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HP Regains Throne as Top PC Maker 134

Posted by Zonk
from the get-your-red-hot-desktop dept.
Nick writes "HP is once again the leading PC manufacturer." From the article: "HP has snatched the PC crown from Dell's barely coherent clutches. It has taken HP close to three years to once again lead the market in worldwide PC sales. Under CEO Carly Fiorina and post Compaq, the company largely gave up on the tit-for-tat struggle with Dell for the PC top spot that had been so important to it over the years. Now it has reclaimed the #1 slot during the third quarter on the back of Dell's self-destruction. Overall, worldwide PC shipments hit 59.1m units in the third quarter - a 7 per cent rise from the same period last year, according to new data from Gartner. The US PC market, however, dipped 2 per cent, marking its first fall since mid-2002. Dell is particularly exposed to the US PC market, and it showed." Update: 10/20 16:37 GMT by Z : Switched link to a more current story.
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HP Regains Throne as Top PC Maker

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  • by Anonymous Coward on Friday October 20, 2006 @11:40AM (#16516895)
    Now that everyone knows that HP-hired goons will go through your garbage, sit outside your house, and take pictures of you & your family...it seems everybody thinks HP is great!
    I look forward to Sony, Microsoft, and SCO trying this next...
  • 4 year old article (Score:5, Insightful)

    by e1618978 (598967) on Friday October 20, 2006 @11:42AM (#16516937)
    Published: January 16, 2003, 4:49 PM PST Zonk is one of those "special" article submitters, I take it?
  • About time (Score:5, Interesting)

    by Salvance (1014001) on Friday October 20, 2006 @11:42AM (#16516949) Homepage Journal
    It's good to see HP getting results from the vast improvement in PC quality, pricing, and service. My company used to solely buy Dell's, but lately have become frustrated by the 'here today gone tomorrow' pricing. It's annoying for a small business purchasing manager to go into Dell's Home PC section and find the same PC as the Small Business section for $100 less one day, and $100 more the next. Come on Dell, stop playing games with us.
  • What gives?
  • I have it on good authority it won't last long. With the introduction of AMD based products and new factories being built in North Carolina, new Europe, India, and China, Dell will take the lead back in the next couple of quarters.
    • ...built in North Carolina, new Europe...

      Is that the 'new Europe' Grand Moff Rumsfeld set up to compete with 'old Europe' in the hope the former will eventually replace the latter?
    • If they don't do something about customer service at Dell then my money would be on HP to stay in the lead.
      I have five newer Dell systems at home and at this time I wouldn't buy a keyboard from them due to my recent
      experience with Dell customer service. I spent five grand to get insulted by a condescending customer service staff.
      No thank you I will pay more for better service.
      • by dan828 (753380)
        Do you think HP is any better? I recently had a multi-month multi-return-for-repair laptop issue with HP. USB ports quit working, sent it in for repair after speaking to Indian customer service for two hours. It takes 6 weeks for the laptop to come back, and the USB ports are still not working. Another two hours with Indian tech support, laptop again goes in to service, 2 weeks later the laptop comes back with incorrect motherboard in it so that the USB ports don't line up with the case, just a couple o
    • by rubycodez (864176)
      Pfffft, HP sells AMD based products too, server and desktop. Do you think Dell has some secret way of making them much cheap than HP, or a new plan for better service? Do tell.
  • by xxxJonBoyxxx (565205) on Friday October 20, 2006 @11:44AM (#16516981)
    This is reminiscent of the first time HP emerged as the leader, through its merger with Compaq.
    How so? The merger combined the sales of two major companies. This time, HP is smacking Dell around like a little bitch with organic growth.
    • Re: (Score:2, Interesting)

      by Anonymous Coward
      The article only says "worldwide" growth, if you read between the lines. Dell is still #1 in the US. Dell has admitted to being behind "world wide", which is actually one of the few good things to its credit. You don't greatly increase your world wide sales in India, for example, without a fair amount of job exports to go with it. That's changing of course, but Dell is admittedly behind, and it's employees (below director level), are generally happy about it. Contrary to popular belief, a substantial amount
      • by khallow (566160)

        Obviously in a year with slow US growth, Dell is going to underperform. The question we should be asking, is why is US growth so low, and how can we fix it. Perhaps because US citizens are still not sure about their job stability and future in the face of a complete absence of morality on wall street.

