Big Brands With Big Bucks Have Big Plans

that not only overshadow previous attempts but certainly give you pause when it comes to making product recommendations in the areas of printers, displays, storage and mobile products. These companies are staking out a beachhead in an attempt to take on the current market-share leaders, which they hope will buckle under the pressure of their financial strength or be intimidated by the depth and breadth of their offerings. This is going to be a costly and interesting battle to watch as it pits entrenched companies such as display-maker ViewSonic against sexy consumer-electronics powerhouses Samsung, Sony and Philips, along with NEC-Mitsubishi.

These companies are making a host of mesmerizing moves aimed at shaking up their feisty competitors, and seem intent on wreaking havoc on the status quo. Don't be surprised in the coming months when they start making acquisitions of key independent players in the peripherals space to accelerate their strategies. They are also spending millions of dollars to court VARs and offer a wide range of incentives to sell their products.

One of the most interesting recent developments here has to be the managers these electronics giants have recruited to shape their channel strategies and pump up marketing efforts.

Today, these firms employ some of the most savvy channel managers in the industry who seemingly possess a great deal of freedom when it comes to running their businesses. We'll see if that lasts. They all share the long-term goal of being everything to everybody; they say they want to be the sole source of components and branded peripherals for solution providers. While it is still difficult to decipher exactly how they will balance so many business objectives and programs, for the moment these companies are focusing on capturing share in the brutal market of add-on LCDs. Can you think of a market more devoid of margin than displays? One executive I interviewed swears not a single display manufacturer is making a profit in this sector. That's how fierce the competition is and how far average selling prices have fallen in recent months. But that is where these companies are predominantly focusing, with the exceptions of Sony, which is also vying for a piece of the notebook computer market, and Samsung in low-end printers.

In the past, when foreign-owned conglomerates from Japan, Korea or Europe set their sights on the IT market, their executives spoke of how they were going to transform themselves from manufacturers of electronics components or printer engines into branded solutions. But they viewed the channel as a necessary evil, paying it lip service while salivating over a direct-sales strategy that would win big points back at headquarters. Wave after wave of these efforts were unsuccessful. Fast-forward to today. The companies in question have assembled a group of creative and innovative marketing executives who are providing support to their channel executives. More important, they have produced some competitive products using low-cost components. No wonder why profits are being driven out of the business.

Philips, the Netherlands-based electronics giant more famous for lightbulbs than lighting up the channel, hopes to change its perception. The company has a budding channel effort under way led by ViewSonic veteran Matt Gill, who has assembled a scrappy team of execs looking to steal market share not only from Gill's old employer, but from NEC-Mitsubishi, Samsung and a host of others. Philips has some impressive display technology at its disposal, but Gill has one tough job on his hands. If Philips is serious, it would be wise to drive some players from the display market or make a key acquisition.

Perhaps showing the most promise is Sony, which is generating some serious buzz in the channel. The work of Anthony Piazza and Joe Natale has not gone unnoticed by many solution providers and distribution executives, who are integrating more and more of Sony's products into their IT solutions. While Sony is showing promise in displays and notebooks, it seems intent on being a broad supplier of components and storage products, which undoubtedly will be a difficult message to manage.

Meanwhile, Samsung is setting the bar for creative marketing under Peter Weedfald, and its channel executives have a convincing story. Rey Roque and Helman Lukito recently rolled out a series of incentives to spur sales of their display products and are breaking into the low end of the laser-printer market.

Do these vendors finally have it right? Let me know at [email protected].