iQon Technologies

» see iqon.ie as it lived, on the wayback machine

~ the obituary ~

iQon Technologies built personal computers and laptops in Dundalk, County Louth, and sold them through British and Irish retailers. Dermot McElroy founded it in 1994 as ROMAK Computers, alongside Lars Krull and Patrick Rooney. In 1997 it was sold to CHS Electronics, an American distributor then buying up European channel businesses at speed. CHS collapsed in 2000 and McElroy bought his own company back from the liquidators, which is a rarer move than it sounds and says something about how much he wanted it.

The deal that set up its last four years came in 2004, when iQon won a contract worth around twenty million euro to supply computers for Tesco to sell in Britain and Ireland. The company expanded its manufacturing on the back of the Tesco Computers for Schools scheme. In 2006 it opened iQon France in Toulon and signed a ten million euro French export arrangement. By 2007 it was Ireland's largest indigenous PC maker and its largest PC exporter, and IDC had it in the top ten PC vendors in the country.

Being a volume supplier to Tesco and Littlewoods is a position with no floor under it. Supermarket computers compete on the shelf price and nothing else, and in 2007 Dell turned its own guns on the retail channel after two decades of selling direct. iQon's margins went where margins go. The company petitioned the High Court for examinership in November 2007 with liabilities above seven million euro and 108 people on the payroll, and Michael McAteer of Foster McAteer was appointed examiner.

I spent the early 2000s on Turkish hardware forums with a signature block listing my components, and iQon was built for the customer who would never do that. A supermarket PC gets bought by somebody who does not want to know what is inside it, which is a legitimate market and a far larger one than mine. It is also a market where your real buyer is a retail chain rather than a person, and a retail chain can change supplier inside a quarter.

~ the case file ~

~ the tesco years ~

The Irish trade press covered iQon the way it covers any indigenous manufacturer that gets big: as proof that the thing could be done at all. A Dundalk factory shipping badged desktops into British supermarkets was a genuine achievement in a decade when the European PC industry was being hollowed out by Asian contract manufacturers working for Dell and HP. The Sunday Business Post was still writing about the fall-off in turnover on 21 October 2007, a few weeks before the examinership.

What the coverage could not fix was the arithmetic. Deficits ran for two financial years against a business that had been profitable, and the trade press put the ongoing deficit at around two million euro, which is a separate figure from the seven million in total liabilities the court was told about. A company assembling hardware for a grocer has no pricing power, and no brand loyalty waiting for it when the loss-making quarters arrive.

~ the eleventh hour ~

The examinership ran roughly two months and came close to working. The rescue plan involved a French investor, and the managing director Ciaran O'Donoghue said afterward that the company believed it had enough support lined up to resume trading at about 75 percent of its previous size. Then one of the potential investors changed his mind. On 23 January 2008 Mr Justice Peter Kelly appointed McAteer as liquidator, the examiner having failed to produce a viable salvage plan, and 109 jobs went that day. O'Donoghue described telling the staff they were unemployed: "It was a magnificent group of people and they were crushed."

The call center and the warranty service kept running under the liquidator while the business was offered for sale, because somebody still has to answer the phone when a machine under warranty fails. Nobody bought it. The Irish Examiner ran the story the following morning under the headline "109 jobs lost at computer company", which is how the largest Irish-owned computer manufacturer in the country got described on the day after it stopped.

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