Logitek drops Toshiba in margins quest

Networking distributor Logitek has decided to stop carrying Toshiba products as part of its strategy to focus more on higher-margin wireless and security technology.

Networking distributor Logitek has decided to stop carrying Toshiba products as part of its strategy to focus more on higher-margin wireless and security technology.

However, the move was questioned last week by one reseller, Repton Computers, which said it is expanding the range of Toshiba products it carries.

Logitek said it is increasing its focus on wireless networking, internet and ebusiness security as well as convergence technology. It has been integrating these into its portfolio for the past 12 months.

Managing director Bernie Wheaton said the company made the decision in the hope of maximising profit. "We are focusing on margin-rich vendors and this has meant moving into the high-end market," he said.

Although Wheaton admitted that Toshiba had traditionally been a healthy revenue earner for Logitek, he said it no longer fitted in with the company's strategic direction. Logitek has not confirmed which other vendors will be dropped from its portfolio.

Vendors to be retained include internet security manufacturers Top Layer and NetScreen, wireless networking vendor Symbol, convergence specialist Innovaphone, and core networking partners Perle Systems, MultiTech, D-Link and Allied Telesyn.

Guy Wright, Wintel sales manager at Repton Computers, rejected Logitek's strategy. Despite pressure on margins, products from companies such as Toshiba can offer real benefits to resellers, he claimed.

"Dropping Toshiba doesn't seem a particularly good move because many of our customers that buy Toshiba are long-standing and they prefer certain brands," he said.

"It's tough out there, but Toshiba is a good brand. We are actually expanding on Toshiba because so many customers buy it."

The commodity distribution arena sees a lot of competition between broadline distributors such as Computer 2000 and Ingram Micro. Nick Culley, product manager at broadband distributor Midwich, said: "It doesn't surprise me that they are saying the margins are too thin in tier-one distribution."

Barry Spalton, managing director of reseller Procom, said: "There are distributors out there who are not providing enough service. This is good for us because we can now sell wireless Lans and have the site surveyed on our behalf by Logitek, which adds real value."

Also published in Computer Reseller News