Markham, Ont. – Supercom president Frank Luk called his company’s partnership with Rogers a “blue ocean” of opportunity for the channel.
Supercom has agreed to distribute Rogers’ Internet Rocket Stick, released late last year, in a phased-in approach that will eventually see the distributor sell more 4G embedded netbooks and notebooks.
According to Nick Cunliffe, vice-president of distribution for Rogers, the Rocket Stick is a mobile broadband access device which gives users the same access to e-mail and Web connections they have in their office or home.
“The Rocket Stick’s terminology shouldn’t be too technical and should be put into context the customer will understand, such as its fast and easy access to e-mail and Web connections from anywhere,” he said.
Cunliffe said the Rocket Stick through Supercom will be success for people that want more than what their handheld gives them today, or don’t want to look for hot spots. At $30 a month it pays for itself after two hotel night stays, he added.
This partnership was started inside an airplane when Luk sat next to Jim Detler, the vice-president and GM for Rogers.
Luk said wireless technology is now better than the conventional telephone system. “It can’t compete and data transfer is even more meaningful today,” he said.
Luk added that smart phones such as IPhone and the Blackberry are limited because of their size, speed and memory size compared to a netbook or notebook. IDC recently reported that there will be 160,000 netbooks with 3G embedded next year. “What we are seeing is our future and this is a blue ocean for us instead of a red ocean where we cut each other’s throats. Now we can make more money,” Luk said.
The basic margin on the Rogers Rocket Stick is going to be $60, but it can be higher through special promotions.
Supercom nets-out a service fee from Rogers, but more important to Luk is that together they are establishing a new sales channel for netbooks and notebooks.
“This is just like a phone. A different type of phone with 3G and 4G is the next phase launching at the end of July,” Luk said.
Luk anticipates that 100,000 net new netbook or notebooks with embedded 3G or higher will come through Supercom.
The margin model for embedded netbooks or notebooks will be more profitable for resellers, Luk said. For example, a reseller can obtain a netbook from Supercom for $400 that comes with a $200 subsidy from Rogers. That reseller can offer the netbook for $300 and make $100 from the exchange.
Today, resellers make $40 to $50 off netbooks. “You can sell the netbook at cost, do nothing and make $60 from zero. This is great news for resellers,” Luk said.
Luk also believes this Rogers deal will be a blessing for the system builder channel. He said currently the economy is hitting this community very hard. According to IDC Canada, the white box market is in rapid decline, down 35.6 per cent in the first quarter from the number of units shipped in the fourth quarter.
Through the Supercom/Rogers partnership they will have a new revenue stream similar to cell phones today, Luk said.
Rogers will support Supercom’s effort with in-store displays and other marketing collateral. The key to getting the commission is for the reseller to sign a customer up for a two year plan, where then the Rocket Stick will be offered for free. A one year plan will cost the customer $25 for the Rocket Stick, which has a price of just under $200.