Editorial: Facing up to vanishing point
- 09 October, 2006 13:40
Barely one-in-four of the PCs sold in Australia during the second quarter of this year were built in Australia, according to IDC analysts. This is a shocking figure when you consider local builders accounted for about half the market just four years ago. But, as with the motor industry, it is an irreversible trend and we might as well get used to it.
After 23 years in the business, SA-based Microbits is the latest example of a local assembler to fall by the wayside. It largely plied its trade in the traditional whitebox strongholds of government and education, so losing its place on the state's whole-of-government hardware panel earlier this year was always going to be a sickening blow. Looking back now, it has proved to be fatal.
Despite being quicker to market and offering more flexible configurations, lower prices have traditionally been the biggest reason for government and education to buy locally built boxes. In a commoditised market like PCs, the multinationals have been able to erode that differential to vanishing point. When faced with a buying decision where they have heard of one brand but not the other, few users are going to take a leap of faith.
With local builder numbers generally on the decline, the future of a leading light will come under serious scrutiny in the weeks and months ahead. Ipex, probably the second largest local brand name in the history of PCs, will have its fate decided by new parent, Commander.
Some industry sources have suggested Commander is looking for a buyer, which isn't difficult to believe when building is such a difficult game and not core business for the reseller. But there are a few aspects to this puzzle that will make it a difficult one to sort out.
The first major problems will be finding a viable buyer. Optima has not been in discussion with Commander, according to managing director, Cornel Ung. Acer has also refuted suggestions it could be interested in buying Ipex to build its own PCs at the large Victorian manufacturing facility.
It is difficult to think of many other companies that manufacture locally and have the scale or inclination to buy Ipex. With possible buyers thin on the ground, Commander is considering its alternatives. These include outsourcing the manufacture of Ipex boxes to a third party or having another builder put them together at the existing site.
The other part of the conundrum, even if it did find a buyer, would be retaining ownership of those juicy government contracts. As much as it would be easier to put the reseller hat on and sell multinational boxes to those organisations, some of the fatter agreements stipulate local manufacturing.
Senior management has made some very positive noises about Ipex since gaining control as part of the Volante takeover. Whatever it decides, we can expect Commander will continue to be associated with the brand in one form or another.