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IBM Leaving Retail PC Market
SabbathRM sent in this story from nyJournalNews.com about IBM's plan to stop retail distribution of their Aptiva PCs on January first. They'll still be available over the Internet, at least for the present, just not on store shelves.
When I want a computer, usually I wanted it yesterday. I've bought both HP and IBM Aptivas, and of the pre-packaged computer choices, I find the Aptivas to be by far the best. They have nice big cases, they're easy to open, memory slots right in. And so far my systems have been very reliable.
/any/ components in common with an Aptiva. Aren't even the CPUs different?
On the other hand, the systems I buy are always the open box discounted units, so I daresay I haven't given IBM much in the way of profits from my purchases. The open box systems are significantly cheaper and still work great.
I will admit that it bugs me that they've cheaped out on the keyboard, but the last one I bought cost me less than $ 400. And at this very moment, it's running BeOS just fine.
I suppose they had to do something to cut off the bleeding of cash, but I wish they hadn't killed off retail sales entirely.
ThinkPads are the best - I'm using one that's almost three years old (running Linux), and I still love it. To the person who said that they would be doomed because "normal" PC sales support them, I'd like to say that I doubt it. I don't think my ThinkPad has
D
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Most of you guys have missed what they did. IBM has teamed up with the 5th largest internet site. An e-commerce company with 30-40 million hits a day. It ran 'em clean out of their desktops. It may be worth noting here, that the site has only been up a month. Clue: IBM knows where the money is. Now, I have my gripes with a LOT about IBM, but hey- they know how to make money with this move. Guaranteed. Wanna find out more about that e-commerce company? More of us can profit by this instead of just BIG BLUE. E-mail me. -HQML@HOTMAIL.COM (Yes, hotmail.- on purpose. :) )
My dogma ran over your Karma....My Karma's a Greyhound: ugly, but strong. -You may think you know what, but I know who
Some chance. They are going to find themselves trying to play catchup with Dell (between their standard site and www.gigabuys.com they are trying to sew the online PC market up). This is IBM's way of saying "Fair enough. We've had enough". The economies of scale companies get from bulk-manufacture of PC's, as well as the clout they get in getting first-dibs on scarce parts (like RAM and LCD screens) mean that companies like IBM and Siemens that are trying to make money by flogging not-much-better-than-dell/compaq PCs, but charging a lot more, are going to get swept away. There is money to be made by selling PCs in retail, to morons that don't know better, but it's a shrinking market.
We've all been listening to people for years saying that the internet is the way of the future, but there's been little tangible evidence; the web has been viewed traditionally by businesses as a way of supplementing existing sales models rather than supplanting them.
"In the eyes of many people, this will mean that IBM is pretty much getting out of the consumer business"
Possibly. But it'll be interesting to see if this view still holds this time next year. Certainly if I were buying a laptop, I'd do it over the web. I imagine I'm not the only one.
Funny how IBM gets out of solid stores and goes to online only. Meanwhile Gateway (was it last year?) which was an internet (or phone) only store goes to having their own stores. ;).
The article said that IBM thought they had problems differentiating their product from the rest of the market and I can understand why. Mainly I think the three largest problems they had were 1)no good marketing, 2)badly trained sales people, 3)bad image.
1) Bad marketing - Common buy a cow you want a cow. And our boxes are waterproof! Only offering proof by contradiction here.
2) Sales people - they were selling the machines at Radio Hut. My god the few sales people I talked to there had such a hard time telling Apples from PCs. It was kinda frightening. The last sales person finally got rid of me by saying he liked the speakers and turning them up really loud.
3) Image - IBM still looked like a big business company. Not something for homw users. I mean Gateway saws that cows will be there to help me if I call
-cpd
I realize that the story was skeptical, but IBM doesn't make decisions lightly. They make mistakes, sure, but carefully thought-out mistakes, and historically, they have made a lot of very good decisions.
Selling computers through the internet has a couple of advantages:
1. lower overhead (at least in theory)
2. presentation control
The first is obvious, but the second is, in my opinion, more crucial. The computer market has grown in complexity, and retail stores have not kept up. Sure, their are some bright people out there working at Best Buy and Circuit City, but for the most part these people, in my experience, are sorely in need of information.
Differentiation is vital to a company like IBM. They charge more for the "same" machine as some competitors, and therefore, they have to make the consumer aware of the IBM added value. With web sales, they can control and monitor the information made available to the consumer, and that is a real boon.
I don't know that this will really bring about the end of the (indirect) retail channel, but it wouldn't surprise me to see others follow suit. Look how well Dell and Gateway do, despite their products' premiums - they have primarily direct (that is, more controlled)-channel sales.
-Yoshi
However, I would have thought IBM would have clung to the PC market for longer than that... They did launch the whole PC trend in the early 1980's.
As it's been pointed out, the machines will continue to be available throughout the Internet, which means companies will still be able to honour that IBM-exclusive deal they signed. I have a feeling companies don't much care for performance, anyway...
Good news is, they're staying with the ThinkPads. These machines are slick! However, I can bet they won't stay competitive for very long... Producing laptops works much better when you're also making PCs. Give IBM a few years, and the ThinkPads will be gone as well.
"There is no surer way to ruin a good discussion than to contaminate it with the facts."
