Intel gets tough on gray resellers

Last week, Intel 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.

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 along 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)