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Direct vendors to out-sell indirect channel

Resellers can expect a beating in the next two years

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The direct channel will outstrip the indirect channel in PC shipments by 2001, according to IDC. The analyst group forecast that worldwide sales would be bigger for direct sellers for the first time thanks to changes in distribution and business customers using internal technical staff. The report, part of the IDC's US PC Channel Review and Forecast, 1997-2003, said that direct channels had also been striding ahead with laptop sales. It noted that the success of direct sales, from companies such as Dell, was partly at the expense of the reseller channel. Although both were seeing shipments increasing, the indirect channel's growth rate was well below that of the overall market. Until 2003, shipments through the indirect channel would have a compound annual growth rate (CAGR) of 7 per cent, compared with 12 per cent for the overall market, it said. "The traditional value-added resellers that make up the commercial channel are being affected by a fundamental shift in the distribution mode," said Joseph Rigoli, analyst at IDC's emerging consumer and PC channels research programme. "End users are increasingly shifting procurement activity to those that are best at logistical efficiency - direct distributors - while often using in-house technical expertise basic for integration services." The report suggested that the biggest growth rate was likely to come from what it defined as the "other" channel, which IDSC defines as Internet or mail order sales that have no human interaction. This is expected to see shipments show a CAGR of 23 per cent by 2003. ®

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