Manufacturers form alliance to open up ‘whitebook’ opportunities

For several years major computer component manufacturers have been wondering if the success of system builders in the white box market can be replicated in making white books to meet the exploding demand for laptops.

This week resellers will be able to find out when Tech Data Canada opens new inventory under a program carrying the Intel stamp of approval.

One aim of program — which so far includes chassis manufacturers Asus, Compal Electronics and Quanta Computer — is to get vendors to standardize parts or interconnects for parts for white books, which will lower costs.

But David Allen, Intel’s North American distribution sales manager, told reporters Tuesday the plan lets system builders fight brand names such as Dell, Lenovo and Hewlett-Packard

“We’re really allowing the channel to offer customized, differentiated notebook offerings with strong support that allow them to compete against major OEMs for the first time.”

The education market, which is price sensitive, could be one sector white books could be targeted at, he said.

Intel is backing the program in two ways: First, to assure buyers, systems assembled using approved parts will carry a “Verified By Intel” (VBI) logo.Second, to assure system builders the packages they assemble are solid, Intel will be the company they will call for component problems. VBI components will carry a two-year warranty.

“We’ve been encouraging resellers to get into the mobile business because the market is changing,” explained Doug Cooper, Intel’s Canadian manager.

Sales of laptops to consumers now exceeds desktops, he noted, and while desktops still outnumber laptops in the business market, that won’t last long. 

“If resellers don’t react to the change they’re going to be left with a skill (building white boxes) that’s not longer viable,” he said.

The move could be what system builders and buyers need to legitimize white books, said Michelle Warren, an industry analyst with Evans Research of Toronto. Buyers, especially businesses, are staying away from white books because they are no-name brands. 

“The biggest hurdle for them is the brand name,” she said. But if Intel’s assurance can get into the minds of buyers, system builders will benefit.

So far seven building block components have been approved, including connectivity standards for hard drives, optical drives, LCDs, keyboards and a standard rechargable battery. Not only does this help keep costs down, it will also enable resellers to stock spare parts.

In a move which it says is aimed at keeping control of costs, Intel has has appointed BrightPoint Inc. of Plainfield, Ind., as its master distributor for the components for North America and Europe. Approved IT distributors (called Mobile Value-added Distributors) have to buy through BrightPoint.

In this country Tech Data Canada has been appointed an MVD, in part because it was already in the white book business through an agreement with a Compal division.

Ray Gonsalves, the distributor’s director of product management, said interest among Canadian system builders he’s talked to since Intel announced the VBI program was coming several months ago has been strong. “There’s a fair amount of anticipation in the channel,” he said.

He estimated system builders will see a 10-to-15 per cent saving with an approved component over a non-VBI component. However, he also noted that a number of components such as operating systems, memory and hard drives aren’t covered yet that could affect the overall price.

A deal on including Windows in VBI systems may not be far off. David said Microsoft Canada has “indicated they’re willing to sit and talk with us,” about special Windows pricing.

Gonsalves, however, is not overestimating the steep road system builders have to climb.

“Notebooks are a large and growing segment of the market and white books will either have a niche or mainstream place in it,” said Gonsalves. “At this point they remain a niche.

“VBI can possibly move them into the mainstream, but I anticipate Tier One manufacturers will be looking and competing with this offering as well.”

Intel also announced that for the business PC market it is releasing a platform for major manufacturers and system builders called vPro for its just-released Core 2 Duo chips. It allows IT managers to better control and secure desktop computers through Intel’s Active Management andvirtualization technologies. The platform requires using one of four CPUs and Intel’s 965 chipset.

Comment: info@itbusiness.ca

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