Defending the humble PC desktop

The humble desktop is coming under fire from its mobile counterpart and facing up to a future where it is no longer the king of the PC sector. Does that mean resellers should exit the desktop field now or is there a way for them to squeeze some profit out of a sector that has become the least attractive of all the hardware categories? Channel Middle East asked some of the region's leading desktop PC producers to justify their existence to the channel.

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By  Julian Pletts Published  August 16, 2008

The humble desktop is coming under fire from its mobile counterpart and facing up to a future where it is no longer the king of the PC sector. Does that mean resellers should exit the desktop field now or is there a way for them to squeeze some profit out of a sector that has become the least attractive of all the hardware categories?

Channel Middle East asked some of the region's leading desktop PC producers to justify their existence to the channel.

Channel Middle East
canvassed opinion from the following desktop PC channel experts: Samer Atassi (SA), sales manager at DTK Computers; Manoj Thacker (MT) managing director at Sky Electronics; Sanjay Kachroo (SK), product marketing manager desktop and servers at Acer; Yves Matta (YM), UAE volume sales director for channel at Fujitsu Siemens; Sameh El Deeb (SE), client PC manager at Dell; and Khaled Kamel, regional director at Lenovo.

With the notebook market exhibiting such strong growth, is it realistic to expect channel partners to reduce their investment in the desktop market?

SK: Reports from the IDCs and Gartners tell us that, by the end of 2008, notebook and desktop share globally is going to be split. In the Middle East, Africa and Turkey, desktops will still command a higher percentage than notebooks. But, if you look at the UAE, notebooks have already taken over the quantity and numbers.

The top three global brands are not seeing reduction in investment from partners towards desktops because the cost, over the past four to six quarters, between clones and name brands is becoming negligible. And, before that, clones were a healthy proportion of the overall PCs being sold. Branded PCs will continue to grow in the desktop segment because globally clones are dying.

MT: The notebook market share is an additional share. Those channel players who were doing screwdriver assembly with basic or no technical knowledge have shifted to easy sales as laptops can be sold in a commodity or accessory fashion. So, it is only realistic from a sales point of view, it should not be mistaken for a permanent shift.

SE: I can only comment on Dell channel partners, and our channel partners' abilities are really developed and diverse. I cannot say that we have channel partners that are 100% focused on desktops.

However, desktops as a business is, with some partners, a large proportion of their business, especially partners that are catering to the education, public sector and corporate space. But with mobility increasing they will have to adapt by retraining their sales forces and modifying their marketing message. This, of course, is not a total surprise for them.

SA: The desktop market is still a strong market. It is diversified and exists strongly in most of the markets in our region. None of the reports produced for the region show negative growth in desktops sold during the first quarter of 2008, on the contrary. There is double-digit growth in many countries. For DTK, desktop volumes are increasing substantially and achieved double-digit growth in the first quarter.

YM: It depends, because we look at the channel in two segments. Today we do not focus on the resellers from Khalid Bin Al Waleed Road and Computer Plaza because it is not one of our priorities. We see strong potential in power retail and SMB. Today we are putting a lot of focus in terms of account management into the SMB sector and this involves education and all of the verticals.

There is small potential in power retail, not much volume, but lots of vendors are very active. We are producing our new line-up, which will target gaming and media consumers, and this is where margins and some profitability for both retailers and distributors can be found. And for the SMBs the margins are not too bad. There is still potential in the desktop market and we are working on it.

What value is there in the Middle East channel selling desktops given that margins are notoriously low?

MT: Margin is tight if it is a low cost screwdriver assembly desktop. Otherwise the value is great for those assembling high-end technology. The availability of high-end components, from casing and power supply to hard disks, memory and processors, has increased more than ever before as well.

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