        How about market saturation? A place like India has a lot of people getting their first computer. In the US, the market is mostly people getting yet another computer.
    • Re: (Score:3, Funny)

      by asuffield (111848)
      This time, HP is smacking Dell around like a little bitch with organic growth.


      I think it's more likely that customers are deserting Dell (because their hardware is no unreliable that it causes small children to have nightmares and sysadmins to have psychotic, nightmare-inducing rampages) and HP just happened to be the next one down the list, so any reduction in Dell's sales will cause HP to become #1.
      • Re: (Score:3, Insightful)

        by Billly Gates (198444)
        HP is also going up in quality too since Carly left. In 2003 I would not touch a Compaq or HP, but now the RMA's are the lowest for compaq pressario laptops and HP Pavilians at the local bestbuy store. Its a big change.

        Also people who are neopyhtes buy HP products because of the commericals they see on TV. THey just want a pc to do work and showing what the pc can do and including great software for graphics makes their life easier. ITs not like they can go just buy a Dell. They would need to know the numbe
  • by pandrijeczko (588093) on Friday October 20, 2006 @11:45AM (#16516991)
    I've no great love or hate for either Dell or HP but it should be remembered that HP poached away Randy Mott, a top Dell sales exec, a year or two ago.

    This is just the results of dirty back-handed wheeling-and-dealing committed by all corporations and is probably nothing to be particularly proud of.

    • Re: (Score:2, Insightful)

      by Anonymous Coward
      This is just the results of dirty back-handed wheeling-and-dealing committed by all corporations and is probably nothing to be particularly proud of.

      Kind of, it's just Dell's turn to think they are IBM, and folk buy their machines because of the brand name, or their legendary support. "If we increase our margins, and outsource all our support to India, customers will keep buying our stuff, right?" Wrong.
      • Re: (Score:3, Insightful)

        They are actually outsourcing engineering to India, I believe in an effort to chase HP. Some races should be lost.
    • by x-vere (956928)
      HP: Hey Randy, we'll pay you 25% more and give you a company sports car and corner office if you leave Dell and work for us.
      Randy: Hmmm... I don't know. I'm such a loyal Dell employee.
      HP: Fine, we'll give you a hot secretary and blinds for your office.
      Randy: I'm in!

      Yes, horrible wheeling and dealing. How about offer a good employee what he is worth to you and see if he bites.
    • Re: (Score:2, Interesting)

      by PowerEdge (648673)
      This is wrong. Randy Mott was the CIO (Chief Information Officer) not a Sales Exec. Further, Dell poached him from Wal-Mart which probably has one of the most impressive IT systems in the world.
  • by MollyB (162595) on Friday October 20, 2006 @11:45AM (#16516997) Journal
    Am using a Dell 233Mz w/ 64Mb RAM, 4 Gb SCSI disk running NT 4.0, service pack 6a. Has HP got anything that can beat that? I hate to get stuck on the upgrade treadmill, as you might notice...

    Firefox, Notepad, & Popcorn are all I mostly use, anyhow.
    • Re: (Score:1, Flamebait)

      by garcia (6573)
      Has HP got anything that can beat that?

      No. What they do have is cheap and I'm not talking price.
    • Re: (Score:3, Insightful)

      by Technician (215283)
      I hate to get stuck on the upgrade treadmill, as you might notice...

      Upgrade only if you have a compelling reason. If it works fine on your dial up connection for reading Slashdot, then there is no reason to upgrade. However if you want to play trackmania while talking on Skype on a broadband connection, then you might want to look into an upgrade.
  • De Ja Vue? (Score:2, Funny)

    by matr0x_x (919985)
    Or is history actually repeating itself...
  • So what? (Score:4, Insightful)

    by wombatmobile (623057) on Friday October 20, 2006 @11:49AM (#16517079)

    HP doesn't make significant profit selling PCs.

