White Box Vs Channel stuffers.
Lee:
Talk about competition for the channel stuffers, they haven't seen nothing yet considering one of them have managed to royally piss off
the VARs.
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Tech Data to Build Generic PCs, Challenging Brand Names
(11/9)
ERIK SCHATZKER
c.1998 Bloomberg News
CLEARWATER, Fla. -- Tech Data Corp. will begin assembling no-name personal computers as the world's second-largest PC distributor seeks a share of the multibillion dollar global market for generic PCs.
Tech Data already builds brand-name computers for International Business Machines Corp., Hewlett-Packard Co. and Compaq Computer Corp. Now, it also will assemble and distribute non-branded, made-to-order PCs for business customers through its network of dealers.
Tech Data will use its plants that make computers for some of the biggest PC sellers to expand into the lucrative market for non-branded PCs, or ''white boxes.'' Channel Information Services, a unit of CMP Media Inc., estimated that $7.6 billion of generic PCs were sold in the U.S. last year, and Tech Data said the overseas market is equally large.
''We're looking to service and support the existing white-box market,'' said Tech Data President Tony Ibarguen.
The company, the second-biggest PC distributor behind Ingram Micro Inc. of Santa Ana, California, will assemble the white-box PCs at plants in South Bend, Indiana, and Swedesboro, New Jersey.
Tech Data rose 5/8 to 42 9/16 in midmorning trading.
Computer resellers and consultants sold 6.4 million generic PCs in 1997, according to Channel Information Services. They assembled most of those using their own facilities, with parts distributed by companies like Tech Data and Ingram Micro.
Tech Data said 30 percent to 40 percent of all PCs sold worldwide are generic. Compaq, the world's No. 1 maker of PCs, sold 5.1 million units last year.
Tech Data is expanding into white-box making at the request of more than 60 percent of its reseller customers, who prefer to concentrate on sales and product support, Ibarguen said.
The company will continue to make PCs for IBM, Compaq and HP, even as it assembles white-box computers using the same workers at the same plants. Generic PCs often compete with brand-name machines for sales.
''I'm not denying that there could be some cannibalization,'' Ibarguen said.
Tech Data advised IBM, Compaq and HP more than a year ago that it planned to begin assembling its own PCs, Ibarguen said. Tech Data said the move into white-box assembly will help those companies by enabling it to build PCs for them at lower cost.
Also, Compaq and the others are more concerned with competition from direct marketers such as Dell Computer Corp. and Gateway 2000 Inc., Ibarguen said.
Tech Data declined to disclose expected revenue from building and selling no-name PCs. |
