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The Laptop Supply Chain 232

Carl Bialik from the WSJ writes "When a U.S. consumer orders a laptop from HP or other big sellers, how does the machine get made? Often via a complex supply chain in Taiwan and China, shaped by rocky cross-Strait relations, according to the Wall Street Journal: 'Outsourcing to low-cost, high-quality Taiwanese manufacturers has helped make Dell and H-P the world's top two PC companies in terms of sales...But the relationship between U.S. computer firms and their third-party manufacturers can be tricky. In the struggle to retain an element of control over their suppliers, H-P, Dell and others play contract manufacturers against each other to keep prices falling and ensure no supplier gains too much leverage.'"
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The Laptop Supply Chain

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  • Build (Score:3, Funny)

    by xerid ( 235598 ) on Friday June 10, 2005 @07:57AM (#12778909)
    I build my own. This way I can play, too.
    • How do you do this? I found that building a laptop is not an easy task. The most difficult itme to find in my case was the case/outer shell.
      • Re:Build (Score:5, Informative)

        by ID000001 ( 753578 ) on Friday June 10, 2005 @08:06AM (#12778953)
        There are barebone notebook with just the case and motherboard these day (Many avaialble at www.newegg.com for instant) and let you have some flexiablity in setting up a notebook yourself as far as component goes. Brand like Acer, ECS are very popular.
        Still much more limiting then a desktop PC, but it is a far cry from a few years ago where you can only have one model of video card and one properity casing CD-Rom drive you can upgrade to a writer for $200.
      • Re:Build (Score:2, Interesting)

        by xerid ( 235598 )
        Check out this Tomshardware link

        http://www17.tomshardware.com/howto/20050504/ [tomshardware.com]
  • uh? (Score:5, Interesting)

    by Mr_Silver ( 213637 ) on Friday June 10, 2005 @08:02AM (#12778936)
    In the struggle to retain an element of control over their suppliers, H-P, Dell and others play contract manufacturers against each other to keep prices falling and ensure no supplier gains too much leverage

    ... and how this is different from every other industry?

    As a consumer, if you want your products nice and cheap, then these sorts of negotiations are par for the course. If they didn't do it, you'd take your money elsewhere.

    • In any supply chain you have a channel leader. Sometimes these are the end resellers of product (automotive companies, Laptop manufacturers). Other times these are midstream manufacturers that are too big to really mess around with (Walmart, Intel and the like when dealing with chip development for closed systems like bar code scanners).

      In cases like the above, the channel leader can leverage CMs against one another to drive down price. That's your day-to-day negotiation strategy . Your choices become muc

    • Re:uh? (Score:5, Interesting)

      by dsginter ( 104154 ) on Friday June 10, 2005 @08:32AM (#12779143)
      If they didn't do it, you'd take your money elsewhere.

      There's really no "elsewhere" in the laptop market. All manufacturers make dirt upon initial sale but then rape the customer when they break the LCD or need a replacement battery. This is why the laptop industry needs an open laptop form factor - LCD swaps would be about $150 and batteries would be $20.

      FWIW, I actually do laptop repair on the side and I've noticed that every battery pack contains the same 3.6V cells [batteryspace.com]. There *is* a standard, the vendors just put the cells into proprietary cases so we can't interchange them.
      • by myov ( 177946 )
        I have an out of warranty powerbook with a seized hinge. It should be a $60 or so part to replace. But, it's considered part of the "display module" which means replacing a $1000 LCD, which is working fine. Even on ebay, it's an expensive repair. Doing it yourself means potential damage to the LCD as the whole thing is glued.

        Hinges fail. I don't know why Apple designed the LCD in the way they did.
    • The big lads are doing it. There are lots of manufacturers, distributers etc in Taiwan and China who would love to sell more directly (to businesses, not consumers), they get a larger proportion of the cash and you get a cheaper product. It's what companies like alibaba are all about.