    It hardly sets any technology standards - those are all set by the rest of the industry.

    If Dell is #1 next month, so what?

    The vendor making all the money in the PC business is still...

    that same company from Washington state.

    • Re:So what? (Score:4, Insightful)

      by truthsearch (249536) on Friday October 20, 2006 @11:54AM (#16517165) Homepage Journal
      Really? Apple profits are up 27% on a 30% increase in Mac sales. And they're not in Washington.
      • Re: (Score:3, Informative)

        by businessnerd (1009815)
        Actually the parent is right. The PC market has become commoditized to the point where PC manufacturers are making very little profit per unit. Apple is kind of an exception. While they are a PC manufacturer in the sense that Macs are "Personal Computers", but they are a niche market, high end hardware with an alternate OS. Becaue they are a niche, they can charge a premium for their product. They are the only game in town if you want OS X. Apple is more of a home computer company, not too many server
        • by rahrens (939941)
          You may want to rethink that "niche" comment - their market share just blasted past the 5% mark straight up to 6.1%. Not bad for a niche company, huh? ...maybe the niche will just grow until it displaces a larger share of the rest of the market?
    • The vendor making all the money in the PC business is still...

      The ink industry has been good to them. It's a PC product isn't it? They also make some printers, but the real money is in the ink.
  • The article "Published: January 16, 2003, 4:49 PM PST" is talking about figures from 2002, and how the industry has recoverd since then. Not new news.
  • by scoser (780371) on Friday October 20, 2006 @11:51AM (#16517107) Journal
    Wow...Zonk, which drugs are you taking, and where did you get them?
  • by fruey (563914) on Friday October 20, 2006 @11:53AM (#16517145) Homepage Journal
    Posts have been submitted from the past directly to today's Slashdot homepage.

    As part of an experiment, Zonk set a number of stories in January 2003 while the idea of giving subscribers access to stories before the unwashed masses. Indeed, this story was seen by beta subscribers in 2003 and has suddenly re-appeared after a quantum mishap involving Cowboy Neal zapped a few posts from the database.

    Today, they're showing back up as a new singularity in Cowboy Neal's SQL-Optimising-Time-Compressor caused bits originally lost in 2003 to show up in their original state three and a half years later.
  • by jmichaelg (148257) on Friday October 20, 2006 @11:54AM (#16517169) Journal
    Four years ago, I purchased a Dell laptop for my son when he went off to college. It lasted all of a year before the hard drive died. After quite a bit of trouble with customer service reading scripts in Indiglish we finally got an RMA. The machine worked for about two weeks after it was returned and then developed some unrelated problem. Rather than waste another 4 hours on un-intelligible tech support, I bought my son another computer from a different manufacturer. It's worked flawlessly for the past 3 years.

    Judging from what I read on the net while I was researching my son's second problem, I don't think my experience with poor quality product and poor quality tech support from Dell is unique.

    There's a limit to cost cutting - go too far and you destroy the reason people initially bought from you. In my case, it'll be a long time before I ever buy another Dell. In the past 4 years, that's 3 computers Dell hasn't sold me.
    • Re: (Score:1, Funny)

      by A.Chwunbee (838021)
      After quite a bit of trouble with customer service reading scripts in Indiglish
      Sahib, let me tell you that I am wery much ressembling that remark.
      • Sahib, let me tell you that I am wery much ressembling that remark
        -- A.Chwunbee
        Marked down to -1? When a guy with an Indian surname says this, it's funny as it was intended to be.
    • All their recent espionage aside, I have bought 2 HP computers over the years (desktop about 5 years ago, laptop last year). I am very pleased with the quality, but 2 does not make a very good sample. Does anyone have opinions on the quality of the machines themselves?
      • Re: (Score:3, Insightful)

        by LunaticTippy (872397)
        I've installed about a dozen HP desktop PCs in the past 3 years, and probably 30 Dells, as well as 20 HP servers. Problems have been few with both manufacturers. I don't really put much faith in brand x = quality value y. It's all made in China. Both have been pretty good about ease of getting inside the box and getting to slots, drives, etc. That used to drive me crazy about OEM machines. Compaq was the absolute worst.

