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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.
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.
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."