Doug,
Frankly, I don't see it.
What does Compaq get ? Lower inventory risk, making their channel assembly partner act like Dell, and whatever "lower cost" means by moving the assembly out of Compaq ? Let's assume that the inventory risk returns some working capital - cool, always take cash - but it's a one time "good" hit, and a longer term risk reduction (like, avoiding the one Compaq - we - are working through now. Moving costs into your channel usually results in you paying for it. How do I really believe that Merisel (or Entex, or ...) can assemble components for less than Compaq ? At best, a wash ?
How long will it last ? Memory, power supplies, storage ... what does Compaq get - real volume price discounts ? When does the channel buy the parts, and rent the brand ?
What's in it for the channel assemblers ? More work, more cost, the ability to "respond quicker" ? Quicker than Dell ? Lower cost than Compaq ?
I'd look at it, in the channel model, depending on who pays for what when. If Compaq pays, it's traditional assembly work / 2 tier manufacturing. If the channel pays, it's a poor imitation of Dell.
I'd love to know why the economics work, though.
rr |