  • Who knew? (Score:5, Funny)

    by MarkGriz ( 520778 ) on Friday June 10, 2005 @08:06AM (#12778950)
    "... shaped by rocky cross-Strait relations"

    Who knew that laptop technology was influenced so much by country music. And, why is he so cross anyhow?
  • by dextroz ( 808012 ) on Friday June 10, 2005 @08:07AM (#12778959)
    In a few years, no one on continental America will know how to put a laptop together :-/ But they'll be great at tracking DHL/AirBorne and of course flipping burgers ;-)
    • But they'll be great at tracking DHL/AirBorne and of course flipping burgers ;-)

      Only the stupid ones. Progress has always left some jobs behind. Buggy whip and block ice jobs used to be well paying. The idea is that you take the opportunity to do something else that is higher paying/higher margin and leave the low pay/low margin stuff to others. Do what you do well, hire someone else to do everything else.
      • Re:That's great! (Score:3, Insightful)

        by bombadillo ( 706765 )
        Progress has always left some jobs behind. Buggy whip and block ice jobs used to be well paying

        These jobs were replaced by technology. Their roles were antiquated. Fortunately, advancments in technology opened up the door for other career paths.

        We are seeing something different now. These jobs are not antiquated. Many of the jobs moving overseas are still relevent and will be in the future. They are simply moving out side of the country to cheaper labor. The problem I see regarding this trend is tha
    • But they'll be great at tracking DHL/AirBorne and of course flipping burgers ;-)

      Nah. Americans won't be building laptops, but they'll be programming them, first and foremost with DRM software to protect the music and moves that other Americans produce to load onto those laptops. And, of course, rather than flipping burgers Americans will specialise in the high-speed pizza delivery that all these hackers and media darlings need to keep going.

      This is all about three pages into one of your geek set texts.

  • Lower price... (Score:4, Insightful)

    by ID000001 ( 753578 ) on Friday June 10, 2005 @08:08AM (#12778965)
    means at least the saving are pass onto the consumer. Admittedly though, there are not a whole lot of choices when you buy a laptop. More often then not you will not be told where the laptop are made unless you can see the underside of it.
    Since customer perfers price over quality in general, it is not really the companies fault to find the cheapest supplier.
    • Re:Lower price... (Score:2, Insightful)

      by ID000001 ( 753578 )
      And mind I add. There are no way to easily put "Quality" on the flyer or other adverstiment. They certainly can't say "We spend more time building this notebook then the other".
      Until you can put a number on Quality and compare it to other, an advancing technology like this might not be the best place to put your effort in build quality. Word of mouth will still work, but by the time the early adaptor got comfortable with the product and starting to tell people how great they are. Model with more battery l
  • Interesting... (Score:5, Interesting)

    by lucabrasi999 ( 585141 ) on Friday June 10, 2005 @08:10AM (#12778979) Journal

    From TFA:

    Outsourcing to low-cost, high-quality Taiwanese manufacturers has helped make Dell and H-P the world's top two PC companies in terms of sales. International Business Machines Corp., which outsourced less than half of its laptop production, according to Merrill Lynch, and operated its own factory in China, consistently lost money on its PCs. It sold the business this year to China's Lenovo Group Ltd., which has used Taiwanese companies to make most of its notebooks in China.

    So, IBM used to keep most of it's own laptop production in-house. Which may partially explain why the ThinkPad's are, by far, the best laptops around. Let's see what happens to the ThinkPad now that Lenovo runs the show.

    • Which may partially explain why the ThinkPad's are, by far, the best laptops around

      For you, or the IBM Shareholders?

      Lets put it this way, if IBM had upped their prices to the level they needed to in order to make the same money as HP and Dell, would you pay that extra money to get the quality? And would enough people pay that extra to help IBM succeed in a volume business, or would their prices have to rise still further to ensure profits in a niche.

      IBM products were good, but too cheap for IBM to make
      • Re:Interesting... (Score:5, Informative)

        by lucabrasi999 ( 585141 ) on Friday June 10, 2005 @08:30AM (#12779130) Journal
        Lets put it this way, if IBM had upped their prices to the level they needed to in order to make the same money as HP and Dell, would you pay that extra money to get the quality? And would enough people pay that extra to help IBM succeed in a volume business, or would their prices have to rise still further to ensure profits in a niche.

        Pre-Lenovo, the IBM laptop tended to be significanly more expensive than any of it's major competitors (not counting Apple). Therefore, IBM had already included the higher quality of their laptop in the price. The ThinkPad is a very popular purchase amongst corporations. Companies were willing to pay the extra price for the perceived quality and service that IBM provided.

