Hedging its bets
Commoditisation is the enemy of any company with a strong, recognised brand. When a product type becomes commoditised, that means people are basing their buying decisions almost entirely on price, which nullifies any brand equity and claimed added value any vendor offering products within that sector might claim.
It hasn't quite come to that with high-end memory yet, but it's close enough that Corsair, which traditionally does most of its business in that sector, has made the strategic decision to diversify its product offering as much it dares without diluting the strength of its brand.
HEXUS.channel spoke to sales VP Paul McGuire, who we last interviewed during Computex 2008, during his recent visit to the UK to find out more about the thinking behind this strategy, and whether it's proving successful.
"Over the years we've been primarily a memory-only company, mainly performance memory," said McGuire. "We moved into USB drives some time ago and we used to do SD cards, but we got out of that because it had become too commoditised.
"Fast forward a couple of years and power supplies were our first major shift out of memory into a product line that's doing very well for us. Power supplies provide very stable ASPs [average selling prices], especially compared to memory, so that's been a great diversification and we're very pleased with the revenue contribution it's bringing and the stability of the margins.
"So we're taking a brand that's well known in enthusiast memory and applying it, and our approach to product design, to new types of product. At CeBIT this year we announced our move into cases and, just as with power supplies, we've started with a leading-edge product and we'll back-fill the range later with a much broader line-up of cases that will be available for sub one hundred dollars to two hundred dollars and above.
"We're all talking about owning more of the box - the PC - and if you look at us getting into cases, power supplies, memory modules, cooling devices with the new H50 and USB drives, we continue to look at other products that give us that."
