Brightpoint back on track, claims Wong

Mobile and wireless distributor Brightpoint is looking to the converged mobile/PDA market for growth, following flat sales last year and a botched ERP software implementation.

The distributor said it had recently completed the implementation of the JD Edwards ERP platform after the original install in 2001 went wrong, causing the distributor to lose business.

Felix Wong, general manager of Brightpoint Australia, said because the JD Edwards system wasn't performing, it was harder to provide the right stock availability at the right price for its reseller partners.

Wong said the company had problems with integrating the ERP platform with other systems. 'We spent the next six months cleaning it up,' he said. 'We worked with the vendors to get the bugs ironed out - it was hugely costly and we also lost business.'

Wong claimed the system was 'working like a charm now', adding that the company was continuing to spend a lot of money and development time on the platform.

'In 2002, we focused on consolidating the business and getting back to basics. 2002 was tough and flat -- we weren't in the red, but we didn't make a lot of money,' Wong said.

In 2001, the company was also faced with integrating former Sydney-based distributor Advanced Portable Technologies (APT) which it acquired earlier that year.

With the issues ironed out, the distributor is now hoping that PDA and combination PDA/phone sales would drive sales revenue growth over the next 12 months. PDA sales were flat, but Brightpoint is expecting good sales growth from existing and forthcoming converged PDA/phone devices, Wong said.

Brightpoint is moving around 1,500 PDA and PDA/phone combination devices in Australia each month, he said. 'That's small today, but it's where the growth will be.'

Wong claimed mobile phone sales were travelling well and made up around 85 percent of the company's sales revenue in Australia, with converged device sales making up the remaining 15 percent.

He said the company wants to grow the converged side of its business as 'quickly as possible'.

Wong predicts the market will take off when pricing issues and carrier technology become more reliable. 'It's like lining up the balls and today the balls have not been aligned -- but we're getting much closer,' he said.

The distributor will also unveil a bundle with Telstra next month, dubbed the Telstra Connection Pack. Wong claimed the offering would make it easier for resellers to connect mobiles and combination PDA/phones to Telstra's GPRS or CDMA 1x networks without the associated paperwork.

'The IT channel doesn't want to get bogged down filling out thousands of forms [so] this is designed for the IT channel,' he said.

Wong said globally the company had US$150 million in debt which has since been reduced to US$10 million following the divestment of some worldwide subsidiaries, Wong added.

Globally, NASDAQ-listed Brightpoint reported sales revenue of US$379 million for its second quarter ending 30 June, 2003, an increase of 25 percent from the same period last year. Income for the period was US$3.8 million, compared to a US$2.3 million loss in Q1.

The Asia-Pacific region was the strongest performer for the company, contributing US$203.3 million in revenues for Q2. Wong declined to reveal the proportion of sales revenue that was driven out of the Australian operation.

Meanwhile, the company this week launched www.brightpointonline.com.au, a Website that lets resellers check pricing details on stock. Next month, the distributor will roll out online ordering and by the fourth quarter, the site would have an order tracking facility, Wong said.