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'White Box' Makers Take Up The Slack
n3hat writes: "This story in the business section of the Baltimore Sun points out that the 'pooter bidness isn't as bad as the publicly-traded companies report. Seems that as much as 45% of systems are assembled by screwdriver shops and other white-box makers, not the big guys." No huge surprises here.
A part's a part. Intel should be overselling its predictable sales by 100% if half the computers are jobbed. AMD's doing no better (and may be losing market share, meaning it's losing unit sales even faster than Intel).
These guys have no real competition.
So if the market's still so healthy, why can't they sell parts?
With the (United states) economy the way it is struggling to stay out of a recession this is a natural step.
A good computer can cost as much as $4000 from a large computer corporation. If you buy the same PC you could expect to pay less (in the range of 250-500). This is quite a sum of money and most people will jump at the chance to save this on their new PC.
What the large computer companies need to do to stay competitive is find way to cut corners like the smaller companies. Skipping the $300+ dollars a box for M$ would be a natural step.
Medevo
45% custom built. That number to me is a bit hard to chew. Yeah, most geeks are going to build there own systems and even build them for their friends. I used to to this but gave up b/c I became tech support and started to lose my social life so I quit. Now I've got a Dell sitting on my desk, a POS compaq as my token winbox and a franken-clone as my wall to the outside world.
Now back to that 45% number, go into your friends houses, or better yet friends of your kids; go into virtually any business that employs more than 100+ people and you'll see a plethora of Dells and IBMs. Besides one friend of mine and the one sitting on my floor, I have not seen a custom built machine out in the wild for 4+ years.
Disclaimer: I don't hang out with too many true geeks
I built my own machine, of course, but someone else could build a system for what I paid, and I paid a lot less than a prebuilt for my functionality, plus everything in my system (except my dvd-rom) is a top name brand; abit, creative, plextor, adaptec, etc. Maybe not my video card... is visiontek a top brand now? :) but it's a GF3Ti200 64mb, and I got it for $94 shipped.
The GOOD thing about buying from dell or similar; You can get a support contract for a couple hundred bucks which doesn't even require you to take your PC in somewhere; Someone will actually come to your house and replace your crappy proprietary hardware. But really, if your local shop has good service, you're better off being able to walk in and yell at someone.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
Interestingly, if Microsoft Windows comes on almost all OEMs (~50%) of the market, then what happens with the rest? Can you validly argue that
reason of Microsoft's (supposed) monopoly is
OEM equipemnt with Windows?
So now I am looking for a way to assemble my own laptop so I can finally get rid of those Winmodems they all ship with...
Please correct me if I got my facts wrong.
In the past year I have worked for a university's help desk and I see plenty of white boxed computers. Most of the white boxed computers I have seen however suck ass. Usually people (at least students) by the cheapest POS they can find, so those types of computers tend to have a lot of problems.
Personally I have never owned a big name brand computer (except for a 386 sx16 from IBM, but, well it wasn't really mine it was the family computer) since I was 12 I have built my own computers. I find that by building my own PC I get several benefits a) quality components b) upgradability c) lower cost.
Not all white boxed computers are shitty however. Before working for the University I worked for a small computer chain (well, if you consider 7 stores small). If the customer was willing to pay for a nice system, they would get an extremely nice system. Nicer than anything that has ever come from dell/compaq/gateway/IBM. The company I worked for built computers just as nicely as I did for my home computer(s).
... well, maybe not always, and 45% is even higher than it used to be, but I remember in the early nineties a study showed that at that time screwdriver shops accounted for 30% of all PC's, making them collectively bigger than any single computer company.
This is a systemic problem with the trade press, which has blinkers in a number of ways. Some are related to who buys advertising (Dell was a slightly iffy outfit back in the days when they called themselves PCs Limited; they basically bought their way into respectibility via advertising). Some are related to the mystique of bigness (reporters would rather rub shoulders with a captain of industry than with a little storefront operator).
I live in a town of 40,000. It has about three screwdriver shops within the town itself. The closest other places where you can buy computers are: one Staples within the town; an OfficeMax nearby; and a number of electronics retailers nearby (Best Buy, Circuit City, some department stores).
ALL the screwdriver shops have been in business, same location, same management, for over ten years. Common sense says they must be reasonably successful, and a reasonable important element in local computer sales.
