Oh, how the mighty have fallen. IBM has been knocked out of the UK's top five PC suppliers by not just a tiny company in comparison to the computing behemoth, but by Tiny Computers, a home-grown supplier of its own brand.
If this announcement was made in the pub, most people would round on the obviously smashed blasphemer and ridicule them for believing such speculative twaddle. The following morning that same pack would choke on their hangover bacon sarnies to read that none other than research giant Gartner Group was the purveyor of such damnable lies.
According to Gartner's report on first-quarter PC shipments, Market Dynamics Q1 99 PC shipments, IBM has even been beaten by Toshiba, which entered the PC market two years ago, pushing Big Blue into the latter half of the top 10. Even if the Toshiba figures include notebook sales, last time we looked IBM also had a wide range of portable products. It's public knowledge that the IBM PC business has been experiencing financial problems in the past six months, but Gartner's figures suggest the manufacturer could be losing its grip on the UK PC market.
As expected, Compaq is leading the way with 18.4 per cent of the market, followed very closely by Dell on 16.4 per cent - Compaq's more established corporate customer base is the most likely reason for the narrowing gap. Then there's the predictable chasm to the third player, Packard Bell/NEC, with just seven per cent. Tiny is sitting happily in fourth with 6.1 per cent and is, understandably, very pleased with itself. This is as clear a sign the channel will ever need that retail is a very real threat and that the market for home-grown PCs is strong in the UK - supporting the PC Dealer/Compubase research showing a thriving assembly market.
Tiny told PC Dealer that its business rocketed by 72 per cent last year and is claiming that it outsells Dan, Viglen and Gateway combined. Tiny has come a long way in a very short time. Three years ago, its chain of non-high street showrooms was less than half the current total and this rapid pace of expansion certainly shows no sign of abating.
Back then, Tiny explained that opening a showroom was not actually expensive as it was all just a front, with no kit held on the premises except that on display. Running such a store, in terms of decorating, rent and staffing (between one and two people on average) is not very high initially.
The company usually recoups the initial investment in the space of a month or two. Tiny now has 105 showrooms in the UK and is aiming to have anything up to 130 by the end of the year.
Whether or not Tiny has the legs to keep up the pace to maintain top five status is a point for debate, but IBM's tortoise impression points to serious difficulties with either its products or its sales strategy. Serious changes have to be on the way. Compaq may have led the charge by rationalising its direct dealings with the channel by reducing its key partners radically, and IBM will have to act.
Those resellers who think IBM will not change its channel dealings are exactly like those in IBM who could never have conceived the giant would fall to a growing chain of showrooms by a relative unknown.
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