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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.)
Having run tools like dmidecode across a lot of systems the laptop market definitely has a lot of rebadging going on. Taking apart other devices shows its nothing new. HP printers are full of canon parts, HP's early digital cameras are Konica, Dell laptops don't all seem to be made by Dell. Most vendors desktops at the lower end are handled by big .tw build to order houses.
Its not cost effective to run a computing hardware company in the USA
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!
I used to build systems for friends and family by going to the computer shows. The downside was always having to support software issues, but I iused to make some good cash from it.
I now turn them away and tell them to buy from Gateway or Dell instead - a Gateway can be had now for as little as 600.00 US complete. My profit margin would be very slim having to build it myself.
The only downside I see is that the namebrands tend to have some hardware issues if you try to change the OS from whatever they ship with. Seems as if the sound card/ video card is proprietary in some fasion, and even switching from the Millenium OS to Win 98 can be a chore since the manufacturers don't supply drivers for the other equiptment.
The upside is, I can refer them to name brand tech support and go back to gaming instead of sitting on a phone for 2 hours fixing a Microsoft bug.
_ _ _ Go for the eyes Boo! GO FOR THE EYES!
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.
One of the other big names is Compal.
Read this for more information and specific model numbers.
I just bought a "Toshiba 3005" from them, and since they don't come default operating systems I didn't have to may the M$ tax and get an extra battery instead.
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It's OK to be social, just don't tell anyone about it.
I don't know the situation in the US or elsware but in Jamaica the #1 selling desktop by a huge margin is Dell. They actually have a market share in the 50% region. Next in line is Compaq at about 10% followed by all the local white box clones which share most of what's left.
Why the wide difference? Dell has an agreement with a local company to honor the Dell onsite warranty. This means that when your system goes down someone comes to your house with a spare part (after you talk to tech support on one of a very few 1-800 numbers which is free from Jamaica).
IBM, Gateway and most clones don't give you that so if you need that level of support you haven't really got a choice.
I still buy parts and asemble for 70% of the cost and just deal with the local wholesaler for the waranty on each individual part.
--= Isn't it surprising how badly I spell ?
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 story, no registration required.
And before someone tries to scold me for this again: This is from a partnership that NYT has with Asahi.com, and it adds Asahi.com's ads to the page. Instead of "paying" with your registration, you're "paying" with the act of barely glancing at Asahi.com's ads for a split second before moving on to the actual story. And the New York Times seems to be fine with it, because they set the whole thing up.
Yes, yes, I do. Enjoy.
You are looking at the future of manufacturing. This business model is growing incredibly fast. To see why look at the XBox process. MS decided they wanted a piece of the console pie, so they got together with a firm that specializes in high tech manufacturing. MS is a company designed around producing software, that is what they do most efficiently. They know that they will not be able to build and run physical factories with the efficiency of a manufacturing company. These specialized manufacturers are amazing. I read in Wired about how the company doing the XBox was in on the design process and they were cutting costs and production times left and right from MS's original design. I understand that the Mexican plant they are using has trucks coming with parts and leaving with product every five mins. and planes taking off and landing at an airport (which they negotiated to be build) every 15 to 20 mins. That's a degree of efficiency MS could never reach. Simply businesses are specializing more to reach peak economic efficacy. BTW Sorry for the terrible structure of this paragraph, I'm at work.. Not much time.
Business News and Resources: www.usasource.net
Just look at the serial number. If it starts with QT, it was made by Quanta.
I worked for Dell, specifically in the Latitude Home / Small Business division, back in 1998 and was shown all the different models on the market released by various OEMs. Then I was given a spreadsheet with system specs which included a column for 'manufacturer' - Quanta and a couple of other names were listed.
