Net value

The netbook market is largely responsible for driving much of the growth that the mobile PC sector has seen during the recession, but there are still question marks over how sustainable the ultra-small form factor business actually is. Channel Middle East invited a selection of the sector's leading names to talk shop.

Tags: ASUSTeK Computer IncorporatedAcer Computer Middle EastHP Middle EastMSI (Micro Star International Co. Ltd.)Samsung Corporation
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Net value Peter Oganesean, HP.
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By  Andrew Seymour Published  August 16, 2010

We spoke to the following netbook channel experts: Peter Oganesean, PSG product manager at HP Middle East; Mark Prosser, product marketing manager at Acer; Alan Chu, regional VP MEA at MSI; Madhav Narayan, general manager of IT at Samsung Gulf; and George Su, regional director MEA & Turkey at Asus.

CME: Netbooks are renowned for being attractively priced. How important is pricing to your sales strategy?

George Su: Pricing is important in this product segment because this is a solution that often fits between a fully-fledged notebook and a mobility or desktop replacement. End-users usually have a very clear understanding of what they need, a very specific budget in mind and often a very specific timeframe in which to purchase. So if your products are not positioned at that sweet price point it is very difficult to appeal to those buyers.

Peter Oganesean: HP values and prioritises customer experience beyond pricing. We research and develop products that the consumer will want to invest in. Added value features are appreciated by the customer and people merit the experience, look, feel and quality of a product over price. Although pricing is an important factor, because we are a business after all, HP strives to offer a balance of affordability, functionality and premium customer experience. We offer three basic products to cover the range of price points within the netbook category in order to bring value and accessibility to customers.

Madhav Narayan: As the netbook segment is very price-sensitive, pricing is one of the key strategic approaches when it comes to netbook models. Samsung provides consumers and businesses with a more affordable, value-for-money range. Samsung also offers a comprehensive netbook line-up with innovative designs and advanced technology. These netbooks are designed specifically for mobility and are sold at a competitive price as they contain all the necessary features for data access.

CME: What incentives do you offer the channel to sell your netbooks?

Mark Prosser: Acer is a channel-only organisation and therefore support for our channels on all our products is what has helped drive Acer to become the number one mobility vendor in EMEA. We have channel programmes in place that offer incentives on all our products. Updated point of sale, rebate programmes and ongoing training are just some of the incentives offered to the channel.

Alan Chu: Incentives vary from country to country, however we communicate the unique features that differentiate our award-winning solutions. For example, the MSI Wind U160 has already won Germany’s high-profile iF product design award for its unique design. The Wind U160 is less than one-inch thick and weighs just 1kg.

Madhav Narayan: With the netbook segment being very price sensitive, margins are limited in comparison to notebooks. However, as the segment has a 26% share, the volumes are huge and the absolute margin for the channel is very interesting.

CME: Given the low margins associated with PC hardware, how can the channel make money from selling your netbooks?

Madhav Narayan: Samsung has a strong relationship with the channel and we plan to maintain the relationship by continuing to make the latest technologies within the PC industry available to them. Our new branch of netbooks has seen a large demand due to its small, portable design. As mentioned earlier, the channel relies on volume margins rather than transactional margins. Also, the channel margins on our notebooks are high and this compensates for any losses on netbooks.

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