So Much For Commoditization, PC Makers Selling More Than Just Boxes

from the Nick-Carr,-are-you-paying-attention? dept

Tue, May 9th 2006 11:54am — Joseph Weisenthal

For years the PC makers have been content to all put out the same grey boxes, only to compete on price, customer service, and logistical expertise. But now things are moving in the other direction. Though Apple now uses the same guts as their competitors, the company is thriving with unique designs and features. HP, too, has been gaining market share from Dell by emphasizing their uniqueness. Today the company showed off their newest laptops which sport fresh designs, new colors, and features for optimizing media. Meanwhile, Dell, which once revolutionized the PC business model, is paying the price for its singular focus on cutting costs. Yesterday, the company, which has seen its fortunes sag in recent years, warned that profits would be weaker than expected. No doubt, part of this shift has to do with the growing popularity of laptops, which, like mobile phones, are part fashion symbol. The handset makers have shown that people are willing to pay a premium for style. But it's also important that when everybody in an industry is convinced of one thing, in this case that commoditization is totally inevitable, bucking the trend can be a strong strategy.

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14 Comments

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jay, 9 May 2006 @ 12:15pm

...I'll take the plain grey box. Thanks
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Justin Siegel, 9 May 2006 @ 12:22pm

Not so fast
I think the market is writing Dell off too quick. First off Dell has done a respectalbe job of improving the look of it's boxes, as well as swimming upstream with its purchase of Alienware. It wasn't 2 months ago that WSJ was suggesting Google may shell out $1 billion to be put onto Dell's boxes over 3 years. Lenovo is struggling, Gateway is dead, and HP is getting a nice bump from having a great CEO, ie anyone but Carly. Apple? Don't kid yourself Apple's computer business is more or less in the toilet. It's all iPod halo. Making pretty PC's, servers, etc. with the exception to some degree of laptops, is like trying to make oil with a fancy fragrance, ie it's a commodity and most IT managers could care less what the office pc's, laptops and servers look like.
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anonymous coward, 9 May 2006 @ 12:23pm

give me the parts, i'll build it myself. thanks!
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Coward I am not!, 9 May 2006 @ 1:13pm

re: not so fast
I think people are starting to realize how worthless dell machines are and its about time. Dells boxes are still ugly! I dont care who you ask. I can pick up a better looking case from newegg.com for less than $50.
most IT managers could care less what the office pc's, laptops and servers look like.You are right! They care about how well they run and the quality of service and support they receive if it does break. I'm afraid Dell doesn't provide the quality service/support anymore and their system tend to last just longer than the 90 day warranty.
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CapnKirk, 9 May 2006 @ 1:15pm

Re: give me the parts, i'll build it myself. thank
That used to be my thought before I realized it's almost impossible to build one cheaper than what you can buy one for nowadays.
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Beck, 9 May 2006 @ 1:30pm

Re: Re: give me the parts, i'll build it myself. t
Capn,

Building your own is not about the total cost. It's about using quality components, each at a good price. The total price might be more, but you have a better computer than one built with commodity-quality parts supplied by the lowest bidder.
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EW, 9 May 2006 @ 2:06pm

Re: Re: give me the parts, i'll build it myself. t
Not to mention that individual components come with their own warranties, usually fairly substantial, so you don't have to shell out extra money for a company's tack-on warranty. I think building yourself is still the sensible option if you have a little know-how.

Back to the original topic, people were bound to catch on that Dell et al are just large-scale assemblers, doing what many teenagers do in their basements. A Dell box and an HP box look more or less the same on the inside, so something else has to set them apart. Offering a wide variety of products, good looking cases, and a snazzy image (as in, it's cool to be seen with an iPod) will do a lot for a company.
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haywood, 9 May 2006 @ 2:06pm

Re: Re: Re: give me the parts, i'll build it mysel
While I'll agree, you can't build a better $300 computer, as the price goes up, the advantage of building increases exponentially. When you are willing to shell out $1500+, you can get much more computer $ for $. There is no high end box Alienware or other that can compete with the ones I've built, and I held back a lot to keep it under $2500
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Anonymous Coward, 9 May 2006 @ 2:47pm

Re: Re: Re: Re: give me the parts, i'll build it m
$2500 are you KIDDING ME...sheesh i got prolly the same parts you do for under a grand...., and put it together myself of course, i love the way alienware looks but im not shelling out another $3000 for a stupid custom paint job...a plain antec atx case with a window and neons is as much as i need for flair effect, or maybe if im REALLY strapped for visuals outisde the box(isnt it on the moniter that counts?) then ill get a bunch of plexy glass a sharpie a few more neons and a dremel as well as a powersander and paint and do it my goddamn self...sheesh i really dont see why people buy from those, ive had my friends searching for pcs i tell them to get the fuck off that comp write a list of what they want, and $500 - $1000 for buying/shipping and tell them theyll have their godlike comp in 2 weeks, ironically unless you pick overnight shipping(ooooh add 500 bucks) thats about the same time that beautiful alienware will arrive at their house via snailmail....
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Jack Paster, 9 May 2006 @ 3:28pm

Re: Not so fast
I don't think Google will be buying any of Dell's XEON only commodity boxes any time real soon. Even though Intel's CEO is on their board, they are going gaga for Opteron, as well they should.

Dell made a deal with the devil for marketing funds, and now they are back at the crossroads..
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haywood, 9 May 2006 @ 5:54pm

Re: Re: Re: Re: Re: give me the parts, i'll build
I think it is just better record keeping. i think i can account for $1000 + off the top of my head; Lian li pc 65 ~ $120, Antec tru-power 550 ~ $120, soundblaster 7.1 surround, ~ $120, Viewsonic f95fx ~ $230, 2 WD 250 sata ~ $180, 1 36 gig raptor ~ $105 Still leaves room for top of the line processor/ board, 2-3 gig of name brand ram, top of the line vid card (s), dvd writer, accessory cooling, gaming mouse, good quality keyboard. Somehoe I doubt we got the same parts.
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Anonymous Coward, 9 May 2006 @ 6:30pm

Re: Re: Re: Re: Re: Re: give me the parts, i'll bu
well there is a few differences i use a lian li pc70 for one idk my power supply, its a 550 watt tho i have a soundblaster card same satas dual crt moniters 21 inch($40 each, better for gaming imo + a helluva lot cheaper, and if you ahve the space why not utilize it=)) 2 gigs ddr400 ram 64fx processer logitech g15, razer copperhead, dual geforce 6800 sli, gonna be adding a watercooler soon, right now im using a bigass jet engine thing, cant remember name just google jet engine cooling fan and youll prolly find it, dvd+rw cd-rw 6in1 media reader ya so i got more bang for my buck i think >.>, its just finding good deals on ebay newegg and tigerdirect
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Randall Cronk, 10 May 2006 @ 10:56am

Nick Carr are you listening?
The state of the art keeps changing but so does the definition of the art. People who think it's all over for high tech ignore the fact that what is high tech today won't be high tech tomorrow. The benchmarks will change, but so will the criteria.
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Rich, 12 May 2006 @ 10:25pm

Commoditization and End of Moore's Law
Commoditization has only just begun. There is an interesting article on it at
http://boston.indymedia.org/newswire/display/73250/index.php

but this is just snippets from a longer article.

How can I get my hands on the original?

I agree with the poster that end of M.L. and commoditization are like a Category 9 storm.
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