Tablet PC vendor creates ISV program to boost sales

A Mississauga Ont.-based Tablet PC manufacturer wants to recruit new partners and strengthen relationships with existing partners in an effort to increase its channel revenue to 55 per cent in the next 12 months.

Electrovaya Inc. will launch a new program for ISVs to grow its Tablet PC sales

this month, said Julia Harrison, the company’s director of channel marketing. The OEM recently launched the latest version of Scribbler SC2100 Tablet PC, which is sold through distribution, resellers and its direct sales force in North America.

“”The ticket to the Tablet PC market is strategic partnerships with resellers and ISVs,”” said Harrison. “”These programs that I’m going to be churning out for ISVs and resellers are hopefully going to start the ball rolling into more aggressive Tablet PC deployment.””

Ideally, Harrison would like to have 100 ISVs partnered with Electrovaya, which also manufactures the PowerPad Series of notebooks. The company currently has less than 50 partners, including ISVs and resellers, in Canada and the U.S.

It has six direct sales reps at its headquarters and three in the U.S. who sell product and manage partners.

The current split between Electrovaya’s direct and channel sales is 50/50 but Harrison said that number varies from quarter to quarter depending on time of year, buyers’ moods and distributors. She added there have been times where it was 10 per cent versus 90 per cent in favour of distribution.

Steve Maric, global sales and marketing manager for SketchBook at Alias Systems Corp., an ISV partner, welcomed the coming Electrovaya initiative. ISV programs of other vendors help address the need for more Tablet PC applications,he said.

“”It’s a well-known fact that there aren’t enough Tablet PC-specific applications or apps that support ink-based or stylus-based computing,”” said Maric. “”These programs allow ISVs to gain early access to systems and development vehiclesand come to market with better products that run on their platforms.””

Maric noted that several other OEMs including Motion Computing Inc., which is partnered with Dell Inc., and Toshiba Inc. have already released similar programs.

“”It’s not new to the environment,”” he said. “”It’s visibly noticeable if they’re not doing these (types of) programs.””

Benefits of the Electrovaya program will include hardware discounts, marketing funds, joint press releases and marketing campaigns. Participants will be required to have pen-centric applications or apps that focus on the writing element of the system.

Harrison said while the number of ISVs developing software applications for Tablet PCs has increased over the last two years, there’s still a gap between software and hardware manufacturers.

“”We are looking to partner strategically with ISVs so we can provide a larger solution to clients,”” said Harrison, adding this is particularly important in the health care and education sectors. “”They don’t want a box, they want an entire solution.””

Electrovaya, which launched the first 2000 series Tablet PC last November, is offering resellers who purchase the SC2100 from the company directly an opportunity to take part in its spiff program. For example, a reseller purchasing 50 Scribblers from Electrovaya will they get $50 for every Scribbler sold to an end user.

Distributors including Ingram Micro and D&H Distributing Company can also take advantage of discounts through Electrovaya’s employee purchase plan where they can receive from $200 to $300 off the list price when they purchase products directly from Electrovaya for their own use.

Margin made on Tablet PCs is around or under 15 per cent, said Harrison. “”There aren’t significant margins to be made on a Tablet,”” she said.

While IDC Canada reported a slowdown in the Tablet PC market in the last quarter the sector grew considerably over last year, said Eddie Chan, an analyst at the industry research company. Since Q4 2002, when the Tablet was introduced, Tablet PCs have accounted for less than two per cent of total notebook PC shipments, according to IDC.

Although the adoption rate has been slow, Chan said the upcoming release of Service Pack 2 for Microsoft’s Windows XP Tablet PC Edition 2005 will bring significant improvements to its hand writing recognition capabilities and more integration with applications.

“”We’re seeing adoption of convertible form factor is outpacing slates,”” Chan said. “”It’s a migration path issue. Traditional notebooks, people are more attuned to that element.””

But the biggest barrier to Tablet PC adoption is the cost of ownership. “”It’s a price issue. There’s still a considerable premium over traditional notebooks,”” said Chan, noting that SMBs, who account for the majority of businesses in Canada, are price-sensitive about technology purchases.

New features of the SC 2100 include up to nine hours of battery runtime powered by Intel Centrino processor, 12.1-inch display, 802.11 g wireless capabilities, 3.5 lb., 80 GB hard drive, 1280 MB memory and 1.3 Ghz CPU speed.

List prices range from US $1,999to US $2,599 for base (slate), standard and premium models respecively.

Electrovaya, which launched its first Tablet PC in November 2002, recently reported its third quarter revenue increased from US$800,000 to US $1.6 million for the same period. The firm attributes the increase to its Scribbler Tablet PC sales and revenues from the National Aeronautics and Space Administration (NASA). Last year, Electrovaya was awarded a US $2.95 million contract to provide its Lithium Ion SuperPolymer battery to power astronauts’ space suits when they’re outside a spacecraft.

All but 10 per cent of that revenue came from the U.S. – something Harrison would like to change in the future.

“”We’re committed to the Canadian market,”” she said. “”I’d like to do more north of the border.””

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