Altec Lansing does the splits

GATINEAU, Que. – Altec Lansing has decided to separate its PC speaker product lines for the retail and white box markets.

This is the first undertaking of its kind in the company’s 63-year history. Starting March 1, Channel Connect program system builders will no longer compete with retailers

on price. Typically, customers leverage retail pricing against system builders to force a discount on the price of Altec Lansing speaker systems being sold with white boxes.

The product differentiation is a way to better support the needs of system builders, who usually operate at lower margins than their retail counterparts, Larry Johnson, Altec Lansing’s Canadian sales director, said this week in an interview at CompTIA Canada’s system builder conference here.

“”We are partnering with these people to make them more money,”” said Bob Santella, Altec’s national sales manager for system builder and enterprise sales. “”It’s tough to make money turning screws making computers. How as a vendor can I help them? That’s the kind of mentality we’re taking with this channel. We’ve got to make them more profitable. If they’re there tomorrow, we’re still here,”” he said.

The company’s new line for system builders includes a complete spectrum of products, including powered audio speakers, inMotion portable audio speakers, laptop audio speakers and what are called interactive audio products – namely speakers. The products are designed for users of all kind, with certain products targeted for the education, government and corporate sectors.

Santella said he isn’t able to project how the new program will affect the margins of system builders.

“”It’s difficult to say because each different sector they’re going into is different. You’ve got government, education, the end user and distribution. The numbers always change. Our job is that we want the attachment, we want value-added to whatever you’re putting out into the market,”” he said.

“”A speaker manufacturer has never done this before,”” commented Teddy Chan, owner of Hamilton, Ont.-based Alliance Computers Inc.

“”I think this is the biggest thing that’s ever been done to support the channel.””

Chan said that manufacturers of other products, such as printers, have offered similar initiatives for system builders. He added that Alliance Computers benefited when manufacturers differentiated their products for the white box and big box channels.

Altec Lansing also announced at the conference a new channel support initiative giving white box manufacturers a more competitive price point system, which is designed to help them purchase a wider array of products at a better price. Johnson added this initiative will increase margins. “”As altruistic as that may sound, Altec made it clear that the Channel Connect program is being put into place to better its already strong market share,”” he said.

“”The systems builders aren’t making huge margins and it’s been very tough for them to grow through the years,”” Johnson continued. “”It’s not that we’re going to give them excessive margins. It’s just for the first time Altec is playing at a margin level that they need to support Altec. By getting behind them, they’re getting behind us.””

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