IBM has pulled out of the desktop retail market in New Zealand, formalising a situation that has existed for the past few months.
“We won’t be selling the new C and S series of Aptivas here,” says PC company country manager Julie Halpin. The new Aptivas were introduced in May to Australia where they have been very successful. However, in New Zealand, IBM has been running down its PC supplies.
Halpin says Aptiva wasn’t a profitable brand in New Zealand last year. “New Zealand is extremely price-sensitive. We were working on the same price points dollar for dollar as Australia. The market moves so quickly you can end up with zero sell-through. We won’t sacrifice profitability for market share.”
Researcher IDC says IBM was probably number three in the retail market in 1996, behind Compaq and Hewlett-Packard and about level with Packard Bell, which sells out of Australia, primarily into Noel Leeming. “It’s very much a case of who's got what price on the day between Compaq and HP,” says IDC manager Graham Penn. “Customers are not distinguishing between brands.
“The New Zealand market is very competitive and too small. And it’s going to get worse when Gateway comes in within a few weeks.”
Halpin says the decision is not permanent and will be reviewed from time to time.
IBM will still have a presence in the retail space with its Thinkpads and Options lines, such as disk and joy sticks.
“But we won’t have desktop multimedia in the retail space.”
Warranties and maintenance contracts will be honoured.
Halpin says the New Zealand market is more aggressive and price-sensitive than Australia, with a lot of direct sales from companies such as PC Direct. “There’s an over-supply of brands.”
Second-quarter figures to be released this week by IDC will show that IBM is a long way back in third place in the corporate desktop market, where Digital has become the leader ahead of Compaq. However, it should be borne in mind that Digital has a mid-year fiscal year and would have pushed all it could into the channel for the quarter.