Intel gets tough on gray resellers; strips GID status

Intel recently sent a clear signal to the local IT market that it would take

stern action against resellers dealing with gray products, by removing four

resellers from its Genuine Intel Dealers (GID) list. Arch Computer Gallery, RM

Computers, S3 Computers and Vajawat Computers are the four resellers who had

been disassociated by Intel in business for dealing with gray products.

According to a close source to the company, "Intel has always been very

strict with such practices and in fact, the resellers have been warned of stern

action. However, they continued to do so and Intel was pushed to take this

extreme step." Intel’s legal team carried out this exercise by

masquerading as buyers.

Meanwhile, Intel raided office premises of two resellers in Lamington Road in

Mumbai on December 26, under the charge of dealing in repackaged processors. The

Mumbai Police aided Intel in conducting the raids. According to market sources,

offices of KK Electronics, Mahadeo Infotech and Rays Datamation were raided.

According

to market sources, Intel is expected to carry out similar exercises across

India, mainly in Mumbai and Delhi where more resellers are believed to be

dealing with gray products. Meanwhile, the local IT market in Chennai would see

one more round of action to ensure the gray products are not being sold by GIDs.

However, a GID who is also a leading reseller in the market says, "Intel

is playing the game and the present move is just to create an impression that

the company is very strict with gray product dealers. In fact, many resellers

who are also GIDs had been dealing with gray products for quite a long time and

Intel was blind towards it all these days. Now, the really `Genuine’ Intel

dealers are completely dissatisfied with Intel and to placate them, Intel had to

take some action."

"Intel always believes in fair business practices and this is just an

allegation. In fact, Intel’s legal team is regularly involved in such

exercises. However, there should be a cautious approach when dealing with

critical issues like this," according to the source close to the company.

The last time Intel’s legal team carried out such exercise was over a year ago

in Chennai.

"Almost every GID in the market deals with gray products and if Intel

has to take action it has to remove everyone from its GID list. However, we have

no comments on the Intel’s decision and it hardly affects our business

anyway," says Prashant Tyagi, Director, Arch Computer Gallery.

"Intel is afraid of competition and today, almost everyone is dealing

with grey products and Intel has to take action against everyone. I really do

not know why we are being targeted particularly," says one of the affected

GIDs.

It is believed that the average gray market percentage is between five and

eight percent anytime. However, in the last four months the gray products

percentage has increased and touched up to 15 percent, which has prompted Intel

to take serious action against those who are dealing with it. "Intel can

take action only against its GIDs who are dealing with gray products.

However, the government should play a major role in curbing this menace. If

the port authorities are strict with unauthorized importers, how would the

market get such products," questions the source.

GOPI KRISHANA



(CNS)