Without Built-In Features…Are Keyboards A Commodity?
Point of sale (POS) keyboard manufacturers have found ways to compete with the low-price PC keyboards," says Jackson Lum, president of Logic Controls, Inc. (New Hyde Park, NY). Logic Controls is a privately held manufacturer of point of sale (POS) peripherals, including keyboards, magnetic stripe readers, pole displays, and networking devices. The company has about 70 employees worldwide. "Many low-end POS systems compromise performance with low-cost keyboards," says Lum. "The popular PC keyboards have decreased in price to the point that they are now commodities. You can buy them at stores like Office Depot and CompUSA."
To combat this trend and increase keyboard margins for VARs, manufacturers are developing keyboards with many built-in features, such as advanced programmability, bar code readers, and magnetic stripe readers. "Adding functionality, like a built-in bar code reader, benefits VARs selling to end users," notes Lum. "Combining bar code readers, credit card readers, and keyboards into one unit eliminates excess cabling, improves performance, and lowers POS system costs. It also eliminates interface headaches for VARs. They don't have to worry about the compatibility problem of how to interface a bar code reader with a credit card reader."
Capitalize On Existing Customers By Selling New Keyboard Features
"VARs can capitalize on selling these newer keyboards to their established customer base," says Mike Harvey, keyboard marketing manager for Cherry Electrical Products (Waukegan, IL). Cherry, with more than 4,400 employees, manufactures keyboards with integrated devices. The company estimates gross sales of $500 million for 1999 and has 14 locations worldwide.
"Selling new keyboard features to an existing customer base is the lowest cost, lowest risk, and greatest return method for VARs to grow their businesses and increase profits," says Harvey. He cites several trends in the keyboard market, such as integrated pointing devices, integrated smart card readers/writers, biometric devices, reconfigurable keyboards, and USB (universal serial bus) interfaces, that will impact VARs.
According to Harvey, there are several vertical markets that are ripe for keyboards that incorporate card readers and biometrics. These markets are:
- Government – access control, Internet applications, and government aid programs
- Military – access control, healthcare and ID/authentication applications
- Education – library, healthcare, registration, access control (computer labs), and cafeteria applications
- Transportation – airlines and car rental businesses use smart cards, biometrics, and magnetic stripe readers for POS and loyalty programs, as well as access control and ticketing
- Hotels/resorts – loyalty, room access (keys), and in health clubs, restaurants, and gift shops
- Financial/banking – access control and ID/authentication applications
- Retail – POS, access control, ID/authentication, gift cards, loyalty programs
- Healthcare – access control, ID/authentication, and insurance applications.
Lum and Harvey offer VARs additional advice on profiting from keyboard sales. "Don't choose a keyboard because it is adequate and only meets the end users' basic needs," says Lum. "Look for a keyboard that is unique and adds extra value, such as a built-in bar code reader. Educate customers. Some can't imagine what the keyboard can do for their business."
"Sell unbundled services, such as support," advises Harvey. "Keyboards and keyboard applications are becoming more technical and require more VAR support."
Lisa Kerner