Local gadget channels arguably suffer just as badly as bookstores from internet parallel importation. Showing off the company’s 2011 product range (first seen at CE) to customers and channel partners yesterday, D-Link’s Australian marketing director Maurice Famularo told El Reg the question of channel support is becoming very thorny for anyone addressing the consumer market.
Customers buying directly over the internet don’t much harm vendors, since they still score the sales. However, down at the local level, it is just as hard for territory managers to meet their own targets as it is for their channel partners.
Vendors can respond by diversifying their channels – something D-Link already has in mind in Australia. Famularo identified two targets for the company during 2011: to expand channel relationships in the electrical installation sector, and to start building channel in the home hi-fi and A/V markets.
Part of D-Link’s response – reflected across the vendor market – is to adapt the products to the kind of channel that will sell or install them. The sparky screwing the IP security camera above the counter of a corner store doesn’t aspire to LAN expertise: instead, the ethernet switch detects the cameras attached to it, creating a VLAN and assigning cameras to it.
While intensely competitive, that market is the beneficiary of conveniently converging drivers: insurers and governments have put a rocket under the security camera market just as older VHS-based systems need replacing.
The home entertainment market is another matter: it’s a highly polarised business, with a gulf between the general consumer and the big spender. Vendors such as D-Link already share (physical) shelf space with the home entertainment sector; it’s the high-end “smart home” system-plus-installation channel that Famularo wants to crack. “We’re talking to that market, but it’s going to take some time,” he said.
Which brings us back to the more traditional tech channel. Both vendors and channel are being forced into adjustment, but what will that adjustment look like?
Part of the adjustment will be one of the Australian channel’s periodic shake-outs, but Famularo also agreed that vendors have to adjust their international pricing strategies. Some costs – international handling and local warranty – are hard to change, which means there will always be buyers willing to bet product quality against warranty support. But too great a gap between Australian and overseas prices is inviting trouble for the local channel.
There is another angle: as vendors increasingly marry product to cloud services, they can play a localisation card that will be hard to beat. It’s a plus and a minus for the vendor.
The Boxee Box, for example, can be localised to the user’s territory (which would seem to provide an angle for channel support). It must be: otherwise it would risk breaching the Byzantine rights deals covering the content it is trying to serve. Compliance, however, means that until D-Link gets all the rights deals in place, the Boxee Box has access to less content than is available to the freetard. ®