White box market share

There has been some discussion here lately as to how much PC market
share is divided between Dell, HPaq, and white boxes.

Now both Dell and HPaq are in the business of selling white boxes:

http://www.theinquirer.net/?article=12637

Can someone tell me if a Dell white box sale (or HPaq) is credited to
Dell's market share or the "white box" market share? Or to both, in
which case the total market share will exceed 100%, which should make
lotsa marketers happy.

On Thu, 13 Nov 2003 18:39:31 GMT, "Felger Carbon"
wrote:

There has been some discussion here lately as to how much PC market
share is divided between Dell, HPaq, and white boxes.

Now both Dell and HPaq are in the business of selling white boxes:

http://www.theinquirer.net/?article=12637


"One of the problems is that the small resellers and assemblers may be
able to buy the components and cases themselves at far cheaper prices
than HP can offer, making the whole idea somewhat redundant."

I once saw a diagram of HP's process for new product approval. As I
recall, it was a circle of a dozen or more icons, interconnected in
every possible way. I wonder if this particular brainstorm passed
through such a process?

RM

"Felger Carbon" wrote in message
news
There has been some discussion here lately as to how much PC market
share is divided between Dell, HPaq, and white boxes.

Now both Dell and HPaq are in the business of selling white boxes:

http://www.theinquirer.net/?article=12637

Can someone tell me if a Dell white box sale (or HPaq) is credited to
Dell's market share or the "white box" market share? Or to both, in
which case the total market share will exceed 100%, which should make
lotsa marketers happy.

You're kidding, you mean HP is trying this same thing too? Dell started this
about a year or so back, trying to pass off unbranded Dell boxes as
whiteboxes. The standard response from most retailers ranged from
indifference to derision, nobody thinks either of these guys can create a
system at the proper price points that a real whitebox can achieve. Just
because the box is white, doesn't make it a whitebox.

Yousuf Khan

"Yousuf Khan" wrote in
message . rogers.com...

You're kidding, you mean HP is trying this same thing too? Dell
started this
about a year or so back, trying to pass off unbranded Dell boxes as
whiteboxes. The standard response from most retailers ranged from
indifference to derision, nobody thinks either of these guys can
create a
system at the proper price points that a real whitebox can achieve.
Just
because the box is white, doesn't make it a whitebox.

Yousuf, let me continue my role as devil's advocate:

Any "white box" manufacturer has to make sure that the disparate
elements he assembles are compatible. The mobo has to be compatible
with the drivers and the boards - video etc - that're plugged into the
mobo. The case has to have a proper power supply and adequate cooling.
Assuring these things takes time, money, and expertise.

By buying "white boxes" from Dell or HPaq, all of this research and
development has been done, and is included in the white box price tag.
A small local store with no time, money, or expertise can sell white
boxes that actually work.

This continues my theme that R&D is best kicked upstream as far as
possible. It's inefficient for thousands of retail outlets to perform
this R&D thousands of times, individually. I know you and Robert Myers
disagree with this. I'll continue to provide factual evidence that
supports my point of view. For better or worse .

On Thu, 13 Nov 2003 18:39:31 GMT, "Felger Carbon"
wrote:
There has been some discussion here lately as to how much PC market
share is divided between Dell, HPaq, and white boxes.

Now both Dell and HPaq are in the business of selling white boxes:

Am I the only one who TOTALLY doesn't understand this move? I mean,
the very reason why customers chose white box systems over buying an
HP or a Dell is because they can get the system customized
specifically for their needs with local support. These systems aren't
customizable, and if the store needs to support it locally, then why
bother paying the premium to get the parts from HPaq or Dell?

I just can't picture this as being at all beneficial for retailers.

http://www.theinquirer.net/?article=12637

Can someone tell me if a Dell white box sale (or HPaq) is credited to
Dell's market share or the "white box" market share? Or to both, in
which case the total market share will exceed 100%, which should make
lotsa marketers happy.

It'll probably depend on who you ask, just like with current numbers.
The two main groups that count PC sales now (IDC and Gartner) already
use very different methods and come up with rather different numbers
as it is.

-------------
Tony Hill
hilla underscore 20 at yahoo dot ca

On Fri, 14 Nov 2003 00:26:01 GMT, "Felger Carbon"
wrote:

It's inefficient for thousands of retail outlets to perform
this R&D thousands of times, individually.

It may be inefficient, but it means that the person talking to you at
the counter actually has some familiarity with the hardware. It is no
more or less efficient than sending auto mechanics to school to learn
how to fix your car. Intel offers classes for OEM's just the way GM
offers classes for car dealers.

If you wanted what you could buy at CompUSA, you could just go to
CompUSA. At CompUSA, you are dealing with a sales clerk. At Dell,
you are dealing with someone who reads from an online database. At a
white box vendor, you are dealing with a stakeholder and a
decisionmaker.

