Posted on 08/24/2011 10:45:19 AM PDT by Dick Holmes
How whole industries disappear
Take the story of Dell Computer [DELL] and its Taiwanese electronics manufacturer. The story is told in the brilliant book by Clayton Christensen, Jerome Grossman and Jason Hwang, The Innovator’s Prescription :
ASUSTeK started out making the simple circuit boards within a Dell computer. Then ASUSTeK came to Dell with an interesting value proposition: “We’ve been doing a good job making these little boards. Why don’t you let us make the motherboard for you? Circuit manufacturing isn’t your core competence anyway and we could do it for 20% less.”
Dell accepted the proposal because from a perspective of making money, it made sense: Dell’s revenues were unaffected and its profits improved significantly. On successive occasions, ASUSTeK came back and took over the motherboard, the assembly of the computer, the management of the supply chain and the design of the computer. In each case Dell accepted the proposal because from a perspective of making money, it made sense: Dell’s revenues were unaffected and its profits improved significantly. However, the next time ASUSTeK came back, it wasn’t to talk to Dell. It was to talk to Best Buy and other retailers to tell them that they could offer them their own brand or any brand PC for 20% lower cost. As The Innovator’s Prescription concludes:
Bingo. One company gone, another has taken its place. There’s no stupidity in the story. The managers in both companies did exactly what business school professors and the best management consultants would tell them to do—improve profitability by focus on on those activities that are profitable and by getting out of activities that are less profitable.
(Excerpt) Read more at forbes.com ...
“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.
That’s not quite right if you are refering to ITAR? The ITAR regulations are for transfer of defence sensitive information. In the case of Dell, yes they were required to make a disclosure through channels, but once no defence sensitive information was determined to be included, out it goes.
So. To get back into the biz, one needs to come up with a way to pull 20% off ASUSTeK...
Figure that out, and YOU win.
I do not agree about desktops. Developers and gamers need
to be able to replace the major subsystems (memory, video options, HDD) and need to support big memory hogging apps.
Try running MS Developer Studio or SoftImage on a tablet
and you will discover that workstations will be with us for the forseeable future.
Laptops are still what businesses use on the road. