Margin Makers: Peripherals Stay Up In A Down Economy

Projectors
The number of projectors passing through the CRN Test Center this year with integrated Wi-Fi, smaller and lighter form factors and increasingly better presentation quality and performance has been noteworthy. From Panasonic Corp.'s new entries into this space, with wireless networking and compact design, to NEC Corp.'s NP3151W that takes advantage of wide-screen presentation, to ultraportables from InFocus Corp., manufacturers have been busy bringing new technologies and use patterns to the fore this year.

"We're better off because prices have come down, they're producing better-looking projectors, which produces some demand as people want to move to a smaller and lighter projector," said Dwight Gaut, owner of LawDesk Computers, a Seattle-based solution provider. Gaut said, by and large, projector margins "don't fluctuate up and down" and have been steady; his preferred vendor in the space remains ViewSonic Corp., Walnut, Calif.

LCDs
When this year's Channel Champions survey results were tallied, one of the more noteworthy set of results around any product or technology area were the margins connected to LCDs. Of the manufacturers whose display product lines we surveyed with resellers, margins on LCDs ranged anywhere from about 17 percent to 22 percent.

Why is that significant? Because, according to research firm DisplaySearch, Austin, Texas, LCD prices across the board began by midyear to encounter some pressure, largely due to significant new manufacturing plant capacity that's come online in 2008 and earlier. (In June alone, the firm said, LCD prices dropped by 8 percent.) So how are manufacturers providing VARs with margin opportunities in an LCD space with this dynamic?

One word: Options.

For example, Samsung this year has provided a range of new LCDs, 20 inches and up, with wide-screen, built-in Web cam and audio, tilt-to-vertical capabilities and HD functionality. Systems like the SyncMaster 275T Plus, a 27-inch, wide-screen system, are priced between $650 and $1,000 but provide many of the benefits of solid, dual-screen solutions but with the power consumption of a single system.

ViewSonic has ramped up its 22-inch to 24-inch solution set, also targeting much the same strategy. NEC executives say they've put extra effort into providing complete technical services for VARs and customers, providing HD image burn, and hardware and software modification prior to shipping—activities that can allow VARs to focus on the solution sale.

And then there are vendors like Hewlett-Packard and Acer America Corp., San Jose, Calif., which have in recent years seen their volumes of PCs climb tremendously; along with those volumes, their volume and share of LCD sales has also increased.

Scanners
As document-imaging solutions and electronic document processing become more common, scanners are playing a bigger role in customer networks, and VARs that play their cards right can see extra margin from the software and services that go along with networked scanners.

"There is some ad-hoc scanning going on, but more and more we find out that the resellers are involved in bigger systems implementations. If you have a scanner, you probably have a need for storage. They also have networking if they're moving images around a network. It's really a nice component to a very profitable system," said Don McMahan, regional business manager and vice president of sales,document imaging division, U.S. and Canada, for Kodak, Rochester, N.Y.

And in spite of ups and downs in the economy, scanners have been showing double-digit growth for the past 10 years as both enterprise and SMB companies deploy imaging solutions, he said.

Kodak makes its own Capture Pro imaging software, giving VARs the ability to make money both on the software and on installing and configuring it. "We find that software often leads the way in these big opportunities," McMahan said.

VARs partnering with Fujitsu Computer Systems Corp., Sunnyvale, Calif., can drive up margin by participating in the vendor's One Capture Alliance program, a tiered partner program that gives VARs rebates of 1 to 4 percent based on annual sales volume. VARs that sell $185,000 worth of Fujitsu scanner products in a quarter get 4 percent. At $50,000, VARs get 1 percent off.

Methodology
This 2008 Margin Makers report on peripherals is based on data from our 2008 CRN Channel Champions research from earlier in the year, combined with follow-up discussions with vendors and VARs, and an up-close look by CRN Test Center engineers at the technology platforms themselves.