Ingram Micro Will Distribute New IBM Line : * Computers: Deal is expected to be announced today. It could mean tens of millions of dollars for the company and boost recognition of wholesalers’ role in the industry.
Ingram Micro Inc., the nation’s largest distributor of computers and software, is expected to announce today that it will distribute a new line of personal computers made by International Business Machines Corp., according to industry sources.
Ending months of industry speculation, the deal could result in tens of millions of dollars in additional revenue for Ingram Micro and boost recognition of the increasingly important role of wholesale distributors in the way personal computers are sold, sources said.
Along with Gates/FA Distributing, a smaller distributor in Greenville, S.C., Ingram Micro will sell a line of IBM computers known as the PS/1 Pro. The machine is expected to hit the market in March. The PS/1 Pro will have a microprocessor, or main brain, with a speed of 20 megahertz, or slightly faster than a model introduced for home computer users about two years ago.
Santa Ana-based Ingram Micro and IBM officials declined to comment on the deal Tuesday, but an official with Gates/FA all but confirmed that an announcement would take place today. Jerry Lumpkin, a Gates/FA vice president, said his company welcomed IBM’s “endorsement” of his firm’s distribution strategy and said the company would announce more details today.
In the past, Armonk, N.Y.-based IBM and major PC manufacturers Apple Computer Inc. in Cupertino and Compaq Computer Corp. in Houston have sold their computers through networks of authorized dealers who had been trained to provide expert support.
The major companies avoided selling through distributors, which were viewed as middlemen that reduced the manufacturer’s control over the ultimate retailers who sold to the public and serviced the products. But now fewer customers need specialized technical support, and distributors offer a low-cost way for computer manufacturers to reach new markets, such as small vendors who order in such small quantities that they would be considered too expensive for a manufacturer to supply.
In addition, many of IBM’s competitors are now selling their computers through alternative retailers that have traditionally received their products from distributors, such as mass merchandisers, computer super-stores and small shops, known as value-added resellers, that sell the computers in packages with custom software. Using distributors could give IBM and other major computer makers more access to such markets, analysts said.
In recognition of such trends, Compaq announced last fall that it would sell its computers through distributors, but Ingram Micro lost out in a bid for the account against archrivals Tech Data Corp. in Clearwater, Fla., and Merisel Inc. in Torrance.
Ingram Micro, which distributes products for more than 600 vendors, formed a new division to sell major computer brands in August in an attempt to win new business. It signed a deal last fall to distribute sophisticated computers for engineers made by Hewlett-Packard Co. in Palo Alto.
“IBM’s announcement is a solid endorsement of our distribution strategy,” Philip D. Ellet, president of Gates/FA, said in a statement.
Ingram Micro, a subsidiary of Nashville, Tenn.-based Ingram Industries, is the computer industry’s largest distributor with $2 billion in sales last year.