"...less than two weeks after the division said it would eliminate as many as 1,000 employees..."
I think I'd consider that going overboard a little. What possible justification could this division have for killing 1,000 people? better yet, does this division have the authorization to decide that or did they have to go to the IBM head council? Regardless to the answers to these questions, IBM must be stopped at any cost.
I wouldn't doubt that other companies that sell computer packages (such as Compaq) aren't doing as well as they used too either. It seems to me that as the general public becomes more and more computer literate, they are starting to have their computers cutom made by smaller computer stores. Which is the cheaper and better way to go. Even people who know nothing about computers often have a friend who can help them with this. I wouldn't doubt these larger companies begin to offer more customizable packages in the future, just to compete.
I mean, please. Phrases like "helped usher in the computer revolution nearly two decades ago" or "the market that it helped spark" could have just been cut and pasted from IBM's press release. (Or one of Apple's for that matter...)
Amazing that even though Microsoft directs the future of PCs more than any other single company, IBM still means "personal computer" to the average reporter. Then again, these are the same people who can't get the difference between hacker and cracker straingt in their heads.
I use Macs for work, Linux for education, and Windows for cardplaying.
The traditional way of selling computers through resellers is going to eventually go by the wayside. There are just too many advantages of the "Direct Model". Michael Dell really hit on the right idea and has made it the basis of Dell. Other "legacy" companies are having a hard time cutting out the middle man they so firmly entrenched, and are, I'm sure, regretting their dependency on the current infrastructure. Dell is exploding in Canada right now, and doing very well in the US. Why? Because we^H^Hthey are sticking with off the shelf parts, off the shelf software, direct sales, direct support, and outsourcing the services portion of the business to multiple companies. IBM can only hope to have that kind of approach. There's too much cruft in IBM's business model to make it lean enough to compete with the direct sales of Dell. They realize that, though, and that's where the 9 billion deal for parts came from. There's a lot of room for companies to make money from Dell's success, and it looks like IBM is realizing that. They have to, or course, keep a hand in the market if just to keep up appearances, though.
Okay, end of commercial.
The reason why I personally feel Aptiva's suck it the simple fact that I owned one for 1 weekend and that was the 1st and last time I ever owned an IBM desktop computer; it was allmost 2 years ago (end '97 / begin '98) and I was, next to Linux, pretty deep into OS/2. Heck; I mainly choose the Aptiva (could buy it from work so I got a bit cheaper) because I was very hooked on OS/2. Everything went fine in the beginning; I just bought myself Tombraider II and was looking forward to play around a bit that same friday evening.
The horror immediatly struck me; Lara turned white at a resolution of 800x600:32! The videocard was an ATI Rage 3d (pro I believe). I figured it was just the game and started partitioning. I wanted; win95, WinNT, OS/2 and a little part for Linux.
That was the beginning & the end of that first weekend in '98 for me and I'm still pissed by it. I downloaded all the OS/2 drivers I needed for the Aptiva I got but at the very beginning OS/2 refused to partition my harddisk! Wasn't supported. So I called the helpdesk and they pointed me to another driver. Didn't do it. 3 different drivers later it sorta worked; I got OS/2 finally installed. And then my sound didn't work, my video was totally crap (640x480:16), and I kept getting harddisk errors from time to time.
I'm pretty sure I spend over 2 - 4 hours in calling the helpdesk (and believe me; I'm not that demanding but I did want to see the IBM computer I bought working with IBM's OS) and finally we came to the conclusion that this computer wasn't capable in running OS/2 which still eludes the helpdesk operator (we kept in touch) and myself. Fortunatly I could get my money back and later I decided to buy all the different parts I needed & assemble the PC myself and up until now I'm very happy with it. It even ran Tomb Raider II happily in 1024x768:32.
But if this is the sort of PC IBM delivered back then (and I heard more stories from people who also share these experiences) then I feel it sucks. You pay more for the IBM brand and then I expect an IBM software product to run. Not some Win95/98 OS because allmost every PC can run that sort of thing. I refuse to spend some 1500 Dutch Guilders extra just because a PC has the IBM name on it. After reading this article I guess more people felt the same way.
However; if the Aptiva dissapears then it doesn't have to result in IBM leaving the consumers market. They can allways come up with a new line which should be far more easy for them to accomplish these days; Major contestants are Win9x, WinNT (which will surely run on an Aptiva based machine) and Linux. I'm sure those will run on some 'Aptiva-2' line.
I doubt this means as much as people think. I suspect that IBM sells far more PCs to businesses then through the retail market. There are still a lot of managers out there (usually with "VP" in their title) who still remember the old adage "no one ever got fired for buying IBM". They tend to buy PCs in lots of 100 or 1000.
Because of this, I've used a number of IBM PCs. Some sucked rocks, others were really nice. I actually have an odd affection for the old original microchannel line. Those machines were solid as a rock and could be disassembled with a quarter.
It is so sad when computers go obsolete. The day after I started at my first real job, the head programmer got an IBM Model 80 (a 25 Mhz 386). I remember feeling incredibly jealous. Just a few months ago, I worked for a company that was finally putting 150 of them out of service. They are only so much junk, now. sigh...
The cake is a pie