Margins of OEMs

Notebook makers gross margins dip below 5% for 4Q11 says Digitimes. They report that OEMs are squeezed by lower volumes and increased overhead but the real big reason is OEMs are squeezed by Wintel. People want small cheap computers and are no longer willing to pay the Intel Inside premium and the premium for that other OS. It’s time OEMs used GNU/Linux, preferably on ARM so they can give consumers better price/performance. OEMs could probably decrease their hardware costs $50 by switching to ARM and software costs $50 by switching to GNU/Linux, which would multiply their margins at current prices to consumers.

No doubt OEMs fear they would lose volume in such a switch but there’s no evidence of that in the current market. Android/Linux sells well and consumers don’t care about the OS. If OEMs got together and switched to GNU/Linux on ARM they would not have to fear losing volume at all. No doubt, M$ would consider such action “anti-competitive” but that is exactly what M$ did to the market many years ago and no one batted an eye. They called it a “platform” and it was OK. Switching platforms is OK. That’s just technology evolving, like switching from horses to internal combustion engines.

For sure, if OEMs switched to GNU/Linux on ARM retailers would and the bottleneck on GNU/Linux adoption would vanish. M$’s release of that other OS on ARM is all the blessing of ARM that OEMs should require. ARM is OK. Go for it. So’s GNU/Linux. I recommend Debian GNU/Linux if you want to give it a try.

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 Margins of OEMs

  1. oe says:

    Funny how the “Intel Inside” and “Designed For Windows” both have these stickers, nice to scrape those off.

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