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How Much Are You Paying For A Nameplate?
Matey-O writes: "I realize most of you built your systems youself (with mad overclocking style) but if you've purchased a fully built system receintly from Compaq, Dell, HP or Apple, you may have a computer built by Quanta, a very quiet, very successful Taiwanese manufacturing company. NY times article here." (This is true at least of notebooks.)
With a major brand name, you're paying for marketing and advertising, as well as the product. If a brand name is good enough to gain a reputation by word-of-mouth alone, it's likely to be true, as negative criticism spreads twice as fat as positive.
Now, if they only made desktops...
If I weren't nailed to the penis, I'd be pushing up the daisies!
When Dell first started using Quanta (they also used Compal MoBo's) in laptops in 1998, they got to specify the quality and construction of the product. You might find the same boards in a Time PC or a Tiny PC, but I guarantee that the Dell's will have a better mean time between failures (MBF).
This had some interesting side-effects. It also meant that some strange side-effects occurred. For instance in mid-1999, you had HP and Dell machines with interchangeable components as they were both based on Quanta decks. This actiually proved useful.
So and OEM behind laptops? Bring 'em on! All we need is for them to sell components to the public and self-built laptops aren't that far away.
When I have a problem with a Dell box, I get a replacement the same day (or next, depending on how much cash flow we had when we purchased it) without excuses or hoofing it over to a local vendor. Could I save some money by hooking up with an importer who brought the same laptops over sans nameplate? Sure, but as many import shops as I've seen go under in the last few years, I'd be a complete idiot.
What's your damage, Heather?
Nope!
While the first statement seems very sound and realistic the last seams a little short-sighted.
The "killer app" to convert desktop users to notebook users after the plateau is not software. It is the "Internet anyware", wireless, portable, comunications terminal that is a laptop. PDA's are convenient and do their job, ie. quick basic computing on the go. People want portability and that is the notebooks "killer app".
The implications for the US are interesting. The removal of manufascturing jobs from the US means there are less decent paying jobs in the US, tightening the Job Market.
You've got it backwards. Manufacturing is a commodity industry, assembly line workers are paid hourly and count as semi-skilled at best. The real jobs - rewarding for an individual and value-adding for a company and a nation - are in designing the goods to be manufactured in the first place, and selling them along with services and support.
If anything, the quicker countries like the UK and US can wind down manufacturing of commodity items, the better for their economies it will be.
This is part of a much bigger picture, which includes the HB-1 visas, etc. All of which does not bode well for American technology workers in the long term.
Manufacturing, even of high-tech goods, is not what technology workers do. There is no way an American assembly plant can compete with an offshore one, where the cost of doing business is always going to be lower (in US dollar terms). But it's difficult for an offshore company to compete with the US in value-adding services (such as what Dell offers) because Dell understand the "hearts and minds" of the consumer. All the manufacturing savvy in the world doesn't amount to a hill of beans unless you know what to manufacture.
It is the old internationalist'globalist argument vs the progressives. Globalism has its place is a peaceful world. Even then, the damage to your own local economy can be cruel. Look at any city where there to to be small time manufacturing. New York, for example. No manufacturing = less jobs. Or maybe the job is less than equal to what was there before. A generation or two can go to waste.
This is the whole thing of switching from manufacturing to service industry. Would you trade your job for flipping burgers at Burger King?
On the tech side, I recently had an argument with someone who insisted that because of the HB-1 program, tech jobs for americans were going to foreign nationals, making tech jobs for americans impossible to find, regardless of the recession. He cited one company where most of the local management was non-US, bypassing qualified local people.
Bottom line: things are not right around here.
"It is a greater offense to steal men's labor, than their clothes"
You've got it backwards. Manufacturing is a commodity industry, assembly line workers are paid hourly and
count as semi-skilled at best. The real jobs - rewarding for an individual and value-adding for a company and
a nation - are in designing the goods to be manufactured in the first place, and selling them along with
services and support.
Stop for a moment and think about the people in the US who are hourly semi-skilled people on manufacturing lines who lack the desire, ability, or education to become "designers" or other more "skilled" jobs. Tell them that it doesn't matter when they go on the unemployment line, and onto welfare, when their jobs get moved to a manufacturing facility in Mexico.
Honda built a manufacturing plant in Marysville, OH. Probably because it was the most cost-efficient thing to do over having the job done in Japan, Mexico, or Korea. Dell built a plant outside Nashville, TN. Same reason as Honda.