        I'd say HP machines have given me less problems, but not a lot less. Support is a
        • Seconded. I've worked in exclusively Dell and exclusively HP shops before, and each has had their ups and downs. Dells had problems with motherboard capacitors in their GX270s and GX280s, and a rash of motherboard failures in their Precision 370s. HP had great machines in the Vectra VL6 and VL7, but had random sound chip failures in their VLi8s (although I just retired my wife's VLi8, with no problems in 6+ years.) For business desktops, I've recently been buying the HP dc5100 desktops, and they've been
        • Re: (Score:3, Insightful)

          by evilviper (135110)
          I don't really put much faith in brand x = quality value y. It's all made in China.

          PCChips is made in China, and so is Gigabyte... Are you going to tell me they have the same quality, because they're made in the same country?
          • When I'm considering two systems with the same specs and warranty, I'll usually choose the cheaper one. I've had "quality" brands die young and a Packard Bell that is still running. If a maker has consistent quality problems I'll stop considering them, but components vary so greatly even within the same model it is foolish to think you're getting guaranteed quality with a certain brand.

            There are a couple of areas I won't risk low quality: memory and optical media. It's all made in China, often the same
    • I'm about in the same place with Apple. My wife's old iBook G3-600 was in the shop four times under warranty, and she's had to replace the power adapter three times, with the current adapter being a third-party model that is *much* sturdier (and way cheaper) than the crap Apple shipped with the iBook. Against my better judgement, I bought her a new 2GHz MacBook (she much prefers OS X to Windows), and I've yet to get that machine to a usable state. Random shutdowns that resetting the PRAM/PMU won't fix, a
      • by peragrin (659227) on Friday October 20, 2006 @12:34PM (#16517693)
        Just for the record, never buy a first generation apple. I will wait till they do a complete line update on the macbooks before buying one. Every new design has bugs. Even from Apple. But the story is always revision a models tend to need more TLC(with /without a hammer) than later versions.

        My 12" powerbook G4 acted up once. I finially figured out that several of the fonts had gotten corrupted on the HD, ncreasing their size by an order of magnitude.(yea 3 gigs of fonts when it's supposed to be less than 200 megs) and it was doing random things to the OS. I was upgrading to 10.4 at the time so I wasn't too upset. But I also waited until the second or third revision came through of the hardware.

        Personally I would deal with it for a couple more months and upgrade to the "new" macbooks when they come out in a few more months. Then sell the old one on ebay for as much as you can.

        there is a sucker out there who wll pay you good money and at least underwrite part of the replacement costs.
        • Personally I would deal with it for a couple more months and upgrade to the "new" macbooks when they come out in a few more months.

          I refuse to reward Apple with yet another sale after dealing with their shoddy engineering twice now. If I do end up replacing the MacBook, it most assuredly will not be with another Apple.
          • by sunspot42 (455706)
            I refuse to reward Apple with yet another sale after dealing with their shoddy engineering twice now. If I do end up replacing the MacBook, it most assuredly will not be with another Apple.

            Apple's no worse than the rest, and at least their customer service is usually pretty good. I have a coworker who has been thru 4 laptops over the past six months, from Dell, Toshiba and Sony. All junk.

            Dell was the worst of the bunch, though - not only were two machines defective, they were impossible to deal with. The
        • by evilviper (135110)
          Just for the record, never buy a first generation apple.

          Well, the whole "Apple Quality" idea is shot to hell, then.

          Nobody wants to buy from a company that makes good products only if bought on the 2nd Tuesday of months that have the letter "U" in them.

          Just try and tell me that first-generation notebooks from IBM or HP have such horrible problems...
          • by peragrin (659227)
            actually they do. First generation of any line usually has a bug that desn't show up in limited testing but only becomes a problem after it is exposed to thousands of testers. You shouldn't be a brand new model of a brand new car line either. Doesn't matter whether it's a ford, chevy, BMW, or mercedes. They all have little technical errors. Things that the engineers didn't think of or thought would work better than they do.

            real world hardware always has those kinds of bugs.
    • by krell (896769)
      "Rather than waste another 4 hours on un-intelligible tech support, I bought my son another computer from a different manufacturer. It's worked flawlessly for the past 3 years""

      1)Customer looks for tech support number in product manual and literature. No luck.

