Intel, late in 2007, flexed its muscle and stature in the tech world and began some big changes in its whitebook channel program. The company then followed-up by introducing its standardization model, "Jackson Bay" motherboard to the whitebook industry. Whitebook is the computer industry term for generic or non-brand notebooks. Although the climb for custom system builder VARs (Value-Added Resellers) to profitability in whitebox may seem a long, slow drive there is good reason to believe otherwise.
Whitebook system building has gone from being challenging to being attractive. Unlike the bulky whitebox, (desktops) building a whitebook represents big challenges for VARs and mom and pop resellers. Aside from the relative small size of whitebooks, system builders face component compatability issues (hard drives, ports, etc.) and a total lack of support from Original Device Manufacturers (ODMs).
Until now the notebook market playing field was owned by tier one vendors like Dell and HP. Clearly, they had no interest in the VAR whitebook market. Tier one vendors had the total support of suppliers and designers. But, what Intel's action means for VARs is the possibility of replicating whitebox sales revenues in the whitebook market. The success stories from VARs are pending, still. However, there is understandable excitement among resellers about the Intel whitebook motherboard standardization model. The timeframe may be a quick one before those watching for results in this whitebook market development make a commitment with a system builder the size of Equus leading the way.
No better partner for Intel than custom systems builder Equus Computer Systems has taken up Intel's new mobility whitebook motherboard. Between Equus' sales generating experience, a track record for others to follow suit and a down economy driving VARs to dig up business, ramp-up in sales in the whitebook market may not be far off.
A soaring notebook market
Tier one vendors such as Dell have experimented in the whitebox market. Dell left the market after a short two years ostensibly because they found customers preferred brand. The resellers' view: Dell's whitebox options totaled one model, and, it was priced higher than systems in stores. The 3 billion dollar whitebox market was hardly saturated at the time Dell exited.
Presently, the industry has seen the desktop market reach its saturation point. Coincidentally, the industry fell in 2007 from its first place sales position to apparel retail sales for the first time since Internet sales have been recorded. Who said this is bad news: The industry, in the same year, began experiencing soaring notebook sales. VARs, on the other hand, attest to the near impossibility of building whitebooks cost-efficiently because of widescale incompatibility involving motherboards, ports, cases and just a lack of support from Original Device Manufacturers (ODM).
Where is the whitebook market?
The common perception of tier one vendors dominating systems sales on all fronts in not so. The lion's share of the whitebox market belongs, not to tier one vendors, but to VARs. Now, with compatability issues laid to rest VARs can bite off their piece of the whitebook market, too. Where might VARs focus their sales? Precisely, on the previously mentioned 3 billion dollar whitebox market. When an in-house team recommends (less then a year after Dell exited the whitebox market) that the company return to the whitebox market and focus on Blacks and Hispanics in America that is to say the market whitebox/book market is there, still. The low-income sector represents an overlooked market and people with limited Internet access through the public library. Valuable as is the information it is old news for VARs.
Who is better suited for the whitebook market?
Although Dell, with its direct model ( and retail, now) has been touted as best suited among tier ones for the whitebox market, really, it's a better fit for VARs, independent contractors (ICs) and even more IE-Networks; Independent Enterprise Networks. They have the advantage of established and establishing relationships in their community in ways no tier one vendor can do. IE-Network members, or individuals, those at-home computer techs, engineers and hobbyists are precisely the VARs non-employee force which can penetrate the whitebook market. These are individual men and women who build for different reasons, whether financial, fun or social activism.
Showing posts with label intel. Show all posts
Showing posts with label intel. Show all posts
Sunday, March 16, 2008
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.
http://www.google.com/search?hl=en&q=Strategic+analyses+and+recommendations+for+dell
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.
http://www.crn.com/white-box/201807253;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.
Regards,
GT
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.
http://www.google.com/search?hl=en&q=Strategic+analyses+and+recommendations+for+dell
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.
http://www.crn.com/white-box/201807253;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.
Regards,
GT
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