        IBM products were good, but too cheap for IBM to make money on it.

        Last year, IBM made a profit on the PC and laptop business. But, they only made 1 or 2 percentage points profit on that hardware. I just checked HP's web site and they reported a profit margin of 2.1% on their PC's and Laptops for the first quarter of 2005. So, the margins IBM was making were comparable to at least one of it's main competitors.

        And their opinion was clearly that technical superiority meant nothing in a market that appears to be dominated by price.

        I think you are right on this point, but I would have phrased it differently. IBM's opinion was that laptops and PC's have become a commodity and the profit margins were too thin to justify remaining in that line of business. IBM does still has a "toe-hold" in the PC/laptop business, since it owns a minority share of Lenovo.

        • Pre-Lenovo, the IBM laptop tended to be significanly more expensive than any of it's major competitors (not counting Apple). Therefore, IBM had already included the higher quality of their laptop in the price. The ThinkPad is a very popular purchase amongst corporations. Companies were willing to pay the extra price for the perceived quality and service that IBM provided.

          One of the nice things about Thinkpads is that service manuals are free and parts are easy to get (and reasonably priced by laptop stand
      • Re:Interesting... (Score:2, Insightful)

        by Anonymous Coward
        IBM products were good, but too cheap for IBM to make money on it. And their opinion was clearly that technical superiority meant nothing in a market that appears to be dominated by price.

        The market says the cheapest laptop is the best.


        You missed a spot. When you say "the market," you mean the CONSUMER market. A market that, frankly, IBM hasn't expressed any desire to play in for years (disclosure: worked in their personal systems group until about a year ago).

        IBM doesn't want to be a consumer laptop
      • It's interesting, IBM actually received the bulk of our laptop orders, and *all* off the field and upper management orders. They were reliable, solid (well, bullet-proof really) machines that really seemed to rival Apple in the "just works" category. We know we paid a premium to buy IBM as opposed to Dell or someone, but the difference was worth it, especially when having to replace *another* LCD screen on a Dell that fell apart being hauled too and from the office. I can only imagine how often our field
    • Re:Interesting... (Score:1, Insightful)

      by Anonymous Coward
      Are you really serious when you make a statement like this? Do you even know that all of IBMs lapotops are/were manufactured in China/Taiwan since early 90s? Same with Apple, HP, Dell, Gateway....

      • Are you really serious when you make a statement like this? Do you even know that all of IBMs lapotops are/were manufactured in China/Taiwan since early 90s? Same with Apple, HP, Dell, Gateway....

        Obviously, you don't understand the term "in house". I didn't say WHERE the laptops were made. I said, IBM "owned" most of the manufacturing process. IBM does have actual paid employees living in China, believe it or not. The difference between the IBM process and the HP process is that HP pays another company

    • The Thinkpad sales rep who visited my University said that Lenovo hired IBM employees from the Thinkpad division and that the only work done in China would be the manufacturing.
    • Actually Dell's laptop designs are done in house as well, just they're done overseas in cheapo geek sweatshops instead of in Texas. Dell designs a lot more than most people think, but only their servers are actually built in the US =(

      Every employer I have had starts out by "contracting" their designs out to 3rd parties in some asian sweat shop. Those designs are usually of poor quality and sometimes don't quite work, but it's a cheap way to test the market. Then if there's money they bring them in house (w
      • Dell's EMEA computers are all built in Limerick, Ireland where they employ 2000+ people directly. This meant they accounted for 6% of our GDP in 2002!

        The only thing is, it seems Dell are building a plant in Poland now. And unless we in Ireland get the stuff such as servers that the US plants do now (left there for them when desktop production previously moved here), we'll be in trouble if some/all production moves to Poland (although the expanding Asian market share in particular bodes well for requiring m
  • High Quality? (Score:2, Interesting)

