Canalys States The Obvious. Windows Is A Millstone Around OEMs’ Necks

“There has been rapid innovation in the Windows category, as vendors such as HP, Lenovo, Toshiba and Acer have built PCs using a variety of new form factors. These products are struggling to take off as the difference in price between Android and Windows-based tablets remains high. ‘Component pricing has been an issue, particularly with multi-touch screens, though scale economies make this less of an issue as demand increases. The price of Windows itself is a contributing factor and one that Microsoft must address as a matter of urgency. Its PC OEM partners are in an increasingly difficult position and consolidation in the PC market is inevitable within the next 12 months,’ said Tim Coulling, Canalys Senior Analyst.”

see PC market flat in Q2 2013, despite tablet growth.

What can I say? I have been telling OEMs this for more than a year. When a monopolist pushes an OS at a price above the market on OEMs, they suffer. While the monopolist gets a huge cash-flow, the OEM works for nothing, just a tiny margin. While OEMs take a commission on the price of that other OS, they sell their hardware for next to nothing. OEMs are manufacturers, not salesmen for M$. Do framers work for $0 per hour plus a penny per nail? No. Do pilots work for $0 per annum plus a commission on snacks? No. Do surgeons work for $0 per annum plus a commission on sutures? No. They control their own affairs rather than dancing on the strings of a puppet-master. They all choose the products they use in their work rather than let a third party dictate. Perhaps OEMs will listen to Canalys or their own accountants… Using FLOSS is the right way for OEMs to cut cost of production and maximize profits. Car makers and makers of smart thingies know this. What’s wrong with OEMs of legacy PCs?

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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14 Responses to Canalys States The Obvious. Windows Is A Millstone Around OEMs’ Necks

  1. dougman says:

    Are you in the business? Ummm, my website states this…LOL

    Do you sell PCs? Chromebooks? Tablets? Phones? I have in the past, but now I make my clients purchase hardware themselves, sans any markup.

    Are you a program developer? I have created a few Android apps, yes.

    Do you have any degrees or certifications in computer science or even technician class activities? Your questioning is rather stupid, as if, one needs a degree or certification to work in a trade and make money. Did Steve Jobs to Bill Gates have these qualifications, nope.
    http://www.time.com/time/specials/packages/article/0,28804,1988080_1988093_1988082,00.html

    Quit fooling yourself because you are not fooling anyone else. LOL…your the fool and each demeaning, toadie troll-like response proves this.

  2. dougman says:

    Someone in some need of some Mini-Golf, I can see you’re really upset about this. I honestly think you ought to sit down calmly, take a stress pill, and think things over.

  3. bw says:

    Go play some golf and leave IT to people are in the business.

    Are you in the business? Do you sell PCs? Chromebooks? Tablets? Phones? No you do not. Are you a program developer? No you are not. Do you have any degrees or certifications in computer science or even technician class activities? No you do not.

    Quit fooling yourself because you are not fooling anyone else.

  4. dougman says:

    BW, about to blow a head-gasket.

    Go play some golf and leave IT to people are in the business.

  5. bw says:

    I can still see Chromebooks being in the IT market

    “You” can see? lol

    You can’t even set the aspect ratio on your web site banner correctly.

  6. bw says:

    Chromebooks are selling well

    How well is “well”? All of these links, including my own, cite the same claim, namely that chromebooks have captured 20 – 25% of the old netbook market, which was in a deep decline. Again a claim to become the World’s Tallest Midget. The stats on use are more telling, namely that chromebook OS has 0.02% of the web traffic after two years and even Surface RT has .1%, 5 times as much, after only 3 months. Chromebooks are a myth.

  7. dougman says:

    $935 – The average savings in per-device cost of ownership for Chromebook adopters over three years (compared with alternative devices)

    http://static.googleusercontent.com/external_content/untrusted_dlcp/www.google.com/en/us/intl/en/chrome/assets/education/pdf/IDC-WP-Quantifying.the.Economic.Value.of.Chromebooks.for.K-12.Education-042013.pdf

    Surface computers are losers in the market….LOL, and regardless of what the VAR guy MAY say, he does love his Chromebook. In five years from now, I can still see Chromebooks being in the IT market wheres Surface being tossed to the dung heap.

  8. bw wrote, “What does that make Chromebooks? A loser squared? What is the math?”

    Chromebooks are taking off like a rocket. A year ago they were 1% of mobile traffic in Canada. Now they are 4.91%. That’s 490% per annum growth and I don’t see a slowdown any time soon… Growth seems exponential. USA is a bit higher and the world is a bit lower.

  9. Aieee a Ballhogg says:

    Chromebooks are selling well:

    http://www.telegraph.co.uk/technology/google/10173494/Google-Chromebook-sales-soar-in-face-of-PC-decline.html
    http://www.pcmag.com/article2/0,2817,2421744,00.asp

    Further, they are expected to do even better during the rest of the year.

    http://www.thestreet.com/story/11980999/1/chromebook-sales-to-soar-in-second-half.html
    http://www.omgchrome.com/new-chromebooks-lenovo-hp-sales-surge/

    What’s unkown is what portion of those sales are from the low end units and which are from the higher end. While there is a lot of marketing buzz about tablets, it is hard to do serious homework on them. Netbooks work better for that, so expect a lot of back-to-school purchases to be a tidy $199 Chromebook.

  10. bw says:

    The change is already starting on the low end with the arrival of the Chromebooks. To compete there the other OEMs will also have to move to GNU/Linux or Android/Linux

    Big deal. One of the industry trade press mavens who ran right out and bought one and loves it to death has noted:

    “Sounds impressive. But nobody is really saying how many Chromebook units are shipping and in use. Perhaps the best data comes from NetMarketShare, which in April 2013 estimated that web traffic from Chromebooks was roughly 2/100 of 1 percent. Or as ZDNet estimated in early 2013, Chromebooks two years after launch had a smaller percentage of usage than Windows RT earned as of January 2013, after only three months of RT on the market”

    http://thevarguy.com/business-smartphone-and-tablet-technology-solutions/google-chromebooks-sales-grow-how-much

    Remember, too, how much you all despise Surface RT and are so sure it is a loser. What does that make Chromebooks? A loser squared? What is the math?

  11. Agent_Smith says:

    Don’t forget HP Slate 21
    http://asia.cnet.com/hp-slate-21-aio-is-a-21-inch-android-tablet-62221673.htm

    This one could be a deal breaker.

  12. dougman says:

    Chromebooks will be the next thing to keep up with, once offline packaged apps becomes a force to reckon with.

    http://blog.chromium.org/2013/05/preview-new-chrome-packaged-apps.html

  13. Aieee a Ballhogg wrote, “There all it will take is one single big name OEM offering a solid Linux option, either GNU or Android, and daring to market it and the others will have to follow suit to keep up.”

    Samsung, apparently, is working on making Tizen run everywhere

    Competition is good, even on FLOSS. Samsung wants more independence from Google. This is what comes of over dependence on in-house development by Google, instead of sharing the development of the project rather than just its output. It must be amazing to believers in M$ being the one true way to see competition thriving. They haven’t seen real competition in the OS markets for 2 decades. Samsung appears to be hiring tens of thousands of Linux programmers… That suggests Samsung will try to do more in-house of its own. Licensing is complex for Tizen. see also http://www.tizen.org

  14. Aieee a Ballhogg says:

    The change is already starting on the low end with the arrival of the Chromebooks. To compete there the other OEMs will also have to move to GNU/Linux or Android/Linux. Once that happens, the desire for higher margins will cause it to creep higher and higher in the class of hardware offered until it gets the whole notebook market.

    At the same time, there looks like there is potential on the high end with projects like this one:
    http://www.zdnet.com/building-the-open-source-laptop-how-one-engineer-turned-the-geek-fantasy-to-reality-7000018987/
    which may or may not be realized. But a real example from the high end here and now is the Chromebook Pixel. So M$ is being eaten from both ends at the same time.

    Some of that is going to bleed over into the regular desktop market. There all it will take is one single big name OEM offering a solid Linux option, either GNU or Android, and daring to market it and the others will have to follow suit to keep up.

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