Channelnomics

 

Tablets Bringing an End to Channel Stuffing

Share This Article:
Facebook Twitter Linkedin Email

In the tablet market, there’s the Apple iPad and then there’s everyone else. Plain and simple.

Even when a powerhouse like Hewlett-Packard enters the market, it faces huge headwinds to carve out even a modest market share. Should it come as any surprise that tech vendors are stuffing their channels to make their iPad rivals look more competitive?

Lenovo seems to think so. With the release of its new IdeaPad, Lenovo isn’t so much looking to challenge Apple directly. Instead, it’s trying to knock off its next closest rival – Samsung and its Tab tablet.

Until HP’s TouchPad went on clearance sale for $99, Samsung was arguably the second biggest tablet vendor in the world, with sales topping 1 million units worldwide. Lenovo is taking a run at the tablet market with its competitively priced IdeaPad. In drumming up interests for the IdeaPad, Lenovo is challenging Samsung’s sales figures, saying only 20,000 7-inch Tabs have been sold. The balance is sitting in warehouses.

Apple sells millions of iPads every month. Competitors, however, struggle to sell even a token volume of units. Motorola’s Xoom – a tablet running Android Honeycomb – has received good reviews, but has failed to capture any excitement and has only sold 400,000 units, by some accounts. Acer tells Channelnomics it’s sold 10,000 of its Windows 7 tablet. And HP had barely sold 25,000 TouchPads before pulling it off the market.

Now here’s the interesting thing about the TouchPad: HP’s decision to kill its tablet came just days after Best Buy, its biggest retail channel partner, went public with sales problems. Best Buy was fuming that it had sold relatively few TouchPads, but was sitting on more than 250,000. It was pressuring HP to take back the unsold inventory so it could reclaim sales floor and warehouse space.

In Europe and Australia, Apple is suing to block the sale of competitive Motorola and Samsung tablets. These cases may reveal that Apple is fighting a needless battle if the courts force the disclosure of sales figures that many expect to show Apple’s sales vastly outpacing those of rivals.

The final analysis may show that non-Apple tablet makers are stuffing their channels to inflate their shipment and sales figures. However, the HP experience and the Lenovo messaging campaign show a growing intolerance and vulnerability to channel stuffing. Channel partners won’t keep silent if they’re being forced to sit on unsellable inventory. And the lack of real sales could prove invaluable to vendors looking to discredit a competitor.

So another consequence of HP’s mercy killing of the TouchPad may be the lifting of the lid on channel stuffing. Vendors may no longer be able to rely on partners to be complicit in concealing weak product sales.

* * *

Lawrence M. Walsh is CEO and president of The 2112 Group, a technology business advisory service that specializes in optimizing indirect channels and partner relationships. He’s also the executive director of the Channel Vanguard Council. He is the former publisher of Channel Insider and editor of VARBusiness Magazine. You can reach him at lmwalsh@the2112group.com.

On Twitter:
Larry Walsh:@lmwalsh2112| Channelnomics: @channelnomics

Related Articles:

Leave a Reply

Spam protection by WP Captcha-Free