    by Anonymous Coward
    "High Quality Manufacturers?" Seriously, has anyone ever used a HP laptop before... If hospital equipment functioned at the same "High Quality" that HP laptops do then we wouldn't have to worry about pulling the plug on our loved ones. The machines would work for two weeks, start getting really slow, the screen would break, and then it would fail and kill the patient.
  • by Infinite Entropy ( 870073 ) on Friday June 10, 2005 @08:14AM (#12779004)
    I always worried about the effect that any Taiwan-China conflict could have on the supply of computers. It seems almost all motherboards are made in Taiwan and a whole lotta RAM.
    • There is always S. Korea and Japan. But, I'm not sure how long it would take them to refab the factories to meet the global demand. On top of that, you still have to deal with new contracts being made between companies. Such a scenario could take at least a year or so to fully gain momentum...assuming the infrastructure is in place.
  • ...of Taiwan's importance to the Gloval High tech economy. Even more important are the roles of Taiwan semiconductor foundry houses like TSMC and UMC. Taiwan dominates the foundry business (IBM and Singapore's Chartered have significantly lower volumes), and with more and more chip design firms going fabless, an ever-greater percentage of cutting-edge chip designs flow through Taiwan. Indeed, it would be hard to find a computer or MP3 player sold today which didn't have a part fabbed in Taiwan.

    Now, imagine what would happen to America's high tech industry if Communist China invaded...

    • America's tech industry might take a temporary hit, but since its not their assets in Taiwan, they'd quickly find a contractor willing and able to make the parts elsewhere (India).

      I'm more concerned that if the US will be compelled to intervene if China invades.
      • Quickly? It's not as if there's a ready supply of companies that can make these parts. The Indians would have to start from scratch, and the lead time on building a state-of-the-art chip fabrication plant is not insignificant.
        Remember the RAM price hike a few years ago when a critical supplier (one of two in the world IIRC) for some component used in chip fabrication had a fire?
        • Ok maybe not quickly as in within a couple of months.

          Consequences of a Chineese invasion of Taiwan:
          On one hand you have increased electornics prices and decreased availability. On the other this conversation: China says, "Look I'm dealing with a renegade state here mind your own buisness." The US responds, "Its not your state, and it is our buisness. Step off, we have subs in the strait who have orders to open fire on any Chinese military vessles." China comes back, "Fire on one of our ships (that
          • Consquences of a China threatening to invade Taiwan?

            The U.S. moves the seventh fleet towards Taiwan.

            For those who don't know; The seventh fleet is the world's largest naval armada, and its currently stationed at a port in Japan.

            I believe it constitutes *multiple* aircraft carrier battle groups, as includes nuclear armaments. That fleet alone would be enough to level most of Asia, let alone China.

            China, although it may threaten, and although it has a nuclear arsenal, does *NOT* have the capability to invade Taiwan. China's *entire* navy consists of the following:

            http://www.navyleague.org/seapower/chinas_navy_tod ay.htm [navyleague.org]

            he acquisition of these technologies resulted in China's production of more advanced surface combatants during the past decade-- including a single 6,000-ton Luhai-class guided-missile destroyer (DDG), two Luhu-class DDGs (4,200 tons), and nine Jiangwei-class frigates (2,250 tons). These units are equipped with the HQ-7 or HQ-61 short-range air defense systems that likely will be replaced by a longer-range vertical-launch system within the next three to five years. These ships also have integrated tactical data systems, an improved antisubmarine warfare suite that includes embarked helicopters, and gas turbine propulsion.

            Notwithstanding these improvements, the backbone of the PLA surface fleet remains its 16 aging Luda-class destroyers (3,250 tons) and 30 Jianghu-class frigates (1,425 tons) that are largely inadequate to meet the requirements of modern warfare. The planned acquisition of two 7,940-ton Russian-built Sovremenny-class DDGs in the 2000 to 2001 period will improve the PLAN's surface-combatant capabilities. These units are likely to be equipped with an advanced SAN-7 air-defense system, the KA-28 Helix Helicopter, and SSN-22 cruise-missile technology. The PLAN's HQ-61 and HQ-7 systems are based on the French Crotale land-based surface-to-air missile system, and they do not provide surface units with an effective area-defense capability. This deficiency makes PLAN surface units extremely vulnerable to air attack.


            Furthermore, China's airfore consists of 20-30 year old Russia planes in various states of maintenance.

            Taiwan's airforce consists of the latest and greatest American military hardware that their economy can purchase. Consider that Taiwan spends about 1/6 of the amount China spends on their military. This is to defend a small island, while the Chinese expenditure must go towards the entire nation.

