The Laptop Supply Chain

Carl Bialik from the WSJ writes "When a U.S. consumer orders a laptop from HP or other big sellers, how does the machine get made? Often via a complex supply chain in Taiwan and China, shaped by rocky cross-Strait relations, according to the Wall Street Journal: 'Outsourcing to low-cost, high-quality Taiwanese manufacturers has helped make Dell and H-P the world's top two PC companies in terms of sales...But the relationship between U.S. computer firms and their third-party manufacturers can be tricky. In the struggle to retain an element of control over their suppliers, H-P, Dell and others play contract manufacturers against each other to keep prices falling and ensure no supplier gains too much leverage.'"

Comments

uh?

[Mr_Silver]

In the struggle to retain an element of control over their suppliers, H-P, Dell and others play contract manufacturers against each other to keep prices falling and ensure no supplier gains too much leverage

... and how this is different from every other industry?

As a consumer, if you want your products nice and cheap, then these sorts of negotiations are par for the course. If they didn't do it, you'd take your money elsewhere.

Re:uh?

[dsginter]

If they didn't do it, you'd take your money elsewhere.

There's really no "elsewhere" in the laptop market. All manufacturers make dirt upon initial sale but then rape the customer when they break the LCD or need a replacement battery. This is why the laptop industry needs an open laptop form factor - LCD swaps would be about $150 and batteries would be $20.

FWIW, I actually do laptop repair on the side and I've noticed that every battery pack contains the same 3.6V cells. There *is* a standard, the vendors just put the cells into proprietary cases so we can't interchange them.

Re:uh?

[mikael]

Look at the X-ray photographs of laptops. Another one here.

You can clearly see that each "single" battery, is a serial arrangement of eight smaller cells.

Interesting...

[lucabrasi999]

From TFA:

Outsourcing to low-cost, high-quality Taiwanese manufacturers has helped make Dell and H-P the world's top two PC companies in terms of sales. International Business Machines Corp., which outsourced less than half of its laptop production, according to Merrill Lynch, and operated its own factory in China, consistently lost money on its PCs. It sold the business this year to China's Lenovo Group Ltd., which has used Taiwanese companies to make most of its notebooks in China.

So, IBM used to keep most of it's own laptop production in-house. Which may partially explain why the ThinkPad's are, by far, the best laptops around. Let's see what happens to the ThinkPad now that Lenovo runs the show.