6 In Focus
16th August 2011 Al Hosani Computer
Building on the lead
Editorial
A potential realignment So far, this year has brought little cheer to the market so far as far as growth goes across established product segments in the PC industry. Tablets have robbed the sheen from notebooks and netbooks with an impressive growth trajectory. The slow industry pace and flat growth rates challenges the visions that companies have held on to in the past few years. Companies are definitely looking at shifts in strategies as HP’s consideration of spinning of HP PSG reveals. Google’s buyout of Motorola’s Mobile phones business is also a dramatic shift for the software company to a hardware vendor, and ensuring that it would in due course compete head on with some of its biggest OEM clients in the Android segment. Potentially, the next few quarters could reveal some more dramatic plans of makeovers from manufacturers as boundaries between product categories continue to blur. This will be a response to testing times as margins continue to drop. Hopefully, most of them would be well thought out long terms visionary strategies and not reflect only the thinking of the current leadership to be later debunked, when a new team takes over. In the past few years ever since it heralded the iPhone and later the iPad, Apple has cornered an overwhelming part of the growth for the IT and smartphones industry combine in the consumer segment. In other words, while Apple extended its reach into the consumer segment, attracting first time buyers of its products, this growth came at the expense of established players in the IT as well as smartphones industry. The plight of Nokia which has seen its market share drop tells the story in the smartphones segment. In the PC industry, the failure of most vendors barring Samsung to bring out a competitive alternative to the Ipad is illustrative.
Ryad Santouh Managing Partner, Al Hosani Computer
Al Hosani computer is one of the leading distributers of Kaspersky as well as several other software brands. Ryad Santouh, Managing Partner at Al Hosani Computer LLC speaks in the following interview with VAR Magazine on how the distributor is consolidating despite market challenges
In addition to the economic slowdown, the innovative shift that Apple brought along seems to have caught most traditional PC hardware manufacturers off guard. They have been slow to respond and have seen the opportunity slip by to make an impact in new categories. Inevitably, the advantage in PC and Notebook markets would continue to shift towards manufacturers that can combine low cost manufacturing along with innovative offerings, leading towards realignment in the marketplace.
News Please discuss your recent recognition from Kaspersky? We got the best partner award from Kaspersky at the partner conference recently in Capetown in recognition of our sales achievements, and creative marketing of Kaspersky Lab products. We were also credited for promoting of Kaspersky Lab software to the key retailers in the GCC, including Carrefour ME, Sharaf ME, Jarir Bookstores, Plug-Ins, Geant ME, EMax ME, Jacky's, Jumbo, Dubai Duty Free, CompuMe and HyperPanda. What are the other brands you distribute? We are working with several leading software brands in the region. Our major focus is IT software. Besides Kaspersky, we have distribution rights for ABBYY, Sony, Magix, Adobe, Roxio, Nero among other software brands. We are a distributor for Sage as well in the retail segment. How has the year been so far in terms of sales? It has been challenging. We have progressed through the year. We have achieved good growth with Kaspersky which is today the top choice among buyers of AV security software and has growing appeal with consumers. They like the product as it is light and fast. The business is improving in countries like Iran, Pakistan, Afghanistan although maybe not to the extent we desire. Are you looking to expand in terms of new offices at other locations? We will be opening an office in DSO to be closer to our customers. We want to make it easier for them to interact with us. We
will retain our Sharjah office. There was a delay in opening the Qatar office because we were in the midst of a busy period. We will open in 2012. We have an office in Iran that serves Iran as well as Pakistan and Afghanistan. We continue to work in KSA through our partner’s office. KSA remains a large focus for us as it is the largest market in GCC territory. But several brands have had to deal with the issue of piracy there. In Egypt, we have faced small issues with customs as rules and regulations are not the same as in GCC. Would you be participating at GITEX this year? We are participating at the GITEX trade exhibition as well as at the GITEX Shopper. One of our activities last years was a campaign for Kaspersky buyers. Through a raffle draw, a UAE local won the prize which was a Mini-Cooper. We will look at some interesting activities this year as well. Discuss how you see volume of business changing across power retailer and the reseller channel? We do equal sales between the power retailer and the regular channel segment. The shift would depend on changes in the market but there should be growth in both segments. What challenges do you continue to see? The challenge is to keep promoting our brands and continue ensuring their success. We have increased our sales team, merchandising support, support team etc. We are careful with products we carry. There is a need to be more selective.
HP mulls PSG spin-off HP recently announced financial results for its third fiscal quarter ended July 31, 2011 and suggested the possible spin off of HP PSG. HP unveiled the details of a plan to accelerate the strategy introduced in March. The plan introduced is expected to move HP into higher value, higher margin growth categories, sharpen HP's focus on its strategic priorities of cloud, solutions and software with an emphasis on enterprise, commercial and government markets and increase investment in innovation to drive differentiation As part of the transformation, HP announced that its board of directors has authorized the exploration of strategic alternatives for the company's Personal Systems Group. HP will consider a broad range of options that may include, among others, a full or partial separation of PSG from HP through a spin-off or other transaction. HP will discontinue operations for webOS devices, specifically the TouchPad and webOS phones. The devices have not met internal milestones and financial targets. HP will continue to explore options to optimize the value of webOS software going forward. "We're focused on improving performance across the business," said Léo Apotheker, HP president and chief executive officer. "HP is taking bold, transformative steps to position the company as a leader in the evolving information economy. The plan will allow HP to drive creation of long-term shareholder value through a focus on fewer fronts, thereby improving its ability to execute, invest in innovation and drive a highermargin business mix." HP's Commercial businesses remain healthy with 5% revenue growth year over year. HP's Consumer businesses, within PSG and IPG, were collectively down 15% year over year. Personal Systems Group (PSG) revenue declined 3% year over year but PSG remains the PC market leader in terms of units, revenue and profit share. Commercial Client revenue grew 9% and Consumer Client revenue declined 17%.
Leo Apotheker President & CEO, HP