            This is in addition to the U.S. unofficial military support.
            List of Taiwanese naval ships: http://www.fas.org/man/dod-101/sys/ship/row/rocn/ [fas.org]

            As of right now, I would not be certain that China had naval superiority over Taiwan *alone*, ignoring that the U.S. navy makes both look incredibly puny. Considering the following facts:
            1. No Naval superiority for China
            2. Air superiority for Taiwan
            3. Massive naval superiority of the U.S.
            4. ~$120 billion in trade between TaiwanChina
            5. Reluctance of China to employ nuclear weapons

            I'd say its *extremely* unlikely that China will seriously consider invading Taiwan over the next 50 years. Saber rattle? Perhaps. Let loose the people's army? No way.
            • China's airfore consists of 20-30 year old Russia planes in various states of maintenance.
              Most of its airforce is rubbish, yes. But China has a sizable force (several hundreds) of Su-27 derivatives which are very capable aircraft, and is building more of those every day.
              China is also stationing lots of long-range missile batteries along the coast facing Taiwan, and it's building a fleet of amphibious ships. www.strategypage.com seems to be of the opinion that China will be ready to invade Taiwan by 2010.
      • The US won't be compelled to intervene. It will intervene or not based on political considerations. I sincerely hope that the US wouldn't intervene. The last thing we need is a nuclear war. Though at the same time they can't admit they wouldn't intervene, or Taiwan will be invaded right away.
        • The only reason that China hasn't invaded already is because the US keeps threatining to intervene. The US won't want to look like it has been bluffing so it will inevetably dispatch warships, which the Chinese will inevitably shoot at (China considers the strait its territory,) the US will respond in kind. What happens next is anybodys guess.
    • The only reason why they dominating the laptop supplier business is because of their price. If consumer have a good idea of quality. They would fails.
    • *Communist* China? (Score:3, Insightful)

      by Colin Smith ( 2679 )
      Where have you been the last 30 years?

      I think you'll find that China could cripple pretty much all of the American economy should it choose to, and without bothering to invade Taiwan.

      • And where have you been the last 30 years?

        Yes, the Chinese economy may be becoming ever more capitalist, but it's still a totalitarian state with the typically Communist lack of respect for individual freedom.
        • Yes, the Chinese economy may be becoming ever more capitalist, but it's still a totalitarian state with the typically Communist lack of respect for individual freedom.

          Jeez... if it weren't for your Dutch email address, I'd have written you off as a right-wing American. I don't like 'true' communism at all (impossible in practice, and I don't even humour it in theory now), but your implication that capitalism --> freedom (and vice versa) and that totalitarian --> communism (and vice versa) is a typi
          • It's quite possible to have a capitalist system in place under a totalitarian government, you know.
            I thought that's exactly what I was saying.
            your implication that capitalism --> freedom
            If I gave that impression, something was lost in translation. The GP implied that China isn't Communist any more, and I tried to say that while that's correct as far as their economic policy goes, the structure and style of their government has changed little from the bad old days when everybody called them Communists
      • by Jerf ( 17166 )
        True... but it would probably trigger an almost instantaneous revolution amoung the people who benefit from US relations, which is a lot of relatively rich people.

        Sure, China could "pull the plug"... but guess who gets the worse end of that deal?

        Metaphorically, we get hurt. Badly, even. But they die. (Possibly literally for the gov. leaders.)

        China may threaten this. They may do little things here and there. But they aren't going to pull the plug enough to do more than minorly inconvenience us. (To a larg
    • Now, imagine what would happen to America's high tech industry if Communist China invaded...

      I can also imagine what the US Pacific fleet would do to the PLANAF if it invaded. Now, if the Chinese Army could drive its tanks to Taiwan the country would have been history decades ago. As it is they still don't have the Naval strength. Taiwans high tech industry and its importance to US defense contractors and 'fabless' high thech firms might actually be its best guarantee of US support in the event of a 'skirm
      • <sarcasm>Because you know, the U.S. really needs a war on yet another front right now. There's just this abundance of military manpower that they don't know what to do with.</sarcasm>
  • Summary (Score:2, Insightful)

    by HomerJayS ( 721692 )
    <insert any type of product here> manufacturers seek to produce their products at the lowest possible cost. They outsource to overseas contractors who in-turn outsource to even lower cost labor in the emerging manufacturing economies of Asia.
  • Cheap (Score:2, Interesting)

