MicronPC looks to niche markets for profits

MicronPC wants to be a big little player in the PC business. The former Micron Electronics unit, which announced last week a layoff of 250 workers, is now working to streamline itself and zero in on more profitable niches in the PC market.

MicronPC wants to be a big little player in the PC business. The former Micron Electronics unit, which announced last week a layoff of 250 workers as it completes its acquisition by Gores Technology Group, is now working to streamline itself and zero in on more profitable niches in the PC market.

The company will focus its sales efforts on government and small and medium-sized businesses, scaling back its retail presence, said Mike Adkins, president of MicronPC. Adkins had been president of the PC business at Micron Electronics.

"Our (new) model is not about trying to be the biggest," Adkins said. Instead, "we believe that we can successfully carve out niches" in which the company can be successful.

Nampa, Idaho-based Micron Electronics announced in late March that it would exit the PC business and merge with Web hosting company Interland in a US$130 million stock deal. British holding company Gores, which specializes in revamping and then selling struggling technology companies, acquired Micron's PC unit.

To that end, Adkins said MicronPC has streamlined its operations via job cuts and thinning out its product line. It is also re-evaluating its retail efforts and relationships with suppliers.

"In the past, we had been trying to be everything to everybody," Adkins said. "That created a lot of redundancy. We've essentially eliminated all that redundancy."

The niche strategy could be a profitable one, an analyst said.

"There are niches available" in the PC market, IDC analyst Roger Kay said. "I think that, in fact, might be the best solution for a lot of (PC) companies."

MicronPC, which now has 1,050 employees, will focus on the "segments and in the markets where we have past and proven successes", Adkins said.

Government sales will be MicronPC's crown jewel. The company expects sales in that sector to make up about 60 percent of its business, he said.

"We will leverage success we've had within the government sector, specifically the federal space, by expanding into state, local and education markets," Adkins said.

MicronPC also plans to continue to sell to small and medium-sized businesses and will maintain a smaller presence at retail.

The company plans to adopt a kiosk strategy, allowing consumers to order PCs directly from it instead of stocking products on retailers' shelves.

"We are still very much interested in retail," Adkins said--but without the inventory problems posed by stocking store shelves. "Building ahead of time, the material starts devaluing the day it leaves the dock."

MicronPC is also exploring contract manufacturing for other companies to help bolster its bottom line and keep its plants busy.

One Micron insider said there has been talk inside the company of manufacturing devices as diverse as cell phones or VCRs.

Adkins said the company is exploring such possibilities.