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9/29/2006
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Whitebook Builders Profit From Notebook Battery Recall Fallout

With news of the latest recalls breaking last week, system builders and solutions providers say they've continued to see the sales of whitebooks buoy as problems mount.

Forget co-op dollars. Forget rebates. When it comes to whitebooks, FUD is the new MDF—thanks to the continuing fallout from the Sony bad-battery kerfuffle.

Lenovo last week became the latest PC maker to fall victim to explosive problems with defective Sony battery cells, as the Raleigh, N.C.-based PC maker announced it was recalling more than 500,000 notebook batteries with packs made by Sony.

Dell and Toshiba, which earlier had announced their own callbacks of Sony batteries, each expanded the number of units involved. Dell is now recalling 4.2 million laptop batteries, while Toshiba is exchanging 830,000.

With news of the latest recalls breaking last week, system builders and solution providers say they've continued to see sales of whitebooks buoyed as problems mounted at their tier-one competitors.

Already Dell and Apple have launched full-blown recalls because of bad Sony battery cells, and Toshiba has begun enacting a voluntary battery exchange because of quality control issues from Sony batteries in some of its laptops.

Tom McGovern, president of TWM Systems, a Hopedale, Mass.-based VAR and system builder, said that with the drumbeat of bad-battery headlines involving tier-one laptops, his budget to market his own whitebooks has stayed the same.

At zero.

"We're not going to market that as their weakness. We don't need to. They're doing it all by themselves," McGovern said. TWM Systems has seen a 15 percent increase in sales of its whitebooks and white-box PCs over the past couple months, and McGovern said he attributes a large part of that to customers' concerns about the battery recalls.

"The [recalls] are very visible to customers. They prefer something that is configured and serviced by somebody local," McGovern said. "We've also got a number of clients who don't want to deal with the battery issue at all. We've picked up business handling the battery returns [for them]."

Most end users may not understand that there are few battery manufacturers worldwide, he said.

They're more concerned that if they have an issue, "they have our ear, and it's comforting to them."

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