    by I_Strahd ( 791299 )
    I don't know about anyone else, but I have a problem buying the cheaper Laptops.
    I inevitabley run into hardware problems on the sub $1000 laptops.
    I would rather pay a little more and not have the down time for my users. Strahd
  • Summary (Score:2, Informative)

    by 823723423 ( 826403 )
    [1] Lionel Menchaca, a Dell spokesman, says the Round Rock, Texas, company obtains partly built laptops from contract manufacturers, but does final assembly at its own factories in Ireland, Malaysia or China, where microprocessors, software and other key components are added.
    [2]When a customer in the U.S. clicks on Hewlett-Packard Co.'s Web site to purchase one of its Pavilion zd8000 laptop computers, the order quickly arrives thousands of miles away at a factory in China run by a less-familiar name, Quanta
    • The reason for adding CPU and RAM last is because they depreciate the fastest; the later you add them, the less you have to pay.

      Both mechanisms: customise in the channel and direct-from-ODM are solutions to this.
  • by Anonymous Coward
    Trust me, I deal with chinese and taiwan manufacturers of boards. Their idea of quality is "will it pass ougoing inspection?" NOT "Will it last more then 90 days".

    I just dealt with a OEM that makes boards for themselves in China, and even there they refused to fix a problem because it would mean a loss of face.

    It amazes me the truly poor work that is done here in China and abroad. I don't see this nearly as much in the US [although i do see it], and if anything is going to save our board manufacturers
    • Of course quality issues abound - you're going with the lowest bidder - what do you expect?

      It has *nothing* to do with loss of face - it's all about *money*. They are going to cut corners, they are going to take shortcuts, they are going to do everything possible to get product out the door without having to fix or rework anything (it costs them money!).

      Bottom line - you get what you pay for. If the criteria is completely cost based (and don't kid yourself - it is) - then you're going to get crap.
      • I'm in the retail and wholesale business. You don't get what you pay for, and never have.

        You get what you invest. Buying anything involves more than money up front. It involves research, building a relationship with a sales staff, building a relationship with a tech staff, and following through with what your original intentions were.

        Most of my consulting customers who have problems could have easily have been fixed if they invested a tiny bit more time in researching what their short term needs are.
    • I just dealt with a OEM that makes boards for themselves in China, and even there they refused to fix a problem because it would mean a loss of face.

      You should change the requirements to specify that the problem doesn't happen, then.

      Chip H.
  • OCEC? (Score:2, Interesting)

    by localman ( 111171 )
    I wonder if there will ever be an "Organization of the Computer Exporting Countries" cartel?
  • Feels like a rerun (Score:3, Informative)

    by dkf ( 304284 ) <donal.k.fellows@manchester.ac.uk> on Friday June 10, 2005 @08:32AM (#12779138) Homepage
    of this [guardian.co.uk] story.
  • Further proof that Dubya's DHS [slashdot.org] is going to have to switch back to slide rules [hpmuseum.org]. At least they won't get hacked [slashdot.org].
  • by Registered Coward v2 ( 447531 ) on Friday June 10, 2005 @08:36AM (#12779191)
    What I found interesting was the move to manufacturering the more expensive components in China - that is the next place to look for cost reductions. It'll take a while, but it will happen - leaving Tiawan to do higher end engineering and component fab, with the commodity stuff outsourced (much like we do today).

    China's also developing the engineering talent to do the design work - Siemen's already does cell phone work their; China certainly has the talent to develop into a major player. Of course, political challenges - how do you keep such diverse country in one piece if you lessen the central control.

    If I were India, I'd be worrying about the Chinese developing enough English speakers to capture the call center business.
  • by Quiet_Desperation ( 858215 ) on Friday June 10, 2005 @08:49AM (#12779328)
    "When a U.S. consumer orders a laptop from HP or other big sellers, how does the machine get made?

    Magic elves.

    I'm more concerned about the lapdance supply chain.

  • by intnsred ( 199771 ) on Friday June 10, 2005 @09:01AM (#12779431)
    Having our laptops and PCs made this way may seem great -- for as long as the Chinese keep funding our ever-increasing trade deficit by taking our declining dollars and purchasing our treasury bonds.

