AST Plans a Giveaway to Repel Competitors
In a novel move to fend off fast-charging competitors, AST Research Inc., the rapidly growing computer accessory maker, said Tuesday that it will begin giving away one of the nation’s top-selling software programs to buyers of one of its most popular products.
“We’ll take a reduction in our profits to maintain our sales lead,” explained Tom Yuen, a co-founder and executive vice president of the Irvine-based company. “We have to work to fight off larger competitors that may enter the field.”
Yuen declined to estimate the potential value of the move or its impact on the 3-year-old company’s profits.
Under an agreement revealed Tuesday, AST will package its $395 “SixPakPlus” multifunction board, an accessory that increases the power and jobs performed by International Business Machine personal computers, with a general business software program published by Borland International, a Silicon Valley company.
Borland’s “Sidekick” program, normally retails for $84.95 and is currently the second best-selling personal computer business program in the nation, according to Softsel magazine’s software sales chart.
Although giveaways are common sales ploys for consumer items, both companies claimed the agreement represents the first time two established high-technology companies have combined their products for the hotly competitive market for IBM-compatible products. And analysts agreed.
“No one has done this before,” said Jan Lewis, a marketing analyst with InfoCorp in Cupertino. “Typically, software publishers go their own way and accessory companies go their own way. This is a great combination.”
Executives from both companies also dismissed any suggestion that the move is designed to shore up sagging sales at either company.
“It’s not because our software isn’t selling,” claimed Philippe Kahn, founder and president of the 2-year-old, privately held Borland. “These products are among the top-selling and it just makes sense to put them together.”
Yuen said AST should be able to absorb most of the additional cost of the software offer because of recent manufacturing cost reductions. But he acknowledged that the company’s profit margin on the “SixPackPlus” would drop as a result of the move.
