Micro insist that the "regrettable" scandal has been blown out of all proportion.

In fact, Ingram Micro's Asia-Pacific president and ERA board member, Greg Spierkel, hopes that ERA will have its distribution rights restored by Intel within just "a few months".

Spierkel claimed the chip scandal was masterminded by "only a few bad apples" working out of ERA's Melbourne office and attempted to play down the issue by revealing those offenders "had been sacked immediately".

And in what could prove to be a hurdle to any future investigations, Spierkel confirmed that one of the suspects had already fled the country.

Speaking to ARN last week, Spierkel regretted the incident had occurred and admitted both companies would be the laughing stock of the industry, but warned that Ingram "would be stepping up its Australian vendor partnership announcements to compensate for the loss of ERA's Intel distribution rights".

Intel Australia's general manager, David Bolt, spoke to ARN about the dilemma faced by the giant chip vendor following the announcement of ERA's improper activities. He claimed that publicising the issue could cause concern to people when they "shouldn't necessarily be concerned". He added that any publicity would "make what we're doing so open that we'd tip off the culprits.

"What we've got to do is determine how much effort we put in to try and eradicate it without incurring too much cost," Bolt said.

Scheme of things

On the vexed question of re-marked CPUs, Bolt acknowledged that: "It happens. It's been happening for years. In the overall scheme of things, it's reasonably small, compared to the legitimate marketplace and the trading issues.

"We are constantly putting new pro- cesses in place, new designs in packaging, new tracking methods, new technologies under the covers of the chips to thwart that sort of activity.

"To date we've had pretty good success at identifying what people are doing in that area [re-marks] and we are putting programs in place to stamp it out.

"We constantly have to evolve methods and processes, as those who are engaged in the activity evolve," he added.

When questioned about Intel's official strategy to combat grey marketing and parallel importing, Bolt said that: "Intel has moved to a worldwide pricing model, and we use the US dollar as the reference point. This provides a level playing field and everyone knows the price."

Bolt added that customers take a different approach to this in relation to exchange fluctuations. "Some will hedge through various financial instruments, and this is typically why there is some price fluctuation," he said.

"Where we have multiple tiers of distribution, then obviously we've got some product moving around different countries. A lot of people misread that as something strange happening, and in fact, it's not necessarily," he added. headlineBolt dodges chip scam issueby Tom AllenIn this extract from an interview with Intel Australia's general manager, David Bolt, ARN's Tom Allen reveals Intel's seemingly unconvincing approach to the serious matter of weeding out chip tampering from the Australian marketAllen: Would you be surprised that we have learnt that there are between 20 and 30 000 re-marked Intel chips brought into Australia each year?

Bolt: It's possible . . . In the Australian market, that would be fairly significant. I'd be surprised if it was really that high.

Allen: You're saying it's not a big problem?

Bolt: I'm not downplaying it, because to an individual customer, if they've bought a product that's not legitimate, it's a big problem. They've paid good money, and they haven't got what they've paid for.

Allen: If you could be sure that the number of re-marked Intel chips coming into Australia was only 5000 a year, would that make you happier?

Bolt: No, it would still be a problem, because the goal is to have none. What we've got to do is determine how much effort we put in to try and eradicate it without incurring too much cost, or making what we're doing so open that we that tip off the culprits.