    Dell and HP are at least keeping some design and marketing jobs in the US. :-/

    But if they follow the lead of many other American companies (e.g. GE), that design will be out-sourced overseas. American corporations are being destroyed by their own greed and shortsightedness. Many American companies are now only shells -- they're a brand name with a US-based sales and marketing force and everything else done overseas.

    Fool yourself if you want, this is not a sustainable way of doing business. Consumers may think they've got it great now, with prices going down. But those same consumers are transferring wealth overseas and we're only able to do it now because the rest of the world allows the US to get into debt that no developing country could -- we can do it only because of the dollar's dominance.

    Eventually that dollar dominance will evaporate and we'll realize that we transferred huge amounts of wealth and industrial power to foreign countries, all based on an ideology of greed and "free" trade.

    Now, none of these are my own ideas; this is seen clearly by those on the political left and also by "traditional" conservatives. People like Reagan's Asst. Sec. of the Treasury and former Wall St. Journal editor Paul Craig Roberts have written extensively on this foolish but deliberate economic suicide. The mainstream corporate mass media avoids this -- it may upset people, cause them to question the conventional wisdom, or, worse in their view, impact their short-term profits.

    Laugh and enjoy it while we can; things that can't go on forever don't.
    • That's because companies are only looking as far ahead as the next quarterly report, or maybe the next annual report. That's all the shareholders care about so that's all the companies care about.

      China, Inc. and others are looking much farther down range. China is working on 50-year plans, which currently involve them taking over the world in many different areas of commerce if not military.

      Shortsighted American and Japanese companies worried about short-term profit and loss can't compete against someth
    • " this is seen clearly by those on the political left and also by "traditional" conservatives"

      So in other words 5% of our Congress? Because these days the castrated Democratic majority is too busy trying to copy what Republicans did to gain power, and the Republican majority is too busy implementing their un-American and hurtful NeoCon agenda. So that leaves like 5% of Congress to realize that the other 95% is totatlly fucking up our future? Great.
      • I'd say that percentage is about right -- 5% sounds in the ballpark.

        Of course, during election season that number will pop up to 25% or so, as rhetoric-filled speeches about jobs fly about like mosquitos in a Minnesota summer.

        But you're right. Though the Democrats bleat about this a bit more than many Republicans, all in all both parties are bought and paid for by the corporations who are laughing all the way to the bank thanks to our "free" trade policies.
    • Eventually that dollar dominance will evaporate and we'll realize that we transferred huge amounts of wealth and industrial power to foreign countries, all based on an ideology of greed and "free" trade.

      Yeah, let's seem them collect on that debt from the most powerful military force the planet has ever seen. Muhahahaha!!!!

      The sad part is, I don't know if this should be moderated 'funny', 'insightful', 'troll'. Probably all three.
      • You don't know much about economics, do you?

        First, the American military is impressing nobody. The swelled head bubble about the US being so militarily invincible has been popped by brave Iraqis defending their country with little more than assault rifles and light arms. The weakness of the US military is shining clear for all to see. While the US is dangerous, the world is no longer in awe.

        Second, the US economy can also be easily popped. If China were to dump the 600-800 billion dollars its central
        • You do know that the Chinese currency is pegged against the dollar, right?

          Its well-accepted that the Chinese currency will devalue when they stop pegging against the dollar.
          • Yes, I'm aware that the Yuan is pegged to the dollar. But in the case of a dollar collapse, the Yuan could easily be detached and allowed to float like any other currency.

            As to the Chinese Yuan devaluing if the Chinese stop it from being pegged to the dollar, that just doesn't make sense. Are you sure you don't have that backwards?

            The US gov't is trying to get the Chinese to allow the Yuan to float freely like other currencies. The Chinese refuse, primarily for two reasons:

            (1) The Yuan would rise and
    • You are trying to put two different things together.

      Outsorcing happens due to the difference of incoming on different countries. It is simple, US people are richer, so their workers will want bigger salaries; the companies want to pay less, so they outsorce. This may happen on any rich country on the world, and the only way to avoid on the long run is to let the poor countries become rich (something that US try very hard to avoid, because of dunb geediness).

      The US foreign debt is caused by the artificialy

    • Just today Democracy Now [democracynow.org] is running an interesting interview [democracynow.org] with a person involved in the Central American "free" trade pact.

