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Sunday, March 16, 2008

Intel levels whitebook playing field

Intel, late in 2007, flexed its muscle and stature in the tech world and began some big changes in its whitebook channel program. The company then followed-up by introducing its standardization model, "Jackson Bay" motherboard to the whitebook industry. Whitebook is the computer industry term for generic or non-brand notebooks. Although the climb for custom system builder VARs (Value-Added Resellers) to profitability in whitebox may seem a long, slow drive there is good reason to believe otherwise.

Whitebook system building has gone from being challenging to being attractive. Unlike the bulky whitebox, (desktops) building a whitebook represents big challenges for VARs and mom and pop resellers. Aside from the relative small size of whitebooks, system builders face component compatability issues (hard drives, ports, etc.) and a total lack of support from Original Device Manufacturers (ODMs).

Until now the notebook market playing field was owned by tier one vendors like Dell and HP. Clearly, they had no interest in the VAR whitebook market. Tier one vendors had the total support of suppliers and designers. But, what Intel's action means for VARs is the possibility of replicating whitebox sales revenues in the whitebook market. The success stories from VARs are pending, still. However, there is understandable excitement among resellers about the Intel whitebook motherboard standardization model. The timeframe may be a quick one before those watching for results in this whitebook market development make a commitment with a system builder the size of Equus leading the way.

No better partner for Intel than custom systems builder Equus Computer Systems has taken up Intel's new mobility whitebook motherboard. Between Equus' sales generating experience, a track record for others to follow suit and a down economy driving VARs to dig up business, ramp-up in sales in the whitebook market may not be far off.

A soaring notebook market

Tier one vendors such as Dell have experimented in the whitebox market. Dell left the market after a short two years ostensibly because they found customers preferred brand. The resellers' view: Dell's whitebox options totaled one model, and, it was priced higher than systems in stores. The 3 billion dollar whitebox market was hardly saturated at the time Dell exited.
Presently, the industry has seen the desktop market reach its saturation point. Coincidentally, the industry fell in 2007 from its first place sales position to apparel retail sales for the first time since Internet sales have been recorded. Who said this is bad news: The industry, in the same year, began experiencing soaring notebook sales. VARs, on the other hand, attest to the near impossibility of building whitebooks cost-efficiently because of widescale incompatibility involving motherboards, ports, cases and just a lack of support from Original Device Manufacturers (ODM).

Where is the whitebook market?

The common perception of tier one vendors dominating systems sales on all fronts in not so. The lion's share of the whitebox market belongs, not to tier one vendors, but to VARs. Now, with compatability issues laid to rest VARs can bite off their piece of the whitebook market, too. Where might VARs focus their sales? Precisely, on the previously mentioned 3 billion dollar whitebox market. When an in-house team recommends (less then a year after Dell exited the whitebox market) that the company return to the whitebox market and focus on Blacks and Hispanics in America that is to say the market whitebox/book market is there, still. The low-income sector represents an overlooked market and people with limited Internet access through the public library. Valuable as is the information it is old news for VARs.

Who is better suited for the whitebook market?

Although Dell, with its direct model ( and retail, now) has been touted as best suited among tier ones for the whitebox market, really, it's a better fit for VARs, independent contractors (ICs) and even more IE-Networks; Independent Enterprise Networks. They have the advantage of established and establishing relationships in their community in ways no tier one vendor can do. IE-Network members, or individuals, those at-home computer techs, engineers and hobbyists are precisely the VARs non-employee force which can penetrate the whitebook market. These are individual men and women who build for different reasons, whether financial, fun or social activism.

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