System builders under siege
Larger vendors dominate PC channel sales as dropping prices hurt margins of small assemblers
Big PC vendors are increasing their share of sales through the channel in Europe at the expense of smaller vendors and local assemblers, according to research. However, some channel players have disputed these findings.
Analyst Context found the proportion of business claimed by system builders and smaller PC vendors has shrunk from 29.3 in the second quarter of 2003 to 24.5 per cent in Q2 this year.
The top three channel players - Hewlett-Packard (HP), Acer and Fujitsu Siemens Computers - grew their share of total PC unit sales from 51.6 to 55.6 per cent.
Middle-ranking or specialist vendors such as IBM, Sony, Toshiba and Apple gained one point compared with Q2 2003.
Jeremy Davies, senior partner at Context, said big-brand vendors have cut prices. "A-brand vendors' PCs were always more expensive," he said. "Since Dell, these vendors have learned how to produce them more cheaply."
The decline in prices has left local players fighting over diminishing margins, Davies added.
Richard White, business manager at system builder Centerprise, said the battle between Dell and HP has affected the overall market. "In a competitive situation they are both very, very aggressive on price," he said.
But White questioned whether system builders operate in the same market as Dell or HP. "System builders are not looking for a box drop of a large quantity of PCs. Our market is constantly moving, which is why I think the research shows our market share has changed," he said.
Nicholas Walters, marketing head at Mesh, said: "Recent IDC data showed significant SME and corporate growth. And we don't appear to be losing market share."