      This business school professor reiterates many of the same points brought out in these discussions. He tells an interesting story about how Mexican workers are now seen as "rich" and how employers are using the Central American "free" trade pact to drive down the wages of Mexican workers by threatening to move jobs from Mexico to Honduras.

      Ahh, the wonders of corporate globalizatio
  • Although I am not in the laptop manufacturing industry, the article is pretty much accurate.

    My personal laptop is made by Quanta, and I bought it through Powernotebooks.com. (sorry for the plug).

    When I was buying a laptop, I considered the brand-names, but I was disappointed by their selection in terms of parts and different models. I ended up buying from PN.com because I wanted to eliminate the 'middle man' (brand-name retailer).

    I haven't had any major problems with my computer, just normal wear and t
  • Is there a standard layout, ala ATX, for laptops? I think if you could buy the component pieces like a desktop and build your own, you'd see more innovation in the laptop space.

    Too many times with laptops I start with the specs I need then go shopping for someone who makes it.

  • Given this supply chain there is therefore NO REASON why HP and Dell could not supply laptops with a blank hard drive so that the consumer can load their own OS. As the said laptop comes without an operating system (just a CDROM of drivers) it should therefore be cheaper.

    Dell, HP, I'm waiting................

    Ed Almos
    Budapest, Hungary
  • What's the story in this? This is business as usual....
  • by poity ( 465672 ) on Friday June 10, 2005 @10:14AM (#12780029)

    While large manufacturers build machines on exclusive designs from resellers like Dell, IBM, HP, Sony, etc., many of these same manufacturers have thier own branded designs available through smaller resellers.

    These manufacturer designs are cheaper because they are often sold unbranded. They also experience shorter timespans between hardware revisions because they don't have to wait for those exclusive design specs from resellers, and thus often have the latest components in their models months ahead of those from the major resellers.

    ASUS, one of the largest manufacturers in Asia, supplies Apple with Powerbooks, iPod shuffle & minis, Sony with many of their laptops, and have been an on-and-off builder for IBM in the past (there was a report in March of ASUS in major talks with Lenovo to be their supplier in the future), among other famous names. This is one of the many well-kept secrets in the laptop industry.

    ASUS has seen their own laptop line more than double in sales since last year, mainly due to word of mouth between computer enthusiasts venturing into the laptop market.

    Major manufacturers who supply brand name resellers as well as popular specialty shops:

    ASUS [asus.com]
    Mitac [mitac.com.tw]
    Uniwill [uniwill.com]
    Clevo [clevo.com]
    Compal [compal.com]

    Some resellers (VoodooPC, Falcon Northwest, Hypersonic, ABS, and Alienware among others) add some paint and a label (and, like good captalists, at least $500 to the pricetag) to these machines to come up with their own specialty models. Many other less visible resellers (MWave, Discountlaptops, ISTNC, Proportable, and others) sell the exact same machines unbranded in customizable barebone configurations for incredibly low prices.

    As computer enthusiasts ditch their unwieldy desktops for portable solutions, we will find manufacturer brands becoming more and more visible to the general public, and large brands will have even more competition.

  • Article Error (Score:2, Informative)

    by Khyber ( 864651 )
    'Outsourcing to low-cost, high-quality Taiwanese manufacturers has helped make Dell and H-P the world's top two PC companies in terms of sales

    Wrong. Dell and HP only outsource about 1/5 of their stuff to Taiwan. 2/5 ends up in India, the other 2/5 is in Guadalajara, Mexico.
  • Buying laptops in the Bermuda Trapezoid is a ripoff. These corporate front ends jack up the price for the priviledge of buying through them. At least in my case, it took 5 weeks to order a $2400 laptop from Taiwan, the American front end charged a rediculous markup to put their sticker on it, and it was obsolete by the time I got it.

    Eventually this is going to go away and we'll be able to deal directly with Taiwan businesses, paying the fair market price.

  • Those who lived during the 1980s will remember how the world was flooded with products from a tiny island, so much so that almost everything, unless it was made in Japan, was made in Taiwan. While back in the days Made-in-Taiwan was synonymous with bad quality, that's no longer the case and now fine products are made there. I still am amazed that a tiny island like Taiwan can supply the world with sooo many products.

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