:)
Working with the latest laptops, hardware still in beta testing, helped me understand the relationship Dell had with the Taiwanese manufacturer. Dell engineers worked very closely with the engineers on the other side of the world, and we changed specifications when necessary. This is, of course, to be expected - hopefully an OEM doesn't just buy a few hundred thousand laptops without testing them first
One item we changed comes to mind immediately - the rubber feet on Inspiron 7000's were originally made of a material that marked nearly every surface we set them down on. Many people had multiple black spots and marks where the systems sat on their desk. Ick.
Another important matter is support - some people might know that the same company makes systems for multiple OEMs and might even release systems under their own name with the same specifications, but I'll take the system with OEM hardware support that rocks - every support system might have glitches, but after working in Dell's support division, and using them in my current position for three years, I'd prefer to stick with them. I won't say no one is better, or dell never screws up, but they support their product well, very well, in my opinion. Overnight parts when available, Complete Care for LCD breakage and spills that can turn in a system into a paperweight very quickly.
And as far as OEM designs go, the Latitude base framework is hard to beat - there are perhaps a dozen models with interchangeable batteries, optical drives, floppies, power supplies, etc. Supporting them in the office is pretty simple - even if you've been buying the newest models for three years you can use the same spare parts for each as parts wear out. Every office has the same stack of power supplies - sales dorks always leave home without them. Support staff in each office has a very common experience. I don't know of another OEM, perhaps Sony, with such similarity between models. If there are, hey, hit reply.
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.
In addition to the name plate, you are also paying for support. I doubt that the service is as good when you buy computers direct from the manufacturer at a discounted price. Laptops, in particular, tend to break and usually cannot be fixed by swapping out parts, like a desktop system. I've had to return my DELL Inspiron 7K two times (once for a keyboard problem and once for a display problem). In both cases my laptop was returned to me in two days. For desktop systems, the support is not important to me as I can fix 'em myself.
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.
Funnily enough, the last time I checked with my IS guys, I could put together two complete no-brand systems for what they pay for a full Dell system + support. Given that I spend a lot of time compiling, having two boxen would be a positive benefit. I have the desk space, I have the inclination, and I think we can live with the electricity bill. Worst case, a component fails and I end up with one machine plus a box of spares, with a zero second turnaround, never mind one day.
I suggested this, and got the usual answer: we buy standard Dell boxen because it removes support and maintenance issues.
That sounds fair enough until you consider that I receive exactly zero support for the problems that I have on my machine. We're an R&D shop, and taking risks and pushing things until they go wrong is pretty much what we do for a living. What the IS guys really mean is: nobody ever got fired for buying Dell (/IBM/Microsoft).
If you were blocking sigs, you wouldn't have to read this.
Funnily enough, the last time I checked with my IS guys, I could put together two complete no-brand systems for what they pay for a full Dell system + support.
You forgot about the killer hidden cost: labor. I don't disagree that it'd be much cheaper in materials for us all to build our own boxen (but not laptops, mind you). Factor in just $60/hr for salary, benefits, and support costs for an in-house box-builder. I can build a standardized box in less than an hour, but then there's the OS install, service packs, and device drivers - there goes another two hours. Toss in the app installations, and there goes half a day, and more than $300 in labor - and we haven't even discussed burn-in testing.
Or, I can just pick up the phone and get my customized install done by Dell, drop-installed to anybody's office. Zero labor costs.
What's your damage, Heather?
I personally think their stuff looks bad. Though cheaper material, the badges here are at least much more colorful.
XML is like violence. If it doesn't solve the problem, use more.
Manufacturing outsourcing happens everywhere, not just in tech. Sure, electronics is a big business (that's why the Flextronics of the world do so well), and laptops are particularly ripe for outsourced manufacture, but other industries have products made for them.
The best comparable example I can give is the auto industry. Many car makers have alliances with one another - erstwhile competitors make each other's cars, sometimes in a straight re-badging, other times in a joint assembly line. here's a few "for instances":
Toyota jointly owns a plant with GM. It makes both the Toyota Corolla and the Chevy Prism. They're the same car with different trim. One factory, one car, two companies. Joint ownership.
