Former Impulse chief opens Compal subsidiary

Alok Sarna, the man who brought the Impulse notebook to the Canadian market, is back.

This time he’s teamed his company, Compal Electronics Inc. – the second largest chassis manufacturer in the world – with Tech Data Canada to offer a white book product for system builders.

Sarna has established Bizcom Electronics Inc. (Canada), which, along with Bizcom Electronics Inc. of Milpitas, Calif., are wholly-owned subsidiaries of Compal. Sarna, director and vice-president of Bizcom Canada, said the Milpitas, Calif.-based Bizcom operation is responsible for service to OEM customers and the channel. Sarna has signed a deal that will provide Tech Data Canada system builders with an unbranded laptop that can be customized to client needs.

Compal is better known in the Far East than in North America, and Sarna wants to keep it that way. Compal builds notebooks for several of the top tier manufacturers.

“We like to have everyone know our customers,” he said. Compal, which helped Sarna produce Impulse notebooks several years ago before it went bankrupt, has built more than six million notebooks in 2003 alone, he added. Compal’s target for notebooks in 2004 is nine billion units.

“We do not sell under our own brand. You will not see our name on a notebook. We will not create an end-user brand. We are a true OEM source manufacturer,” Sarna said.

Intel Canada Ltd. will also be a partner in the Compal/Tech Data offering.

“The three of us (Compal, Tech Data and Intel) came to this understanding: We need a change,” Sarna said. “In this market you cannot be traditional anymore. You need not to be handcuffed. You have to adapt. Change is for the better. And when tradition is challenged they do one of two things: stick to old traditions or make up new ones.””

Bizcom has already hired a sales team and account managers for the program. Tech Data wants to enable the channel to build white books, said a company official.

“The key point is (Compal) is a large stable partner that is proven in the marketplace. They have strong relationships and they found it important to work with a distributor, and they engaged us,” said Ray Gonsalves, director of product management purchasing at Tech Data Canada, based in Mississauga, Ont.

Gonsalves acknowledged that white books have gained a poor reputation over quality issues, but he insisted partnering with a proven manufacturer such as Compal will alleviate those concerns.

“Intel has advocated the white book channel and in order for that channel to work well they need to operate with supply chain that answers concerns of quality,” Sarna said.

“This is truly a white book rather than a CTO (configure to order) notebook. It is unbranded, like buying a motherboard or chassis,” Gonsalves said. The Compal/Tech Data program is strictly for system builders and resellers who are interested in building systems for end users.

This particular offer is for Intel-based white books only, Sarna said.

“When you look at Centrino, it is moving up the charts in demand. AMD is not on our roadmap currently. We feel that the product line touches all the bases,” Sarna added.

According to Gonsalves, a reseller could make big margins through the program in several ways. One way is to compare a fully loaded Tier 1 system to a fully loaded white book and demonstrate to the customer the advantages. The second way is to up-sell the customer with other options, with additional gross profit dollars by targeting a $1,500 sale rather than a $700 sale. The third way is to sell a white book instead of white box or a fully loaded white book over a standard Tier 1 system.

Resellers can either order a non-configured base chassis that includes mainboard, LCD screen, keyboard, optical drive, battery and AC adapter that will ship in 48 hours or a configured system that ships in 72 hours. Components in this program include Intel processors, Seagate or Fujitsu mobile hard drives and Kingston memory. Integration will be free to all resellers or system builders who purchase components from Tech Data. Tech Data has a 12,000-sq. ft. facility that is ISO 9001 registered for configuration. The Compal chassis carries a one-year warranty that can be upgraded to a three-year warranty.

Tech Data hopes to have 100 resellers on board within the first three months, Gonsalves said.

“We are really seeing this as a growth sector and it rounds out our product offering and can lead system builders into this marketplace,” Gonsalves said.

Sarna agreed that the initial target should be about 100 resellers. “Few are buying in volume and it is more desirable to have breadth and coverage and reach more markets,” he said.

Paul Furtado, vice president of Hamilton, Ont.-based system builder Audcomp Computers, said with the decrease in the price of notebooks, white books will do well in the consumer/home user market.

“Although price is definitely a concern for corporate clients, their IT departments tend to put a lot of value in the longevity of platforms as well as warranty support availability. It is in these two areas where I see white books falling short,” Furtado said.

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