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A white knight for white books?

Intel is again trying to encourage VARs to get into the white book market. But one system builder is doubtful

With the Alberta economy roaring at breakneck speed, you’d expect system builders there to be doing well. G.C. Computers, with stores in Edmonton and Calgary and annual sales of $10 million, seems to be one of them.

Yet with consumers and businesses increasingly buying laptop computers, the company is barely taking advantage by building white books for customers. President Wing Ho reports he sells about $70,000 worth of custom-made notebooks a month, a not inconsiderable sum, but only 10 per cent of the white boxes that go out the door.

His experience should act as a check against the enthusiasm of Intel, which last month announced the Canadian debut of its initiative to encourage system builders to increase – if not initiate – their white book efforts. Called Verified By Intel, the chipmaker is determined to bring major chassis, hard drive and other component vendors together to offer building blocks that system builders and customers can rely on. (See page 6 for details).

But Ho doesn’t believe the new program will help him increase white book sales.

“The notebook market is still dominated by brand name (manufacturers),” he said. “If you’re going to do white books, in my experience you need to provide a lot of extra service. You cannot just compete on price, because on the entry level there’s no way you can compete with the big guys.

“Even with the (VBI) Intel white book program the warranty is still not as great as the brand name guys – they’re good across Canada, sometimes across North America or there’s an international warranty.”

While Intel has put together packages that can be offered with two-year warranties, Ho noted that resellers of OEM laptops can promise service in almost any city in the country. Resellers can offer faster local service, he said, but that may not be enough for many buyers.

His company, which opened its doors in 1992, started building white books five years ago under Compal Electronics’s Bizcom program. But he also carries laptops from Hewlett-Packard and Acer.

As I write this retailers are advertising back-to-school sales with laptop prices lower than I’ve ever seen. Future Shop is offering a Celeron-powered Toshiba A100 notebook (with a mere 512K memory), WordPerfect Office and an unspecified HP printer for $599 after rebates. The Source has the same laptop with a Brother laser printer (seen on sale for $79) for $699.

At these prices, no sane system builder will go after the bottom end of the market. To succeed they’ll have to offer white books with more memory, faster processors and larger hard drives.

“Intel is improving,” said Ho, “but they still need to improve in a few areas before they can make white books a success.”

“For ourselves,” he said of the VBI program, “it won’t make any difference.”