Dell and HP! Your Folly Is Not Clinging To Consumer PC business But M$

Two of the biggest OEMs of PCs have buried their heads in the sands of Wintel so far they don’t see the real problem, that M$ is raking off the profits, leaving them with tiny margins.
“Dell clings to the consumer PC business in the name of the bring your own device movement, but the operating profits are just north of nil. HP is defending its No. 1 spot, but the profit and revenue lines are headed in the wrong direction.”

see Dell, HP and the folly of the consumer PC business.

Say, a typical notebook costs ~$200 to build, M$ charges $50 for its OS, the OEM charges an additional $50 for the OS and the retail price is $350. That means the entire supply chain from parts to retail gets a shot at a margin of ~$100 but the OEMs end up with $10-$20 for doing all the work of making the machines. M$ gets $50 simply for giving permission to make a copy, something that should cost ~$5 at most. Now that competition is thriving, the consumer is getting a reasonable deal compared to a few years ago, yet M$ has taken almost none of the cuts in prices due to Moore’s Law and the evolution of electronics. They are getting more per copy than they were when they sold only a few million licences per year.

Dell and HP! The solution to your problem is to ditch M$. Cut out that unnecessary $100 from your price and replace it with $75 of your margin by shipping GNU/Linux and Android/Linux. Problem solved. Your margin increases four-fold and your volume increases because the cost to the consumer drops $25. You could increase volume further by cutting prices as necessary. That’s the way the market should work, you being in control of your destiny, not M$. M$ is going down in flames because volumes are dropping and you can’t do anything about it. Making PCs thinner or with prettier colours or smelling better is not going to reverse the damage M$ has done to the PC business with its complexity, top-down nonsense, malware, re-re-reboots etc. Look at M$. They want you to raise the price of your product in order to hide their inefficiency. That’s nonsense. Get out from under that weight and survive. You don’t owe M$ a living. You can do better without them.

About Robert Pogson

I am a retired teacher in Canada. I taught in the subject areas where I have worked for almost forty years: maths, physics, chemistry and computers. I love hunting, fishing, picking berries and mushrooms, too.
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One Response to Dell and HP! Your Folly Is Not Clinging To Consumer PC business But M$

  1. dougman says:

    At least HP is soon to be offering a large desktop Android: http://www.engadget.com/2013/06/24/hp-launches-slate-21-aio/

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