Read much into Nokia s decision to go direct with part of its mobile phone distribution, earlier the sole domain of HCL Infosystems. Those clued-up to the workings of both companies would have you believe that this was expected, and so would many more in the future.
Only sales volumes are being affected here, and not profit growth or margins, which may also have been affected had Nokia opted for a competing distributor. Apparently, the move on the part of Nokia was forced due to representations made by some larger dealers who complained about services provided by the exclusive national distributor.
There are questions that require convincing answers. Will the channel, both IT and telecom, get a better pricing and services deal if they source products directly from Nokia? What formula are the companies working out for promotions and division of sales territories? Considering that the Finnish giant follows a multi-distributor strategy in other markets, will it not want to review its five-year-long brand-new tie-up and get another distribution house into the fold?
There are more HCL last week launched its own branded notebooks in spite of having the Toshiba distribution, and its TFT-LCDs in the market when it had a tie-up with Konica-Minolta. Though any questions on commitment and focus is bound to be dismissed with the argument that they are aimed at different segments, doubts will remain.
The deal only brought into limelight one of India s oldest and most enduring companies.
Among the many that has gone almost unnoticed, one Taiwan-based component vendor recently and quietly yanked the distribution off of a Bangalore-based company for commitment reasons. Not that the brand was not selling or wasn t popular, just that the vendor wasn t happy with the way it was being sold; obviously based on feedback it had received from the resellers themselves.
If partners did approach Nokia about lack of support from its distributor and it indeed was the true reason behind the new distribution deal, could we see more such instances? What would construe as the last straw for a channel partner to approach a vendor with a plea to do away completely with a distributor, and take care of the logistics themselves?
On the other hand, is a vendor justified in acting tough with its partners for want of adequate commitment on the part of the partner? There seem to be more questions than answers.
I leave with what one vendor executive with nearly two decades of channel experience told me: We source the products, set up the logistics, provide discounts, offer incentives, train them, pass on leads, and the partner still expects us to get the order, close the deal, create more demand and customers!
Take care.