Company will assess need for price adjustments in 2019 to maintain quality of products and services.
ALE, operating under the Alcatel-Lucent Enterprise brand, today announced that the Company will not raise prices on enterprise networking products and services before 2019, regardless of the significant cost implications brought on by the ongoing trade war between the U.S. and China.
“Whether it is shifts in the market, the introduction of new technologies or broader economic factors like tariffs on U.S. imports, ALE puts a premium on the needs of our partners and we base decisions on how best to navigate change together,” said Stephan Robineau, Executive Vice President for the ALE Network Business Division.
After an unsuccessful plea by some of the world’s largest IT hardware vendors to remove certain categories of products from being included in this latest round of tariffs, the U.S. imposed a new import tax on a long list of goods made in China, including some networking components built into ALE products. If there is no acceptable resolution to the ongoing trade dispute with China, the administration has indicated plans to increase the current 10 percent tariff to 25 percent in January 2019.
To offset the inevitable earnings impact, many vendors have chosen to pass the cost through to channel partners and customers by immediately increasing prices. ALE will absorb the current 10 percent increase and give partners the opportunity to place orders before a potential need to adjust pricing in the new year.
“Unfortunately, in a situation like this, the additional cost must be absorbed somewhere along the supply chain,” continued Robineau. “Most of our U.S. customers locked in 2018 budgets long ago and are already in planning cycles for next year. We recognize an unexpected price increase could aggravate a budgeting process that is often already complex for business leaders.”
ALE has stated that any price increase in 2019 will be communicated at least three months in advance, to allow partners and customers time to prepare. The Company will continue to monitor the very fluid international trade situation and is committed to being as transparent as possible with valued business partners.
“ALE has been in business for 100 years, helping the markets we serve move from one generation of technology to the next, on their schedule,” said Kevin Coppins, Senior Vice president of North American Sales for ALE. “Customers and partners have come to expect us to help guide them through these kinds of macroeconomic market shifts as well. We serve as the buffer, giving them time to react and adapt. It’s core to who we are, and who we always will be.”
For more information about network products and services from ALE, visit https://www.al-enterprise.com/en/products/network or contact the Company.