Renaissance has firm grip on Palm product

By ADAM GIFFORD

Renaissance Corporation will be sole distributors for Palm handheld computers in New Zealand.

It is the first new product to be added to the listed company's range since it moved away from supplying high-volume, low-margin IT products in favour of exclusive distribution of products it can add value to.

In February, Renaissance ended distribution contracts with Microsoft, Compaq, Hewlett-Packard and Toshiba, cutting $90 million of its revenue of just under $200 million.

While Tech Pacific loses its hold on Palm in New Zealand, it will still supply the model in Australia and elsewhere.

Palm Asia Pacific sales director Daren Ng refused to confirm or deny that Palm had entered a master distribution arrangement with Renaissance, saying he could not comment until the start of the company's new financial year on July 1.

But he welcomed Renaissance's increased emphasis on the product.

Ng's reluctance to discuss the deal is indicative of the hurdles Renaissance must overcome to convince multinational brands to bend their own rules and allow exclusive distributorships here.

Renaissance managing director Mal Thompson said New Zealand was not big enough for dual distribution to work on many products, because neither distributor could make a sufficient margin to invest in building up the market.

"If you don't want to set up a New Zealand office, you must appoint a master distributor, someone who has got responsibility and accountability for doing the branding and the development in a country," Thompson said.

As a model for what Renaissance could achieve, Thompson highlighted his company's relationship with Apple.

"My original agreement with Apple 18 years ago said 'independent marketing company'.

"The term distributor was never used. Distribution came about later to make sure we were getting the product to the marketplace."

Thompson said Renaissance planned to increase the number of retail stores carrying Palm products, with full demonstration kits, trained staff and promotions.

Renaissance would also encourage application developers to work for the Palm operating system, something that should boost corporate sales.

Thompson said Palm, which synchronised with PCs or Apple computers, should benefit from the increase in Apple sales, spurred by a rebuilt operating system, Mac OSX and new forms such as the "desk lamp" iMac.

"The two will grow together. We are currently tracking revenue of $110 million to $115 million," Thompson said.

"With some of the other exclusives we are looking at, in three years I can see us back to the $200 million level."