Intel takes stock of currency issue

At the end of last year, Intel offered to take back surplus inventory from its channel partners because of the effects of fluctuating currency and surplus stock on its partners' cashflow.

We took back a whole lot of inventory, trust me on that

Intel's Kamil Hassan

"We went back and said, any old inventory that you have — give it back," Intel APAC channel chief director Kamil Hassan said yesterday at Intel's annual partner conference at the Gold Coast.

Fluctuation in currency such as the Australian dollar meant that channel partners who had taken on stock often no longer knew whether they would be making a profit on future transactions, he said. It also meant that money was tied up in stock that couldn't be moved, creating the temptation to heavily discount to move stock and free up cashflows.

"We took back a whole lot of inventory, trust me on that," Hassan said.

The offer had been open to many countries including Australia, Hassan said. When Intel took the inventory back, they could shift it to other markets where different items might be selling better, he said.

Intel had also put in other measures to try and keep their channel partners' in good cash shape such as paying upfront bonuses for selling equipment.

There had been a distinct drop in demand during December according to a later presentation by Steve Dallman, VP and general manager of Intel's reseller channel organisation within the Intel sales and marketing group, although his data suggested that the fall in demand had since stabilised.

Intel said at its Q1 earnings call that much of the overhang had been burned off in the first quarter.