Honda had no SUV on the boards when the SUV craze struck America, so they came up with the Honda Passport. It's an Isuzu Rodeo with a Honda badge. It's made in Isuzu's factory, and sold by Honda. A straight outsourcing deal.
Ford owns a great deal of Mazda (I'm not sure if they have full control or not). The Escort and Protege were identical - and the Mazda Navajo was just a Ford Explorer Sport. This is an example of two interlocked companies filling out their line together.
When tech manufacture is outsourced, the brand-name company can worry about the design, the feature set, and all the marketing. The manufacturer can worry about actually doing what's possible, and squeezing every possible cent of cost out of the build process. The marketing company then doesn't have to worry about owning expensive factories that depreciate, and the manufacturer can concentrate on building better, faster, and cheaper - with a variety of customers and products that avoids idle plants and workers as best as possible.
-- Josh Turiel
"2. Do not eat iPod Shuffle."
- 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.
You forgot about the killer hidden cost: labor.
And you are forgetting the tech support center's secret weapon: automation.
The crew at the company I work for can do a Win2k install by installing a CD, attaching a network cable and powering up. About 90 minutes later is a full standard 2k install, including all the apps and service patches and whatnot we've standardized on. If we had exact hardware across the board we could Ghost it even faster.
That $300 labour charge is only incurred when you have to babysit the install. Hell even my Slackware-based firewall installs go in in about 15 minutes now because I use custom tagfiles and a few of my home-rolled packages.
Lines like this One of those clients, Dell, has prodded Quanta to move more of its production to mainland China, where labor and other costs are much lower. in the article are pretty worrying. Anyone who has read "No Logo" by Naomi Klein will tell you that the outsourcing of piecework like this to countries with bad human rights records increases the problem of sweatshop labour.
China in particular has a bad reputation for this sort of thing, abusing both its own people and those of nearby countries that it lays claim to (Tibet for instance). Companies like Quanta in the article are the "acceptable face" of this work. They hire subcontractors who in turn hire their own subcontractors, hiding the problem from their parent companies. However if Dell are asking Quanta to move production to China, I would speculate that they almost definitely know what the end result will be.
A little planning goes a long way...
At "The Register" (circa early 99)
"Everyone knows that Taiwanese companies make notebooks for big companies like IBM, Compaq, Dell and HP. But which company makes what? Here's the OEM list, courtesy of a Taiwanese wire. Quanta makes Gateway, Dell, IBM, Apple and Siemens products. Acer makes IBM and Hitachi products. Inventec makes Compaq notebooks. Compal makes Dell and HP notebooks. Arima makes Compaq notebooks. Twinhead manufactures for HP and Winbook. Clevo makes Hitachi notebooks. Mitac manufactures for Sharp. GVC manufactures for Siemens, Micron, Apple and Packard Bell. And FIC manufactures for NEC and Packard Bell. ® According to the survey, total notebook from the small (240 miles long) island amounted to 5,420,000 in 1998."
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
And you sound like some geek who just got his A+ and is still excited about finding his first HDD controller failure. Just because you know how to service a computer yourself doesn't mean it's a good idea. I'd rather pay Dell to worry about that piddly crap so I can spend my time working on interesting things instead of wiggling cables and running repetetive diagnostics. My company would rather pay Dell than have me doing it too, for good reason--by the time I've spent a couple hours fiddling with a hardware issue, I've wasted more in lost productivity and wages than the warranty would have cost. (we won't discuss lost productivity and wages resulting from surfing Slashdot at work ;) )
Hardware was fun when I was new to the field and hadn't seen it a hundred times, and if you're just getting into things (or are just hyped on the 'cool tech' factor and don't understand cost/benefit ratios) I can see where you're at--but it certainly doesn't make sense in every case to try to service the small stuff yourself when there is a warranty available.
No relation to Happy Monkey