Broadliner pact fuels margin fear

The channel is uneasy after Iomega's dumping of Northamber forActebis

Iomega has ditched Northamber and signed up Actebis as a pan-European distributor, raising fears that margins will be destroyed by the addition of another broadliner.

One channel source said: 'This is another aggressive broadliner that will reduce margins even further. Margins are less than one per cent in some cases. At the same time as appointing Actebis, it's taking on more retail people. The inference is that distribution will lose its retail business and Iomega will focus on this channel separately.'

Ray Rice, business manager at Iomega distributor CMS Peripherals, was less perturbed. 'We do the lion's share so we understand they don't want all their eggs in one basket,' he said.

Simon Chamberlain, Iomega UK distribution sales manager, denied claims that Iomega was trying to go direct. 'Dixons was at one stage direct, but it went back into distribution because we decided to route all our business that way,' he said.

Remaining distributors are CHS, CMS, Ideal, Ingram, RKD, and Actebis.

Ingram Micro has also been made a pan-European distributor.

At the same time, the removable drive vendor reshuffled its European sales team, boosting its focus on the retail market.

The move comes as sources suggested that Srini Nageshwar, senior VP for Europe has had his responsibilities diluted in a management shake-up after the company had vastly over-estimated sales targets.

Nageshwar denied his role had changed, saying rapid growth meant needed a matrix management structure. He admitted that Iomega had added a 'huge amount of capacity', but said this was part of a long term strategy.