The simple fact is, jobs matter. Whether they are unskilled, semi-skilled, or highly skilled. Don't discount even the "lowest" of jobs, because that job probably means a lot to the people who work it.
I have no idea why people are talking about brand names and clones here...
What the company is doing in Taiwan is building computers not designing it. The same thing happens in the car industry already. Magna Corporation (one of the largest car suppliers) supplies parts for ALL of the car manufacturers. However, nobody in the car industry says that a FORD car is driving GM parts.
So the comparison of clones produced by the Taiwanese is not the same as building computers for Dell, Compaq etc.
And if you think that the Taiwanese are learning from Dell and Compaq to put into their own brands, forget it. It is much more lucractive for the Taiwanese to build the computers than to "borrow" and clone.
The same occurs in the car industry. Magna basically makes every part of the car. And they could in theory build their own car. But they do not. It is much more lucrative to build the parts.
"You can't make a race horse of a pig"
"No," said Samuel, "but you can make very fast pig"
- Documention: Y'know, the dead-tree or online specs that in some cases read as if they were Babelfished from their native tongue and others with beautify lucid, illustrated, and well organized troves of data.
- Support: Who ya gonna call? Even if this is outsourced there's still some sort of coherent product issue / resolution process going on. Websites, call centers, tech notes, latest qualified drivers, etc. If the product is pooched better vendors will simply swap out the problem item.
- Brand Value: Braun doesn't make their own small electronics but folks buy the Braun name. Why? Because through whatever combination of Marketing / Quality Control programs consumers associate Braun products with good devices.
- R & D: They're not called Wintel without a reason. If the motherboard isn't made by Intel, or designed by Intel, or based on an Intel design then you've a rare beast. Even then the components are all about the same - this year's popular chips, or last years, or their knock-offs, all making PCs remarkably homogenous. Canon engines are in HP laser printers which sell far better then their Canon counterparts. Why? Large manufacturers do invest in making their variation somehow slightly "better" even if that only means supplying a better BIOS to the hardware manufacturer.
- Marketing: Hey, folks found them to buy didn't they? There are any number of great products sitting out there that languish without decent marketing. DEC, Novell and Polaroid are examples of companies that had great products and couldn't sell them worth a damn. Apple has good products and flogs them mercilessly to great effect. Take a lesson who is doing well and who is circling the drain or already gone.
- Product Line: Nobody wants to deal with ten vendors for similar products. Rather it is best to get some semblance of unified technology all under a single set of contracts. That means a vendor has to offer a full range of products even if they're not all necessarily completely built by them.
Buy on price, buy on specs, buy on brand name, all are foolish. There's a lot more to a PC then those qualities considered alone. For those all proud that they build their own PCs, well bully for you. How much time did you spend learning what components you wanted, from what vendors you wanted to buy, learning what is required to build a PC and how to go about it? Most folks don't want to invest their time but buy their computers off the shelf with all of the above already done for them.Build a computer, build a house, customize a car, they're all decisions with their own advantages & disadvantages. For the majority just buying the darn thing outright is the way to go.
I don't read ACs: If a post isn't worth so much as a nom de plume to its author then I wont bother either.
They did.
JIT inventory is not the same as JIT manufacturing. JIT inventory means your parts/supplies arrive at the factory as they are needed. JIT manufacturing means your widgets/computers/whatever are manufactured as they are ordered by the customer.
In the case studies I have done, (Nissan, Ford) I haven't heard of an auto manufacturer using JIT manufacturing for its primary method. Maybe for specific BTO models, but not across the board. And besides, popularizing is not the same as pioneering.
This probably supports your point, but I can't resist nit-picking just a little. Magna does complete vehicles (including design), although these are primarily OEM'd to other companies as well as their parts are.
You're right about it being lucrative to just make the parts.
Christopher
Mozilla
While I buy the argument that you're paying for a name if you're buying an Inspiron or Presario instead of a nameless econo-box that Quanta could build and sell on the cheap, but taht's not the case with Apple.
Because Apple's proprietary, no outside manufacturer could make Apple-compatable boxes and undersell Apple, not Quanta or anybody.
Basically, Dell and Compaq haven't done much to evolve the actual circuits inside the box, so it really is just a label slapped on the outside. Apple designed the computing architecture of their machines, and you're buying that design, the ROMs, and the OS.
That's a lot more than a nameplate, and something that Quanta couldn't turn around and undercut Apple on...
Kevin Fox