Hyundai enters PC market, confronts fraud

Korean giant Hyundai is teaming up with consumables and office products distributor Daisytek to launch a range of PCs in Australia during August.

Unconcerned by the already crowded marketplace, Hyundai is aiming "to buy market share by offering high gross profit" to channel partners, according to Aron Jackson, CEO of Hyundai MultiCAV Australia.

Jackson said the vendor will service "the major retailers" directly while corporate markets, independent retailers and office products retailers will be targeted through Daisytek.

"We are just finalising our distribution arrangements and will be kicking off with a roadshow in August," Jackson said. "Daisytek will be handling logistics and will offer about 20 different products.

"We will have everything from entry-level Celeron 1.3 home PCs right up to high-spec P4 desktops and notebooks for gamers and business executives. We are looking for a 5 per cent market share by the end of the first 12 months."

Major retailers that will be selling Hyundai MultiCAV PCs include Coles Myer and the National Australian Retailer Trading Association, which harbours 27 tier-two retailers such as Bing Lee, Radio Rentals and Clive Peeters. Negotiations are continuing with Harvey Norman, Jackson said.

Jackson said he is deploying a "100 per cent channel strategy" and is expecting to mainly take market share away from global brand name PCs as well as some local assemblers.

"It's a market to be taken at the moment," he said. "There have been some holes left in the marketplace from the departure of Gateway and with IBM and Acer upsetting their channels. There is also opportunity from the merging of HP and Compaq with a lot of people looking to stock only one of those brands.

"But some of it will be coming from white boxes as we will be offering mass market pricing. Hyundai is a mass market company and pricing will be very competitive. I think local assemblers have plugged some of [the gaps in the market]. The Hyundai brand will take some of it back."

Jackson said recommended retail prices for the Hyundai range will start at $1,499, while the top-end notebook will start at $4,999. He is expecting about 70 per cent of sales to be desktops and 30 per cent notebooks.

An assembly centre is being ramped up in Adelaide with approximately 20 people to be employed to build the systems, since "assembling locally gives us a faster speed to market".

A large TV and print media marketing campaign will be complemented by cross-promotional activities with other Hyundai companies such as Hyundai Motors and some soft dollars for retailers.

Buyers of Hyundai PCs will be given a two-year back-to-base warranty with retailers given the option to sell an upgrade to a three-year onsite warranty. For home consumers there will also be a free one-hour setup and training consultation.

While the Hyundai PC brand is new to Australia, the company has been OEM manufacturing PCs and components for companies such as IBM, Sharp, Sony and Philips since 1984. It has been selling Hyundai-branded PCs since 1997 with notable success in the European Union, as well as a 30 per cent market share after just one year in its native Korea.

Those resellers that have seen the Hyundai brand in the Australian market have actually been seeing a counterfeit product that the vendor is looking to stamp out. To read more about the counterfeit PCs, see this week's issue of ARN (June 26).

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