Post Index

Twitter Updates 2.2.1: FeedWitter

Tuesday, September 18, 2007

Whitebox, whitebook markets

I ran in to a hamburger place today mainly to get out of the torrential downpour. I couldn't resist. I wolfed my hamburger down and went over to snoop at what I can only assume was an independent contractor. While his client ate her meal he swapped out her notebook motherboard right there at the neighborhood eatery in no more than ten minutes. It was his ninth one of the day. The day before he did 15, he said. Despite a bit of a nonchalantness and busyness he seemed a bit leery about what I "thought" about the white-box market. "I know" I asserted putting out just a few facts including the message below.

Who says there's no room or money in the white-box market for private enterprise? Only the naysayers (oh, I'm sure there's more) who read my message I posted on Dellideastorm a while back.

Dell expects the same low cost components which enhanced the company's 2nd quarter profits will hurt its profitability with slow costs declines in the second half of the year. It's not like Dell to sit still and be overrun or to let opportunity pass. The recent opportune acquisition of Silverback puts Dell in the role of virtual IT department for small business. So, why wait, given low-cost component prices? The opportune moment for Dell to take on the role of white-box component supplier for private enterprises is ripe for the taking.

Mere months after Dell abandoned its 2 year foray into the white-box its own team recommended the following in pages 47:

Since white boxes increasingly use the same components as brand computers, their functionality differs little from those sold by the Tier 1 and 2 vendors (Graham-Hackett, 2005). The recent trend towards consolidation and the decreases in component prices has led to the intense competitive pricing now facing the industry. Given the long-term downtrend in PC pricing, vendors will need to continue to cut costs from their operations. The growing ‘white box’ market will require the Tier 1 and Tier 2 vendors to maintain competitive prices. Companies with more favorable cost structures increase their chance of profitability.

And page 50

Race and age is also a factor in computer usage, according to the U.S. Census Bureaureport. Blacks and Hispanics have the lowest rates of computers at home of any U.S. racial group—providing a market opportunity for computer hardware companies which target these groups. Further, people 65 and older had the lowest rates of computer (28%) and internet (25%) use of all age groups. As the baby boomers age, this demographic is likely to increase its use of both technologies, partially due to exposure at younger ages. However, the current 65 and older population is also a market opportunity for computer hardware companies.

(Note: Dell, like HP and Acer [who just acquired Gateway] is Tier 1.)

Check out what Equus is doing with whitebooks thanks to Intel's push for standardization. I have urged Dell do much the same as Equus _ for resellers_ by stepping into the role of components supplier to white-box builders.;jsessionid=MXTCSQHG3HH1KQSNDLPCKH0CJUNN2JVN

Bottom line is you don't have to wait for Dell, HP or any of the major manufacturer. Contrary to common perception it's the hundreds or thousands of mom&pop, resellers and solution providers who have the lion's share of the white-box market, not the mega manufacturers. Next best thing to you going it alone as a white-box custom builder, whether desktops, notebooks, (or servers) is going in with and building your own Independent Contractor Network.



No comments: