Samsung and Sony Dump Legacy PCs

Consolidation is the symptom of a very competitive and mature market. We haven’s seen much consolidation in the legacy PC market except a few mergers. Samsung is dropping PCs in “According to IDC, the global portable PC market will shrink by 4.7 per cent this year to 170 million units, and decline by one per cent on a compound annual growth rate over the next half a decade.”Europe and Sony sold out. The buyers of Sony are not shipping outside Japan. It’s pretty strange to see any OEM dropping a product that sells in millions until you notice the millstone of M$ around their necks. M$’s OEMs are essentially making PCs for $0 and making a living selling M$’s OS for ~$50 a copy. That model worked when M$ had a monopoly but those days are gone.

OEMs should be switching to GNU/Linux to pump up margins. If “the market isn’t there”, they need to do some advertising and hire salesmen and programmers. Samsung did that with smart thingies. Why not with legacy PCs and GNU/Linux? No. This market has been ruined by M$. The world is finally rejecting M$’s offerings and OEMs lack the courage to go their own way. Abandoning the market is not a sound business-plan. There is still a need for desktop IT. There’s no need to accept M$’s taxation.

See Samsung abandons Chromebooks, laptops, PCs in Europe.

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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18 Responses to Samsung and Sony Dump Legacy PCs

  1. Deaf Spy says:

    I would call it naïve to expect markets to stay unchanging to sustain such a growth for so long, dear Mr. Pogson. Usually grown is either exponential and short-lived, or quite more often, natural-logarithmic.

    Well, we have only a couple of months until the end of the year, don’t we?

  2. Deaf Spy, having failed Grade 8 Maths as well as being otherwise handicapped wrote, “Please enlighten me, Mr. Pogson. How do you make such a wonderous extrapolation?”

    Let me review the maths: percentage = amount / base * 100.

    The installed base of legacy PCs in USA of A is hundreds of millions. 1% of that is millions of units. Since it came in a year or so they are selling millions of units per annum while selling just 50 million PCs or so per year, about 5% of that volume. See also, Microsoft and OEMs will continue to cut consumer PC prices, says NPD Group; expect lots of choices in the $199-$249 range for the holidays

  3. Deaf Spy says:

    There, Chromebooks have reached ~1% share in a bit over a year meaning they are getting more than 5% of the market.
    Please enlighten me, Mr. Pogson. How do you make such a wonderous extrapolation?

  4. Deaf Spy says:

    Ohio, did you learn the difference between WMC and Linux KMS? Please do not speak to me until you do so.

  5. oiaohm says:

    wolfgang and Deaf Spy Samsung one of the top 8 chip design/production companies.

    Deaf Spy Acer chromebooks uses Nvidia designed ARM chips that happen to come out of Samsung factories. The reality here is Samsung does not need to ship their own brand product into many markets. Of course there are issues to worry about like network cards and other parts that Samsung has been making for the x86 market. If they will keep on providing Windows drivers if they end up no longer making Windows PCs.

    Now of course it would be worse if foxconn had announced something equal.

  6. dougman says:

    Lets not get overly excited and distract ourselves away from the gist of topic. Which is simply this, “A market once dominated by M$, is non-relevant in today’s age. OEM’s recognize this and dump the desktop and offer mobile solutions, that are not controlled by M$”

    So in essence, M$ is losing increasing mind-share in Europe. People prefer tablets and smartphones, devices that M$ clearly does not dominate.

    Eh.

  7. wolfgang says:

    …strong appetite from businesses for Chromebooks …

    wunderbar!! dougman hear word from Samsung sales guy that “we ain’t dead yet!” and see bitter end for microsoft soon. b2b lets anyone buy anything from anybody for a price except maybe fighter jet or missiles for IS. retail marketers, though, only buy what they think customer want and that is not chromebook in EU most likely. odd ball pc gonzo. market for samsung brand pc not so hot in usa, too.

  8. dougman says:

    LOl….KUKU off the loon again.

    “Samsung does, however, continue to sell tablet and smartphones in Europe. The company’s decision might be a temporary one. In addition, it doesn’t affect other markets around the world.” SO, it IS still selling Chromebook elsewhere.

    “We quickly adapt to market needs and demands. In Europe, we will be discontinuing sales of laptops including Chromebooks for now. This is specific to the region — and is not necessarily reflective of conditions in other markets,” like France.

    http://www.telecompaper.com/news/samsung-to-keep-selling-chromebooks-to-businesses-in-france–1039494

    “there is a strong appetite from businesses for Chromebooks as they complement Android tablets well.”

  9. Deaf Spy wrote, “Samsung considers Chromebooks as PCs, and doesn’t see them as gamechanger.”

    There was a time when all PCs from any OEM sold. The game has changed. Chromebooks are still too small a piece of the market to matter in Europe. It’s different in USA where Chromebooks sell well. There, Chromebooks have reached ~1% share in a bit over a year meaning they are getting more than 5% of the market. It’s a possibility that Samsung’s production capacity has maxed out and they cannot supply both USA/Europe. If they can sell all their production in USA, why not sell only there? Schools in USA are lapping up Chromebooks because they are as easy as thin clients to manage and they are cheap to buy.

  10. Deaf Spy says:

    Pogson: Many Chromebooks run on Intel so they are legacy PCs. ARMed Chromebooks are not. Acer will likely soak up demand for Chromebooks in Europe. They can use the business.

    Irrelevant. Samsung will not sell Chromebooks in Europe. Fact. Which means, Samsung considers Chromebooks as PCs, and doesn’t see them as gamechanger.

  11. kurkosdr says:

    DCIM//thumbnails = DCIM/.thumbnails/

  12. kurkosdr says:

    “the companies that “partnered” with Microsoft and went along with UEFI have found themselves totally squeezed. No margin on the operating system end, and no margin on the hardware which is available directly from real OEMs.”

    The problem is not the partnership with Microsoft. The problem is that they are middlemen that add no value. Foxconn designs and makes the laptops, so they could launch their own laptops and you wouldn’t even notice any difference. Apart from the lack of OEM bloatware like HP wireless assistant of course.

    Which is the reason OEMs like Android so much, despite the fact it needs new drivers for every new version and creates an infinitely growing thumbnail cache which has to be cleared manually (DCIM//thumbnails in case you are wondering). It’s because Android allows them to customize. Differentiate. So they don’t all sell the same product. It doesn’t have to do with license fees (the pay a fee to MS for Android), freedom, open-source-ness (source access for customization could have been done with a no-cost NDA) or any of that.

    Get over it.

  13. Deaf Spy wrote, “Samsung also drop Chromebooks in Europe”.

    Many Chromebooks run on Intel so they are legacy PCs. ARMed Chromebooks are not. Acer will likely soak up demand for Chromebooks in Europe. They can use the business.

  14. Deaf Spy says:

    Pogson, you nicely omit the piece of news that Samsung also drop Chromebooks in Europe.

  15. ram says:

    Alot of these “OEMs” don’t really make anything or at least not very much. Mostly it has been a branding exercise. With motherboards and indeed complete machines available directly from Intel and a few little known genuine OEMs (all of which run Linux), the companies that “partnered” with Microsoft and went along with UEFI have found themselves totally squeezed. No margin on the operating system end, and no margin on the hardware which is available directly from real OEMs.

    Sometimes Microsoft’s “partner OEMs” remind me of the “audiophile cable” companies selling heavily advertised branded wires that functionally one could purchase from many electrical parts suppliers at a few percent of the cost.

  16. dougman wrote, “80% of revenue is derived from 20%. They are focusing on the 20% and leaving the rest behind.”

    OEMs should be going after profit, not revenue. Even if 90% of the profit comes from the high end, what business would decline the other 10% of revenue? If they could increase their profits more than 10% by concentrating on the high end, I could see it but the high end is also competitive, so there’s no certainty. What is certain is that if they ship more PCs and all are profitable they will make more money. They should ship to all sectors. Even Apple has to do that.

    Another way to look at it is as advertising. Even if the low-end units don’t make much money, they are an advertisement, a placeholder in mindshare. The eventual buyers of the high end devices will likely have used a low end device first. That might not be true for passenger liners and the like but it certainly is true for consumers’ gadgets.

  17. oe says:

    opportunity knocks for small OEMto make and ship x86 based laptops and desktops around GNU/Linux and other FOSS OS’es….

  18. dougman says:

    They understand Pareto, 80% of revenue is derived from 20%. They are focusing on the 20% and leaving the rest behind.

    Best comment, “Gone are the days of needing to upgrade every six months to just keep up with the demands of M$”

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