(And, no, I don't work for any of them--and, as a Mac user, I've never bought from any of them...)
"How to Do Nothing," kids activities, back in print!
The reason is quite clear: big brands use different pricing strategies outside the US, they usually are much more expensive, while 'white box' makers go shop their components directly from Taiwan and pass on the savings to the customers. I am pretty sure big names have given up the home and educational markets here.
So this 45% mentioned in the article seems quite believable from here, the figure seems to me even low!
Not only that, but the ability to run a broken box over to a local shop and have it fixed *while you wait* if it's an emergency is something only a local business can provide. It's also nice to deal with a human being instead of some crappy voice mail system that runs you through five layers of menus before you get to someone who can actually solve your problem.
There is a huge market for local systems integrators that serve other small local businesses. This is, BTW, the way Linux *should* be sold, but not many "Linux vendors" seem to have caught on to this.
If you had a small business, which would you rather do:
1) Call faceless operator at GiantComputerCo with a customer number.
2) Call your computer-hip Chamber of Commerce buddy Al at LocalCompouterCompany, who knows your name, your favorite brand of beer, and your opinion about the Orioles' chances in the playoffs this year?
I have more faith in Al, who I run into at the local bar all the time, than I will ever have in HPDellIBMGatewayCostcoBigCompany. I know where Al lives, he knows where I live. He is going to do his best to keep my computers working because I am important to him. Michael Dell and Carly Fiorina could care less about me. This makes a difference.
Maybe I'm just old-fashioned, but when I buy anything critical to my business, I like to deal with people I know, who know me too.
I'm a Slashdot editor and possibly one of the 10 or 20 most widely-read tech/IT journalists in the world, and emails I sent to several major laptop manufacturers over a week ago still have not been answered. But when I call my local buddies in the computer business, the Slashdot thing and all the tech journo hotshotness mean nothing. They respond to me quickly and politely, same as they respond to everyone else.
I am a major small business believer and booster because I have always gotten better and more reponsive server from local small businesses. Small businesses don't need to buy CRM [Customer Relationship Management] software. The good ones have CRM *wetware* and the bad ones go broke.
Not that I'm against big business or anything, or that I invented the OSDN self-serve ad system specifically to give small businesses a chance to compete head to head with big ones online or anything....
- Robin
Oems are not cheaper, not the mom and pop shops.
The larger companies have the abilities to buy in bulk and get the BEST prices on things and bundle a lotta stuff that you would have to pay mom and pop for and are much better on the warranty(usually).
I am not talking about the Dells and Gateways. But companies like Systemax and others. There used to be plenty of companies like this in the early to mid 90's. Micron, Quantex, Cybermax, sold great bundles at great prices.
I mean you can look at the Home Shopping channels and get a great rig for a grand.
My father bought one. I almost choked him after he called me to see his new box then I saw what he got for 1100 bux.
Athlon 1800
512 DDR
Radeon 64 TV Out
Printer
Scanner(works great) USB
Logitech optical mouse and Internet Keyboard
19 Inch Samsung monitor
Gravis Gamepad
DVD 16x
CDR 32/10/40
Nic(generic but works with his dsl and home network)
Sound(Ac 97 fine for just about anything)
XP Home(like he is gonna join a domain)
A little Digital camera
Works( good for mom)
2 year warranty
and a shitload of software from gretting cards to photoediting...
subwoofer and speakers that look and sound good
Honestly it is a nice box, their second one in 3 years, and the first one is still kicking(in kitchen with new flatscreen for mom, installed tv card, connected coax and now she watches MArtha Stewart and downloads recipes at the same time, I 802 the DSL and they have 4 pcs in various rooms.
Screwdriver shops can;t do this for the price. I have worked in a few, and also been the buyer for several. I used Tech Data, Merisel, you name em, for parts, as a high tier provider and a comparable system built with all hardware and goodies bundled would be about 1600.
PLUS POPS HAS A SUPPORT LINE BESIDES ME.
So look at this place
http://www.cyberpowersystem.com i am not associated with these guys.
I am actually getting my new box from them. CHEAP AND GOOD, and all quality parts. My kinda screwdriver shop.
Puto
The Revolution Will Not Be Televised