NetComm releases profits, asks channel to commit

Networking vendor NetComm is midway through an extensive review of its channel, and is looking to continue working only with partners that make commitments to its product lines.

The ASX-listed manufacturer has released its financial results for the 12 months to June 30, which saw it scrape through to a $282,000 profit after taking into consideration a final write-off of the carrier business it closed last year.

Managing director David Stewart believes it to be an excellent result considering market conditions, pointing out that $560,000 was derived from continuing business units. However, the company did see a slight decline in revenues compared to previous years.

Stewart has a few tricks up his sleeve to boost these revenues, including a slew of new products outside of NetComm's traditional focus on modems, and a complete review of its channel strategy.

NetComm's core business is moving away from analog modems into switches, firewall and VPN routers, wireless networking equipment and DSL modems. "We believe next year's revenues will be much higher with the launch of several new technologies," Stewart said. "There are also existing products, such as DSL modems, where previously there wasn't much of a market. Now the DSL market is booming."

The vendor is also looking to shake up its distribution channel. It has already decided to appoint Ingram Micro alongside Tech Pacific as a national distributor, and has also ended its agreements with Sydney's Tecksel and Perth's J. Mills Distribution. Victoria's BBF Technology and Queensland's IT Wholesale remain on board at present.

Stewart said that with new product lines coming on board the company needs to be sure only those distributors with expertise in such technology are pushing the products in the market. "Your typical modem distributor doesn't necessarily fit the model," he said.

Similarly, the vendor only wishes to deal with large distributors that will provide them with a dedicated product manager, or smaller distributors that do not favour competing brands. "They have to be prepared to carry our full range, keep inventory in the shelves, and do promotional activities," he said.

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