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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?
... 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