Elonex slump a not-so-familiar tale

ELONEX'S SLUMP into the arms of administrators is yet another instance of the dwindling fortunes of the UK PC industry but its tale is far more interesting than those of many erstwhile competitors.

The company was the nearest thing the country has produced to a PC manufacturer -- rather than assembler -- since Apricot and ICL, although it began like many other startups in the mid-1980s with a telephone, boxes of components and a room or two in the home of founder Israel Wetrin in which to plug the pieces together.

At the time, with PCs costing a couple of grand a pop, IBM could get away with charging perhaps 40 percent more than the clones, as they were known at the time. There was much talk of tier-one, tier-two and tier-three players that for quite a while allowed a Compaq to charge hundreds of pounds more than an AST.

That still left room at the bottom-end of the market for indigenous firms to set up shop and thrive. Many, like Elonex, Mesh, Dan and Viglen - the last of these later to be acquired by Amstrad -- were based around the north circular. Others, like Time and Dabs in Lancashire, Software Warehouse in Warwickshire, and Watford Electronics in, you guessed it, Watford, set up as mail-order resellers, selling vast amounts of computer-related kit.

The boom in direct-sales PCs saw these companies rocket, driven in part by a thriving magazine sector that would carry tens of pages of advertising by the bigger names who sold off the page by telephone. Catalogue-like publications such as Computer Shopper, PC Direct and Personal Computer World could touch 1,000 pages at their peaks in the early-1990s.

US companies like Dell, Gateway 2000 and CompuAdd had helped legitimise the direct model and it became fashionable to speak of PCs as commodity items. While IBM and Compaq snoozed, these companies ran riot, selling thousands of PCs per month each. In Europe, nowhere was the change more apparent than here in the UK where credit cards rule and mail-order purchasing is a part of our culture.

Elonex was the biggest and boldest of the UK firms. It had its own board assembly, smart pizza-box cases and ins with universities and government departments. It sold lots of Novell networks and even did a deal to run Steve Jobs' NextStep OS. As it grew, it also developed its brand, sponsoring Southend and Wimbledon football clubs and providing an on-screen logo for televised cricket. Most interesting of all it set up a Californian R&D facility and got hold of patents for power management, PDA designs and much else. The companies that have paid for intellectual property represent a 'who's who' of the PC industry.

At some point the IP protection business was spun off to a Luxembourg-based set of companies called InPro. A presentation on the web in a pdf here, suggests that Elonex/Inpro has pulled in over $100m from IP.

Although Elonex's PC business might well be strong enough to continue, it is unlikely to replay its halcyon days. The sad thing is that no UK company is likely to take its place. µ