Execs predict waves of consolidation, with less firms pushing more brands

IT channel to follow car industry model

Senior UK executives at Packard Bell and HP have claimed that the industry is likely to see a wave of consolidation amongst brands – which could leave it resembling the car industry.

Packard Bell UK country manager Sylvain Braeme and HP’s consumer business development manager Ben Perrin told PCR that current trends suggest that in the near
future the channel could be focused on a handful of vendors with numerous brands under their umbrella.

Braeme highlighted Packard Bell’s parent company Acer, which also owns eMachines and Gateway, as a prime example of the shift. “You simply can’t target the whole market with a single brand. You have to compromise and that leaves you at a disadvantage to a focused rival. The only way for a single company to cater for the whole market is to maintain separate brands that target different customer bases. You can see the same segmentation in the car industry for that exact reason.”

Perrin used the example of Compaq to demonstrate how HP is beginning to split its markets based on consumer brand. “HP stands for the rich, premium experience,
while Compaq is about just getting stuff done in a fast reliable way,” he added.

He dismissed concerns that customers might opt for the cheaper brand knowing that it is the same as a higher-tier brand. “Only people in the industry really know that the HP and Compaq brands are linked – the man in the street doesn’t always associate Toyota with Lexus for example, despite the fact that they are the same company.”

However, neither believes that new brands will emerge as a result of segmentation by vendors. “We may see some old names re-emerge from the channel’s past, but I don’t see any new ones appearing,” said Perrin. “If you look at netbooks, there has been a raft of non-traditional companies launching devices, but the top three in the market are familiar, established names.”

“It may mean increased levels of consolidation, especially as more vendors follow Acer’s lead,” added Braeme. “There is definitely a market for the various segmentations of the Acer Group, as there is for the Fiat, Volvo, Toyota and so on.”

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