Are there product categories where you would like to strengthen your product kitty?
There will always be room to add strategic products that will be beneficial for both parties. We are very cautious and selective about adding new products because for us it is not about adding a new brand to our list but it is about doing justice to the brand. We need to sell the right volume and focus on adding value to the market.
Moreover, we are interested to grow business with the existing brands as we believe there is plenty of room for growth. We are confident that the current path we are taking is the right one as shown by the growth that we are experiencing.
Which among your distribution businesses, in terms of product categories are the fastest growing in revenue?
All security products, networking Products, most Notebooks & PC's are growing the fastest. In components especially, the add-on graphics cards and HDDs are showing a fair growth.
You have a wide networking portfolio with brands such as 3Com, US Robotics, DLink and HP Procurve. Can you elaborate on how you have made headway in the networking business?
Our concept of Value Added Distribution is the main reason behind the success we have seen with the distribution of networking products. We do more than quoting, invoicing and delivering the box; we are involved day one as consultant and we help planning and designing a solution on top of the regular distribution practices. We have the right structure and expertise that can help resellers in making their business easy and smooth.
Please elaborate on the services business from Aptec?
Aptec does pre sales activities such as project design, project management, system layouts and post sales activities such as technical support with toll-free numbers, Annual Maintenance Contracts (AMCs) & incident based trouble shooting on a wide range of Internet Security solutions thereby helping the vendors to reach out to the market with an efficient first level support infrastructure with a local flavor, working to the Middle East work weeks & timings.
With Nokia, you seem to be a key distributor to the retail sector. With many IT products now coming into the retail fold, how do you see your role's significance as distributor to the retail segment increasing?
Aptec is launching a new Retail Concept throughout its Mobile retail outlets, where consumers can enjoy total offering of services combining Mobile hand sets, IT (Software and Hardware related to Mobile Business), Music, Imaging and others. Mobile hand sets are no longer just a tool to communicate through voice and SMS, and we are ready to introduce the new evolution to consumers.
Please elaborate on expansions plan for your distribution activities in the region in terms of infrastructure?
Aptec is growing it's sales team in Gulf, Saudi and Egypt as well as growing it's operation in Kuwait. We are moving to a bigger space and adding more staff so that all sales to Kuwait is done through the on ground sales team. This should play a key role in building Aptec's reach to different reseller segments. We are improving our back office services making it easier and convenient.
Do you think Broadline regional distributors are at any disadvantage in comparison to local in country distributors?
Local presence is definitely a key factor that can add value to distribution business offering all kinds of local services, still the power of purchasing in big volumes, consolidation, professional logistics services, multi product offerings, marketing and other business aspects are as important as the local presence. It's not a question of one or the other, but having the right symbiosis. We believe Aptec's current set up is answering both, local expertise and regional economy of scale.
Do you see a consolidation happening in the distribution business in the Middle East market?
If you talk in terms of mergers and acquisitions, I don't think so. Regional distributors like us will continue to be strong performers because we have the financial strength to make new investments and also do large volumes. We have the advantage against local distributors. We are also expanding our regional presence through offices in markets like Saudi Arabia. We have recently invested in a call centre in Saudi Arabia to service local customers. We have stepped up our presence in other markets.
In the components business, the margins have been consistently receding. How do you as a distributor skirt these issues to sustain growth?
The margins are reducing not just in components but for all IT products. Today margins for Notebooks are below the margins possible on some components. Hence, reducing margin is a overall day to day challenge for distributors, which we as Aptec manage by selling products with high specifications and constant realignment of our offerings and services.
What kind of programs do you do for your channel?
We have new promotions and special offerings every week. On top of that we run quarterly promotions for our products, where our resellers have a change to qualify for high quality rewards. Recently, we ran a D-Link and Fujitsu Siemens Promotion where our top performing reseller drove away with a brand new Hyundai and Peugeot 206 car. Other rewards such as LCD's, Plasma's, Mobile Phones, Gift and Travel Vouchers has been distributed, too.
Aptec recently tied up with Avaya for the SME segment. Do you see a great demand in the migration from traditional PBX to IPBX?
In general, in the SME segment( Avaya calls it SMBS-IP office System) , we would call it reasonable demand for green field opportunities as well as migrational needs. Following our partnership with Avaya, our main focus was to create value reseller chain, which is very important to ensure "Right Positioning & Solution Packaging" for SMBS customer needs either for new or migration requirements. Since , we believe this would help create critical demand momentum which would be self sustaining and also help to create new opportunities in the market.
Avaya IP office has a fully scalable architecture supporting hybrid system environment, by which Analogue, Digital & IP end terminals can co-exist. Additionally, Avaya system supports open architecture for Data networks & also can be interconnected with Traditional systems thru Standard interfaces like QSIG. This offers enormous value to SMBS customers to protect their current traditional PBX systems & terminals investment at the same time have an IP enabled architecture , which can be scaled up at their own pace of growth and business need.
Do you see IP telephony gaining momentum in small business markets?
Yes, it would take a slower pace to start with , till the critical mass is reached primarily because the VOIP sector is regulated & therefore the value benefit normally looked at by SME organizations being not there. But we see a stable growing need for IP telephony from SME segment especially for IP systems delivering Business applications capability & importantly from organizations with multiple locations requiring Integrated Platform.
