I was getting a quick bite with a PC components distributor yesterday when he told me about one customer who had come in to close his account. The reseller, who had been on the books and sold well for two years, had decided to get out of IT and open up a cafe.
Why? In short, he blamed the iPhone. He didn't see a future for small resellers like himself because desktop computers were being replaced by smartphones that could email, play games, surf the web and, well, make phone calls.
Selling PCs to consumers is a tough business that has been getting tougher. The need for a family PC has dwindled as laptops become a one-per-person commodity. Companies are often just as happy to give their staff laptops if it means they can work from home after business hours, and netbooks and laptops are popping up in more schools.
The smartphone boom has further weakened the case for a family PC by putting the "personal" into personal computing.
And then there's the competition. JB Hi Fi's recent $76 million profit for the past six months has got to come from somewhere. If you look in last year's annual report the outgoing CEO Richard Uechtritz identified "Computers", which it started selling four years ago, as a growth area.
"We are very pleased with progress to date and estimate that we are now in the top two retailers in the category," said Uechtritz.
Games consoles have narrowed the margin with dedicated gaming PCs, and browser-based games such as World of Warcraft can be played across multiple (and portable) devices.
My colleague Will Maher, editor of PC Authority, argued that the trend towards high-resolution video and photo editing would commit consumers to desktops for the extra power and storage, but I'm not too sure.
Last November I profiled Melbourne reseller Amexcom. The shop-front retailer had shifted its business from walk-in consumer sales to making machines and maintaining networks for local business. The margins were better, long-term relationships with customers meant ongoing business and predictable cash flow.
How many resellers have the guts to stick it out in the consumer-only space? Tell me how it works, because it looks pretty tough from here. It might be time to read the last rites for the family desktop.
Issue: 315 | May 2013
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