I came across this series of articles reading up on HP's decision to get out of the laptop business. In that case, they calculate that home computers, though a third of their business, are not as profitable as other segments, so they should cut them loose. HP is being stupid, IMO. Besides the free advertising they get from having HP consumer products at home and in the office in constant use, they are going to lose their buying power for components they will need for specialty products they think they would make higher margins on.
this is absolutely classical Business School Thinking (the stuff they teach you when you take an MBA). It is all based on the short-term, quick hit, maximize our near-term value.
Companies were not run like this for the first 200 yrs of our Republic until MBA programs started popping up like mushrooms.
Focusing on the short term is one of the best ways to ensure you won’t have to deal with the long term.
On the other paw, I work for (and I suspect millions of other Americans work for) companies without which manufacturing ties in asia would mean we’d simply be out of business also. So I guess you’re damned if you do and damned if you don’t.
Does ANYONE in FR Land know of ANY example of ANY Union having a positive impact on the USA Economy in this century ?
In theory American companies cannot do this without the Federal governments permission, Federal Export Laws that regulates the control of shared information from US to other countries. ASUSTeK must have got some design information from Dell given the story above.
If the US government is too stingy with permission it can backfire too as companies go bankrupt, it's a worthwhile problem to try to correct.
HP is not being stupid at all. Laptops and desktop computers will go the way of the VHS tape.
The new tablet stuff has rendered them obsolete and as the tablets become more powerful there will be no need for personal computers as we understand them, outside of core infrastructure.
Yes, but we do have REALLY GOOD trial lawyers, Gov't regulators, and community organizers....
I’ve ragged on this for 20+ years to anyone that would listen. The problem with most companies is that they let the bean counters run them, and the bean counters are present oriented.
An example: the was a local factory that, to make their profits look good at corporate, made no investments in equipment. They were a liquid chemical factory with lots of piping that was literally duct taped together. They constantly did a boom bust as they fixed their machines just enough to do a big production run and then they’d blow something and be down.
Old manager finally retires, new manager comes in. He sees how threadbare things are - and very dangerous - and commits capital to upgrading. Corporate is ticked, profits are down, they question his job, and he finally explains that ‘profits were so good because my predecessor spent no money for upkeep’. He kept his job only because they weren’t OSHA spec and a major work hazard that HAD to be fixed.
Typical American corporate thinking. We don’t understand that investment and innovation is leverage and the present value is greater than if there were none all, even if it requires an up front hit to profit.
ASUS gets my money quite frequently. They are far and away one of the best manufacturers of gaming motherboards.
I have an ASUS mobo, TPM chip (actually Infineon mfg), and 27” monitor by them, and I’ve never had a problem with the equipment or support.
This article just shows me that the Asian chip manufacturers are ahead of the curve. I am leaning heavily against profitable American manufacturing of semiconductors and chips since unions usually demand astronomically higher salaries for less work than the Chicomms can accomplish.
“So Dell, where do you see yourself in the economy in the next five years?”
Standard interview question these momo’s will ask everyone who wants a job there, and can’t answer it themselves.
If anyone thinks the desktop/laptop/notebook is going away anytime soon, they’re mistaken.
You are just going to see more special purpose computing in more places.
Complex supply chains are the basis for a healthy industrial base. Ship the low level stuff off and in a few years or decades they grow up to replace your industrial base. In the short term, great profits were made. In the long term, the overseas guys became your boss and ate your lunch. The fallacy of business schools is that they treat making maximum profit as the only thing that is important. American companies will learn the hard way when Chinese and Indian companies have replaced them because we do not think strategically like our overseas competitors. It took decades to gut our industrial base and it will take decades to fix it. The current leadership better clue in as a 20% unemployed population will be very focused on taking them out and replacing them with people that care about this issue.
Thanks for posting this great article
bookmark
It’s really up to us, specifically who we elect to public office, whether we want to be a manufacturing power again.
We’re not now, because people have placed other priorities higher, such as a clean environment and stringent labor laws.
...which is fine until you realize that a THIRD WORLD country (as we’re about to become) cannot afford expensive pollution controls and ridiculous labor laws.
Think you're wrong here. HP is getting out of the laptop business for the right reasons:
First, PCs are not a core competency of HP. HP bought Compaq Computer less than 10 years ago, at a time when Compaq was not even dominant. It will have turned out to be a bad investment so HP will be divesting what was a bad investment for them.
Second, PCs, especially laptops, are endangered. Notebooks and tablets will quickly consume the laptop market because they are lighter, "cooler," equally powerful, with far better operating systems. Also, cloud computing and virtualization will mean the end of most desktop computers, in business at least.
For many years, PCs have been money-losing propositions. Most companies stay in the business for other reasons -- profits off bundled software, etc.
When HP bought Compaq they morphed from being an innovative company to being just another bottom-feeding PC company. With the PC divestiture they will perhaps regain their former status.
I used to work for a company that did that.
Darned near destroyed the company, and nearly shut-down the Boeing 777 assembly line, to boot.