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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.
You control all your components and the way they're installed. I've seen too many of these boxen have loose ribbon cables impeding air flow, insufficient heat sinks, cheap PC Chips motherboards *shudder*, and any number of other problems. Even the good pre-built deals have a catch somewhere.
Build your own, learn something about hardware and software, and feel more confident to upgrade it. It's only slightly more difficult than putting together Ikea furniture.
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?
From the article:
"Plexus built 20 machines, each with 2 gigabytes of processing speed and the ability to run the thousand-dollar video card needed for the engineering program"
I wonder if he put 900MHz or memory into the machine?
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
This article is interesting in that it talks about "... surging white box volume" and the industry taken as an aggregate -- because Plexus' stated 150 units by themselves aren't going to impress anyone but Plexus -- is an ever-more-important market for components manufacturers and for customers in the position to consider alternatives.
But I don't think anyone really ever disagreed with his final point: "The lesson: Publicly traded companies are not the whole computer industry, and the publicly traded stock market is not the whole economy." Was this ever a source of controversy?
The reason Dell and Gateway and large manufacturers are so important have to do with the support contracts they offer, the shipping options, the warranties, the phone support, the willingness and ability to ship next-day in the event of component failure: In short, the security blanket that makes department managers at large companies feel comfortable purchasing those systems.
Now we could argue back and forth about how you know some guy that purchases systems all the time from Little White Box Manufacturer and they're great and cheaper and you don't know why everybody doesn't do it, and that makes sense because to the Slashdot community those white boxes are very, very important. For many of us it's our job and for the rest if it isn't directly our job then it's an important facet. But for the typical purchasing manager the irony is that they are just white boxes. If he feels he can *safely* cut costs he might, but he will check on the support features and he might not want to be bothered with long term concerns about equipment. Not that small manufacturers don't have excellent support. But he doesn't know them and here enters the important issue of brand value, identity, and leverage.
Not to mention that the Dells and Gateways can, in fact, ship in the hundreds of units per day, manufacture in the thousands per week and purchase components in the billions of dollars per year. That's why they're important and has that really ever been a mystery?
This reporter got a good story and then took the wrong angle.
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.'"
2 gigabytes of processing speed
This is not a typo. It's a new technology. Humans have had speed for a while. Take some and it's speeds up the heart rate and some other things.
CPU's are now taking advantage of digital speed. These new white boxes have 2 GB of processing speed. You just need to set up a cron job to realease a couple bytes of speed into the CPU every few hours. It'll give it a wonder boost in processing power. Be careful, give the CPU too much at once though and you'll fry it.
Damn, most pierced, painted goths have better taste in beer. Pass me a bud, and I'll install Windows 2.0 on your system.
Or, did you mean the *other* kind of bud?
Cheers
-b
... 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!
I used to work for a company and we built some machines. To be honest there was absolutely no way to compete with Dells and the like on price. The only reason we built systems was to service our regular consultant business. For the most part we only built systems for business customers. Some just demanded the best most stable systems, others had special needs. For instance high end graphic design workstations, and some servers. Sometimes we would build them for sound studios and such. If someone wanted a regular system we would just sell them a retail HP or IBM, it was cheaper for them and more profitable for us.
Our component cost often exceeded the cost of a whole Dell system, but we cherry picked only the nicest most stable stuff. Even considering that we generally favored. You can buy a $10 power supply, or you can get a $50 Antec. Chances are that $10 supply will fail in a week while the Antec will last 5 years. Ditto for graphics cards, (second most failure prone component.) Frankly the cost of having a productive worker without his computer for a day or more exceeds the cost of getting a good computer to begin with.
If you find a white box system cheaper than a Dell you better be pretty suspect of what is in it.
If you want five PCs for your plumbing supply company, that looks like a good deal. Buying your own machines at Costco means figuring out how PCs work, which is a distraction from plumbing.
that both Dell and Gateway started out as "White Box" system builders. I wonder at which point they became important enough to be counted?
The dogcow says "Moof!"
If you can find a local shop with good support...
In my experience, the inability to find such a shop is the #1 reason for turning to Dell/Gateway.
You get the good components. (at a local shop)
While it is more likely you'll get good components from a trustworthy local vendor, it can be very hard to find one that is trustworthy. It's easy for me to spot the scum, but it is very hard for people who are not so tech savy like my parents. When a normal person goes computer shopping, they see some numbers like 1.4GHz, 512 MB Ram, 20 GB hard drive. They have no idea what an AGP/PCI slot is, what it means to have onboard sound/video/ethernet/modem. They don't recognize brand names like Asus and Abit. Local dealers often take advantage of this by selling you a system with cheap/slow RAM, crappy offbrand all in one motherboards, in a case with an inadequate power supply.
That said, 5 o'clock computers, best shop I know of. Won't buy anywhere else.
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!
Just as a note, I've had some very good and very bad experiences with White Box systems, although I'd never buy a pre-fab machine despite the bad. The ability to pick what goes in is more than worth it. However, it's all about where you get it from.
Personally, the biggest mistake I ever made was to buy a custom box from CompuSmart (for all of you Canadians out there). They originally were good on price but the system was a nightmare. The power supply was wrong for my Thunderbird 800, and consequently burned out the motherboard and processor. Of course, this was only on the fifth trip into the shop that they discovered this. Unfortunately, all my parts were on warranty there. They kept telling me it was either the RAM had slipped out or that it was somehow my fault that the system wouldn't boot. Then, they took an agonizing four weeks to get a replacement motherboard (and wrote nasty messages into their in-store computer system about me when I kept coming in and checking up on it (yeah, I saw those messages, Jerks)). Finally, once the four weeks were up, I took it home and couldn't get the network card to work, combined with the machine sporadically restarting and giving me registry errors. Another trip to tech support and they diagnosed that the processor was screwed (way to check that out the first time, guys). Another SEVEN WEEKS later, I got my new processor. Luckily I got a replacement/loaner or I would have snapped. Then they tried to tell me that it was my fault that the network card didn't work, despite the fact that it had been sitting on THEIR DESK for the four weeks that the motherboard was out they were the only ones who touched it during that time. Only a fresh reformat fixed the problem.
At this point, I swore never to buy from them again. When the SAME PROBLEM came back two months later, I took it to another local small-time business who diagnosed it correctly and fixed the power supply in three days. I will definitely be buying my next system from them (PC-Place (the small-time shop in Saskatoon, Sk)).
So as a lesson, white box is the way to go, make sure you know who's building your computer, and NEVER BUY FROM COMPUSMART!
- Relativistic? That's barely Newtonian!
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