Powermove into iPod market
- 01 June, 2005 12:46
Aiming to become the top dog in the iPod accessories market, Powermove had acquired rival, MemSol, for an undisclosed sum.
The Melbourne-based distributor's owner and director, Philip Warren, said it had purchased all of MemSol's assets, except for the company shell, and would retain its three permanent staff.
The acquisition would knock out a key competitor in the iPod accessory space while also giving Powermove access to number one third-party vendor, Griffin, he said.
"Our business is strong in the iPod accessories space, but one brand we wanted to get our hands on was Griffin," he said. "MemSol had a master distribution deal with them, which is why we started discussions."
The acquisition would also give Powermove the rights to supply Elgato products.
Powermove distributes a range of iPod accessories, as well as displays, tuner cards, hard drives and carry bags.
Both distributors had an overlap in terms of resellers, Warren said. For example, each had previously serviced several key retailers, including Myer and Harvey Norman.
"They [MemSol] were really giving a lot of momentum to the market, which was a bonus for us," he said. "It made sense to take out a competitor who was number one in the mass merchant channel."
Warren said the deal would effectively double its sales revenues to $12-$15 million."MemSol were turning over about $5 million annually - I wouldn't expect to drop any revenue," he said.
The distributor is now developing a new website to provide resellers with e-commerce and online product information. Warren said this would give partners the ability to lodge live orders, as well as determine product availability. It was also looking for other acquisition and merger possibilities to actively expand the business. These would not be restricted to the third-party accessories market, he said, but also centre on introducing more general IT hardware lines for the mass merchants.
"We are aggressively looking to acquire more lines," Warren said. "iPod accessories are big for us right now and in the next couple of years will be bigger. But at some stage it will dip away as new technologies come onboard. If we do these acquisitions now, we will start to generate revenues outside of that."