For Now, Big PC Makers May Benefit From Lower Costs
from the fleeting-profits dept
Commoditization is always a threat to PC manufacturers like HP and Dell, although by most accounts HP has done a better job of differentiating its products than the competition. But there's also an upside to commodization for these companies: cheaper components. A new research note from a Wall Street analyst argues that both HP and Dell will realize meaningful benefits from cheaper components when they report their coming quarterly earnings. In addition to lower DRAM and LCD prices, the ongoing price war between Intel and AMD will prove particularly beneficial. Whether these companies are actually taking advantage of these savings or whether they've been forced to completely pass them on to consumers depends on the market dynamics. Between Dell and HP, they may have enough of a grip on the market to avoid an all-out price war themselves, but such a situation can only be temporary as they'll be forced to cut their own prices eventually.
Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.
Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.
While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.
–The Techdirt Team
Filed Under: chips, computers
Companies: amd, dell, hp, intel
Reader Comments
Subscribe: RSS
View by: Time | Thread
Will botched investments drive up prices?
Chip maker Intel has announced it will shut down its research lab in Gyeonggi-do, near Seoul. The lab had failed to produce significant results, because Asians in Asia receive poor quality educations that do not emphasize critical thinking or originality. The lab is part of a high-tech park including Motorola, Google, and Oracle, but they have also failed to perform.
http://www.chosunonline.com/article/20070106000011
Intel says it plans to open a $1 billion chip factory in Vietnam in Fall of 2009. They admit to facing "technical challenges", including Hanoi's antiquated power grid which does not provide a reliable power supply. They are bribing government officials... I mean, "working closely", to get three new power plants online by then.
However, their biggest problem is in the acquisition of personnel. Since no high-tech industry has existed in Vietnam, there are no qualified workers capable of working in the space-age factory. Intel is again "working with local universities" to coordinate the production of skilled graduates, as if Asian universities are such flexible places, as if new college graduates are so productive.
Can anyone say "$1 billion disaster"?
http://www.eetimes.jp/contents/200708/23625_1_20070813124537.cfm
[ link to this | view in thread ]
Article Source: Wall Street Journal
Past a guarded gate on the outskirts of this city sits one of the world's largest factories. In dozens of squat buildings, it churns out gadgets bearing technology's household names -- Apple Inc.'s iPods and iPhones, Hewlett-Packard Co.'s personal computers, Motorola Inc. mobile phones and Nintendo Co. Wii videogame consoles.
Few people outside of the industry know of the plant's owner: Hon Hai Precision Industry Co.
With a work force of some 270,000 -- about as big as the population of Newark, N.J. -- the factory is a bustling testament to the ambition of Hon Hai's founder, Terry Gou. In an era when manufacturing has been defined by outsourcing, no one has done more to shift global electronics production to China. Little noticed by the wider world, Mr. Gou has turned his company into China's biggest exporter and the world's biggest contract manufacturer of electronics.
[ link to this | view in thread ]
[ link to this | view in thread ]
I find it incredible that anyone would complain about Asian quality when the U.S. is doing so poorly. (Maybe keep the rhetoric down until the 7T bill is paid!) What will happen to the U.S. when China gets out of its rapid growth phase and starts producing quality?
Anyone who wants to read how shaky and tenuous the U.S position as a superpower is should read one of Kevin Phillips latest books. Only 10% of GDP comes from manufacturing now. Scary stuff!
[ link to this | view in thread ]
Re:
[ link to this | view in thread ]
Anyhow, an economy does not need to be based on manufacturing to be solid. The US is a majority service economy, and historically that has worked well. In 50 years we may see much of China move to a service economy when manufacturing shifts somewhere else. I agree there is no need to have an attitude of superiority, but until the corruption in Chinese business and government get reduced to a level where we dont have to worry about Chinese dog food killing our pets, there will always be some skepticism.
(This is from the guy who complained about the Electronical)
[ link to this | view in thread ]
Re: service based economies
No amount of business or government propaganda that asserts the contrary will change that fact.
In this country, we gave manufacturing a low social status, compared to more glamorous fields. Then we kicked manufacturng out of the country, for short term corporate profits. Now manufacturing is done in countries that previously needed our charity.
The day will soon come when we hold out our hand for their charity.
excerpted from copyrighted writings of R. Scheckelhoff, 2006
[ link to this | view in thread ]