      2)Customer looks for tech support number on web site. No luck.

      3)Customer finds the support number by looking in the company's domain registration record.

      4)Customer calls number. After being re-routed and bounced and made to call other numbe
    • I have some stats that would actually contradict your situation. I attended a 4 year university in their business school. Part of being in the business school, every student reveived a brand new laptop, and then two years later, you turn it in for another brand new one. When I was a freshment, the school had a deal with HP, and all of us received HP OmniBooks. Everyone complained. They were always causeing problems. The next year, Dell won the bid and now the CIO of the school will not even consider g
    • by DragonHawk (21256) on Friday October 20, 2006 @01:13PM (#16518203) Homepage Journal
      "Four years ago, I purchased a Dell laptop for my son when he went off to college. It lasted all of a year before the hard drive died."

      We've got a fleet of notebooks from Dell, Gateway, and HP. The hard drives in laptops all seem to die much more quickly vs those in desktops. I've always assumed it is due to the increased physical traumua a traveling laptop gets subjected to.

      "After quite a bit of trouble with customer service reading scripts in Indiglish we finally got an RMA. "

      When Dell sells you a computer, they also offer you a choice of service plans. If you go the cheap route, you get the guy in India reading a script in broken English for hours, and mail in service. If you buy the Gold support, you get a native English speaker, 1 minute hold times, and next-business-day, on-site service. Plus Accidental Damage replacement (you drop it, you break it, you get a new one).

      With Dell, you get exactly what you pay for.
      • by soft_guy (534437)
        By the time you pay for the support, you might as well by from someone else who had better support to begin with (and probably a better product).
      • Re: (Score:3, Informative)

        by patryn20 (812091)
        Maybe on the corporate side.....I had a four-year, on-site support for a home desktop that I could never get them to honor. I was actually told by the Indian call-center employee that he could not approve the on-site visit because he would be fired if he did. They were hired to keep costs low, so they were not allowed by their management to do anything that would result in a charge to Dell.

        I didn't pay chump change for that support and over the course of two hard drive failures, sound card death, and eventu
    • Just a note - I have found that yaw'ing is bad for the spindle bearings in hard drives.
      My experience shows that by not moving the laptop while the drive is spinning (regular desktops too) your hard drive will last longer. For a feeling of why, remember those toy gyroscopes you had as a kid ... the resistance the gyroscope gave you to changing the direction of the axis - now envision a 5400rpm gyroscope. Same thing.

      Put the laptop on a hard flat surface.
      Turn on.
      Use.
      Turn off.
      Move laptop.
      Hard drive lasts almo
    • "I don't think my experience with poor quality product and poor quality tech support from Dell is unique."

      Nor is it from any other manufacturer.
  • Time to move on to something else.
  • Err.. (Score:3, Insightful)

    by bberens (965711) on Friday October 20, 2006 @12:17PM (#16517475)
    Calling HP a top PC maker is like calling Wal-Mart the top retailer. Technically it's true, but that doesn't really tell the whole story.
  • ...but when HP says it shipped X value of hardware, that would be to retailers no? Where as Dell sells direct so when they say they shipped Y value that amount has actually been sold.
  • by dpbsmith (263124) on Friday October 20, 2006 @12:24PM (#16517549) Homepage
    ...instead of business news?

    So, HP is now the top PC vendor.

    And this means what? Vista will run in some new, exciting way different from the way it runs on Dells? Interesting new _kinds_ of peripherals will come to market first on HP boxes, the way the Sony 3.5" diskette did?

    Or does it just mean (yawn) that on the right day with the wind behind it, some HP models may offer incrementally more RAM or an incrementally faster processor than the equivalent Dell, especially for corporate purchasing agents purchasing them in quantities of a thousand?

    How long has it been since HP tried anything like NewWave?
    • Interesting new _kinds_ of peripherals will come to market first on HP boxes, the way the Sony 3.5" diskette did?