RM

"Felger Carbon" wrote in message
link.net...
Any "white box" manufacturer has to make sure that the disparate
elements he assembles are compatible. The mobo has to be compatible
with the drivers and the boards - video etc - that're plugged into the
mobo. The case has to have a proper power supply and adequate cooling.
Assuring these things takes time, money, and expertise.

How much time and money do you think this "R&D" actually takes? Exceedingly
little for a local store. Usually, they throw the boxes together with
"known" quantities, such as they usually put their own favourite video
cards, favourite motherboards, processors, etc., that they themselves are
familiar with. They'll occassionally do a custom job, where a customer
requests a slightly different peripheral than what they've used before and
once they have that little bit of experience with it, then they now have a
new known quantity.

Even when they are selling to businesses and government offices, they are
usually going with very conservative rules of thumb.

By buying "white boxes" from Dell or HPaq, all of this research and
development has been done, and is included in the white box price tag.
A small local store with no time, money, or expertise can sell white
boxes that actually work.

I suspect Dell or HP aren't even targeting those types of white box sales.
They are targeting the "minor" OEM, who is selling a few hundred boxes to a
government department. Perhaps they can create a few hundred of these in
their own factories quite quickly compared to the minor OEM. But I don't
think even minor OEMs would buy from these guys, they'd know better than to
accept a contract for more machines than they themselves can build.

This continues my theme that R&D is best kicked upstream as far as
possible. It's inefficient for thousands of retail outlets to perform
this R&D thousands of times, individually. I know you and Robert Myers
disagree with this. I'll continue to provide factual evidence that
supports my point of view. For better or worse .

Sort of like the way Dell kicked their R&D upstairs?

Yousuf Khan

"Yousuf Khan" wrote in
message . rogers.com...

How much time and money do you think this "R&D" actually takes?
Exceedingly
little for a local store. Usually, they throw the boxes together with
"known" quantities, such as they usually put their own favourite video
cards, favourite motherboards, processors, etc., that they themselves are
familiar with. They'll occassionally do a custom job, where a customer
requests a slightly different peripheral than what they've used before and
once they have that little bit of experience with it, then they now have a
new known quantity.

I can tell you have never actually done this. I have - and you are wrong.
If you do what you suggest, you are going to have a support nightmare.

I used to buy from a few suppliers who also built whitebox systems. They
would spend at least two months designing/building/testing before they would
sell a new product. Those that didn't went away in the business real
fast...


Even when they are selling to businesses and government offices, they are
usually going with very conservative rules of thumb.

Are you speaking from experience, or from whatever orifice happens to be
available at the time?


Sort of like the way Dell kicked their R&D upstairs?

Exactly. Just like the motherboard makers kicked most of their R&D
upstairs, both in board design/layout and BIOS design. Funny how it works
that way, even when you don't realize it...

Regards,
Dean



Yousuf Khan

"Tony Hill" wrote in message
.com...
On Thu, 13 Nov 2003 18:39:31 GMT, "Felger Carbon"
wrote:
There has been some discussion here lately as to how much PC market
share is divided between Dell, HPaq, and white boxes.

Now both Dell and HPaq are in the business of selling white boxes:

Am I the only one who TOTALLY doesn't understand this move? I mean,
the very reason why customers chose white box systems over buying an
HP or a Dell is because they can get the system customized
specifically for their needs with local support. These systems aren't
customizable, and if the store needs to support it locally, then why
bother paying the premium to get the parts from HPaq or Dell?

I just can't picture this as being at all beneficial for retailers.

It's beneficial because known-good (compatible) systems can be offered
to the customer for a lower price. The entire point of kicking the R&D
upstairs is to save money for the customer. If R&D is performed
thousands of times instead of just once, the market is gonna be
inefficient and prices are gonna go up. Dell is making just ~6% of
sales in profits... with Dell's massive purchasing power. White box
manufacturers _cannot_ produce the same product at lower than Dell
prices after amortizing their R&D.

This appears to be a polarizing issue on this NG. Why do so few seem
interested in low prices to the consumer for something that works?

"Dean Kent" wrote in message
news
I can tell you have never actually done this. I have - and you are wrong.
If you do what you suggest, you are going to have a support nightmare.

I used to buy from a few suppliers who also built whitebox systems. They
would spend at least two months designing/building/testing before they
would
sell a new product. Those that didn't went away in the business real
fast...

Depends on who they're selling to. Home and SOHO whitebox PCs are usually
designed that way. Usually the latest hardware is what is needed to get
customers through the doors. There is no way they can sit there for two
months testing this stuff -- most of the stuff they tested would've been
obsolete by then.

Corporate desktop and server whiteboxes are another story. Those do require
lots of testing prior to sales, but that is basically what is expected for
the corporate market. Just as quick turn-around and the latest hardware is
what is expected of home/SOHO whiteboxes.

Even when they are selling to businesses and government offices, they
are
usually going with very conservative rules of thumb.

Are you speaking from experience, or from whatever orifice happens to be
available at the time?

What do you expect me to be speaking this through your orifices somehow?

Yousuf Khan