The UK assembly sector is stronger than its European rivals, as branded PCs have become cheaper.
This was the finding of channel research company, CompuBase. Each year, CompuBase, in association with PC Dealer, carries out its national survey, sending it to its UK partner database of more than 14,000 sites, covering manufacturers, resellers, services companies and software publishers.
The assembly sector is particularly large and flourishing when it is compared with other countries that have indirect channels similar to the UK, such as France or Germany. This is possibly because branded PC prices in the UK have until now been extremely high compared with other European countries, which has opened the door to assemblers with cheaper products, creating a healthy market for their goods.
It will be interesting to see how the moves towards cheaper entry-level PCs by the high street retailers and supermarkets will affect the health of the assembler reseller sector.
By far the largest weight in percentage terms of the reseller sector remains the independent reseller, which along with assemblers form the two largest segments of resale activity in the UK. They each represent about 30 per cent of the total resale sector. Of this sector, half of these companies have a service activity, which also makes them by definition Vars.
In terms of the number of sites represented by high street retailers, it remains a relatively small percentage of the total number of reseller sites - about six per cent.
In the breakdown of the size of resellers, only 18 per cent of the total have more than 25 employees. More than 50 per cent of resellers are companies with fewer than 10 employees. This is an indication of an intensely fragmented business sector, which shows no signs of forming larger business units in the short term.
Two sectors that are rapidly heading in this direction are distributors, with the four leading pan-European broadliners steadily increasingly their stranglehold on the broadline market, in turn pushing other distributors into niche and specialist areas. Also, the burgeoning ISP and access provider sector is very volatile with the almost daily occurrence of mergers and firms changing hands.
Unsurprisingly, there is a concentration of resellers in London and the South East, which represents 36 per cent of the total reseller sector.
The market has a better spread across the whole of the UK than the other sectors, where there are very clear concentrations around London, the east, and the West Midlands. This is indicative of the reliance and importance users place on proximity, particularly where service is concerned. It also reflects the fact that the regional nature of a reseller's business is still a vital aspect of its business model.
Specialised markets show that there are a very high number of players in the banking and finance sectors. About 23 per cent of service companies, Vars and resellers state they specialise in this area, while surprisingly few recognise the potential of the telecoms sector - only five per cent.
Although the latter figure is low, the banking and finance sector has always been hungry for IT and remains unquestionably a very profitable market.
As far as technical skills are concerned, it is clear that the vast majority of resellers have developed skills in the networking sector, with a healthy 74 per cent actively promoting their skills in this sector, a substantial increase over the numbers who declared this last year. It is undoubtedly also a reflection of the move in the past year of SMEs towards networking, the internet and the use of email.
These are just a few results of CompuBase's National Survey. Further details of the findings, which give a clear indication of the state of the indirect channel, will be published in future issues of PC Dealer.
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2. When did James Hunt win the British Grand Prix?
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The closing date is 28 May. Details of Imation's association with the Jordan team can be found at www.imationgrandprix.com
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