      To be fair, HP was the first major PC vendor to support Expresscard.

    • by Manchot (847225)
      The HP of today isn't the same as the HP of yesterday. That title now belongs to Agilent, whom they spun off in 1999. Agilent makes all of the important technical products now, leaving HP with PCs.
  • I have worked with both Dell and HP business class solutions. Dell servers suck. I had RAID fail on me numerous times to include both hot spares failing to merge into an array to address a failed drive. In this instance I had to rebuild the entire volume and restore from tape. With Dell workstations lets talk about the GX270 constant issues with power supplies and capacitors going bad. These are known issues with this model yet Dell insists on a one for one swap for each PC. As soon as one PC is fixed and r
    • I have not had a single problem with any of the dell servers that I have worked with. We have dell servers here that have been running for a year plus with not a single hardware problem. I dont have any experience with hp servers but I have experience with compaq servers and they stunk. Also we have hp procurve switches that You cant bring their web interface up on and forget trying to do a vlan on them.
    • by jandrese (485)
      Eh, most rackmountable servers from venders you might buy a home machine from suck. I'm talking IBM, Dell, HP, the whole lot. Dell gets special points for choosing only the loudest possible fans for their machines. A whole rack of them practically requires ear protection to work near.
    • Why is this modded down? Its just this guy's experience iwt them. BTW my college hates Dells and I have seen them fail so much that the techs walk around with a deskette with their proprietary tcp/ip stack. I have never heard of this?
    • by un1xl0ser (575642)
      Pro-Tip: Nobody is going to take you seriously if you admit to having rackmount Maytag washers in your server room.
  • by Anonymous Coward on Friday October 20, 2006 @01:12PM (#16518185)
    HP has IBM to thank for the lead they now have. Since IBM sold off its laptop division to Lenovo, the corporations ran for cover. I know my own company stopped buying Thinkpads, and now buys HPs... The corporate types want to buy from the biggest, most reliable vendor. For many that was IBM, but Lenovo didn't fit their bill, and I'm hearing a lot of them went with HP over Dell. It is an indictment of Dell and Lenovo more than a vote of confidence for HP.
  • by Revenge_of_Solver_Ta (862178) on Friday October 20, 2006 @01:18PM (#16518271) Homepage
    Oh come on! Everyone who has ever bought a Dell product knows the difference lies in their customer service...

    "Hello these ees 'Dan'...may I be of knowing and becoming on the eashew?"
  • Ahem... (Score:3, Interesting)

    by djupedal (584558) on Friday October 20, 2006 @01:36PM (#16518507)
    I told you, Dell is a one-trick pony.

    Dell's penchant for hollowing out suppliers is just one of the 'thin-line' tactics that finally knocked the company off. No one wants their business these days and they certainly can't compete in the current growth markets.

    Don't expect Dell to ever regain from this...going down, down, down.

    Good riddance to bad rubbish!
  • But servers and devices too. I finally got fed up enough with Dell with the apparent inferior machines, high prices, and poor technical support.

    But we recently had need of a server to use for RSnapshot, and Dell wanted too much money so we hit up HP. Got a hell of a deal on a server with 2TB of disk space. Now if they'd just ship the damned thing.
    • by Kludge (13653)
      Got a hell of a deal on a server with 2TB of disk space. Now if they'd just ship the damned thing.

      So you're saying they give you good deals selling you things that they don't have. No wonder they've passed Dell in sales!

      • by kilodelta (843627)
        Yep - the 500GB drives were backordered. I still have yet to check my work email because they were supposed to send me tracking info today.
  • by blacktalonz (1007979) on Friday October 20, 2006 @02:26PM (#16519275)
    I think Michael Dell should close the doors and return the money to the investors.
  • by ahg (134088) on Friday October 20, 2006 @04:21PM (#16520877)
    I recently purchased a couple Compaq Presario Computers Model SR1710NX and SR1910NX (I needed basic computers and wasn't looking to spend a lot.) For the price, I was impressed. They used many of the same component suppliers I would if I was building my own box:

