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Best Buy Halts Development Of Own-Brand Notebooks Under Pressure From Big Brands
from the and-so-it-goes dept
Over a year ago, we were one of the first sites to talk about Best Buy's plans to sell their own branded computers under the VPR Matrix label. At the time, I thought it was a terrible idea, that would involve them having to build their own brand while also competing with their own suppliers. On a first pass, I was completely wrong. The VPR Matrix machines have done incredibly well (though, amusingly, for a while if you Google searched VPR Matrix, it sent you to Techdirt - so the page linked above became a de facto message board about all things VPR Matrix). Building a brand wasn't so hard when (1) associated with Best Buy and (2) prices were noticeably cheaper than competing models. Now, however, the other shoe may be dropping. HP has put pressure on Best Buy to stop developing their own laptops, due to the success of their current VPR Matrix laptops - that compete with HP's for shelf-space within Best Buy. Of course, what's mildly amusing about all of this is that it wasn't so long ago that Compaq (now part of HP) was debating how to better compete with Dell by selling direct to consumers. The big problem they faced was that any such plans completely upset their channel partners... like Best Buy. So, now that the channel partners are competing themselves, shouldn't that open up an opportunity for computer manufacturers to start selling direct as well?
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Isn't this what everyone hates M$ for?
Isn't that what got Microsoft into so much hot water?
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Re: Isn't this what everyone hates M$ for?
Unfortunately for HP, they're between a rock and a hard place here -- if they put pricing pressure on Best Buy, Best Buy will just jack up the cost of the notebooks, further diluting HP's sales next to the Best Buy products and other brands of notebook like Toshiba which are sold at Best Buy.
If they remove the notebooks altogether, they lose a major sales channel. If they do nothing, they basically get screwed over by Best Buy -- because Best Buy is using HP marketing dollars to help fund its advertising in the Sunday circulars and so on as a provision of actually carrying the laptops and HP merchandise, I'm sure. Basically, HP is in a very real way paying to help Best Buy advertise competing products.
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