PC vendor Compaq is under fire from dealers and distributors for not offering price protection on old stock after replacing its entire commercial desktop PC range in July.
The new Deskpro range hit the market with higher specification levels and lower prices than the machines being replaced. This presented some channel players with the problem of getting rid of over-priced obsolete kit.
Compaq decided that no price protection at all would be available on the old commercial desktop machines, forcing some dealers to suffer a margin cut to get rid of the stock. But the vendor has extended its free monitor promotion on these models and has bought back old stock at cost from some resellers.
Jonathon Adams, Compaq commercial business unit director, explained that the manufacturer wanted to kill off demand for old product. 'We decided to keep the price artificially high so that our channel would not find demand increasing for something they could not supply.'
The indirect channel's response to the move was less than enthusiastic.
Bruce Richardson, PC division business development manager at Ingram Micro, said: 'If you are a dealer holding large amounts of stock, you could have a big problem. As things stand, there is a shortage of the new Deskpro machines anyway, but when more of them come on stream people will find it very difficult to sell the old stuff without reducing the price.'
One Compaq reseller said some dealers have made the problem worse. 'Some manufacturers do suffer from a degree of arrogance, which I find surprising.
But a number of dealers use price protection to try to take the vendor for a ride, claiming it on stock they have already sold but haven't yet shipped.
'Manufacturers and dealers need to work closely on this sort of thing.'
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