                          Motherboard: Manufactured by Asus with open PCIe slot.
                            Hard Drive: Seagate SATA drive (SR1910NX, I forget what was in the SR1710NX)

    Sure, they're not exactly a full featured systems but I can add to them when I find good deals on stuff I want to upgrade. Quality components, no generic motherboard and no cheaper Maxtor drive, that I would have likley seen from the Compaq of the past in their Presario line. The SR1710NX has been use since Feb, and so far no problems. (Of course I had to get rid of a lot of crap that they pre-install... but all the consumer retail systems come with that)

    I now recommend the Compaq systems with Asus boards (you can research that on their website) for friends and family. Figure it's a better bet than a cheap Dell these days. (As for support - my friends and family end up calling me anyway.. so I have no idea how good that is)

     
  • by sunspot42 (455706) on Friday October 20, 2006 @05:01PM (#16521551)
    One of the reasons why HP is cleaning up in the home computer and small business market vs. Dell is because of their physical presence in the local retail channel. Dell is a pure Internet mail order play, with no local retail presence. That was great 5 years ago, when Dell's rivals were bloated, smaller operations who had to maintain a retail marketing and distribution structure that handled dozens of major retailers, in addition to their corporate sales and Internet sales structures. Dell could shave a substantial percentage off the price of each PC as a result, which at the time added up to a couple hundred dollars per-PC, back when the average PC cost around $2000. Dell had no real R&D to speak of either, unlike its competitors - they were free to focus solely on lowering component and assembly costs, using stock standard designs provided by Intel.

    Fast forward to 2006 though and the picture isn't so rosy for Dell. The average inflation-adjusted price of a new PC is probably closer to $1000 today. The shipping costs alone can add 5% or more to the cost of a PC, not to mention the added hassle if there's a problem and you need to return it. So Dell's mail order model has become something of a disadvantage. Everybody has implemented the kind of component and assembly optimization Dell pioneered, and they're all just putting together kits of standardized equipment supplied by the same handful of vendors - Intel, nVidia, ATI, etc., so Dell gains no traction there. The standard $1000 PC comes with so many built-in features there's little demand for the kind of customization that once set Dell apart.

    On the cost side, Carly butchered HP's workforce, so a lot of the old R&D overhead is gone, and HP has the combined retail channel of both the old HP and Compaq, plus all of their old corporate accounts. There are fewer retail players to deal with as well, lowering HP's costs even more, and HP's size gives them more leverage to push retailers around with. In this new environment, HP is poised to beat Dell at their own game.

    The only problem is, this has turned into an extremely low-margin game for all of the players. HP makes a lot of revenue off the PC market, but their margins are all in corporate hardware and services and of course in printer ink that costs more per-ounce than gold. Beyond that, they're now a hollowed-out shell, living off of support for legacy products designed and frequently sold a decade ago. Corporate hardware is slowly marching down the commoditization path as well, though it's probably 5-10 years behind the kind of margin erosion we've seen in the PC space.

    IBM saw what was coming and bailed on the PC market a couple of years ago, retreating entirely to the corporate space. HP bet the company on beating Dell, and while it looks like they may in fact pull that feat off, my guess it's going to be a pyrrhic victory. I think the PC market isn't going to be worth diddlysquat in a couple of years. Apple is rapidly carving out a big niche for itself in the only remaining retail segment that's profitable - the high end. That leaves everybody else - Lenovo, HP, Dell, Toshiba, Sony, Gateway - to squabble over the low margin to no margin mid and low end of the market. I think it's only a matter of time before most of them are squeezed out, leaving probably just Lenovo and either Dell or HP standing.

    Which of those two ultimately wins out probably depends upon when the Chinese enter the printer market and begin to consume market share from HP. If it happens within the next 3 years, Dell will probably be victorious, as HP will have its legs shot out from beneath it due to the drop in sales of their highest-margin retail product, printer ink. If cheap printer rivals don't enter the market in the next 3 years, HP will probably survive as the other big player in the PC market, leaving Dell to implode as their revenues continue to decline.

    In the end, IBM will probably buy out the loser in that battle, take the corporate hardware and service for its

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