Taiwanese computer maker Shuttle has ended a distribution relationship with Sato Technology, instead opting to run with only two distributors in Australia, Altech and Multimedia Technology (MMT).
James Lin, the Taiwan-based assistant to Shuttle chief executive CK Hung, said Shuttle had an agreement that Sato would be the company's exclusive distributor last year and sales targets were set.
He confirmed that as of June last year, those sales targets weren't being met and the company had decided to appoint another distributor. In September 2004, Altech and MMT were appointed to carry Shuttle gear.
"They [Sato] were achieving a low percentage of their goal. At Computex [trade show last June], we informed them that we were looking for another distributor. If [Sato] had met the numbers there would be no need to have another distributor," he said.
However, Sato product manager Lou Liu claimed Sato had not received official notification that its distributorship with Shuttle had ended.
He said the distributor had a "sole distribution" arrangement with Shuttle and the vendor had appointed other distributors without telling Sato, he said, adding that there was "no official document to end the contract".
He said Sato had treated the Shuttle XPC small form factor PC product as "our baby product in Australia" and its target was based on one year of sales. The distributor was still trying to negotiate to remain a Shuttle distributor before taking further action, he said.
Shuttle's Lin, however, said Shuttle's lawyer had written to Sato informing the company that its contract had ended after receiving a letter from Sato's lawyer stating that the vendor couldn't appoint a second distributor.
Shuttle chief executive CK Hung said in a statement: "XPC [products] are used in homes, offices, schools, military and many other places. Shuttle has developed a limited distribution policy in most markets.
"We feel that Australia has lots of potential and we need limited distribution here," he said.
Sydney-based Altech has offered to handle returns to manufacturer of products already sold by Sato.
Altech and MMT are distributing Shuttle's line of XPC small form factor bare-bones PCs. Shuttle launched its first XPC, the SV24 in July 2001 and started distributing here exclusively through Sato.
Altech GM of sales and marketing Safa Joumaa expected to pick up some new Shuttle customers following Sato's removal from Shuttle's distribution list.
Altech had sold over 400 units of the XPC since Christmas Eve, Joumaa said.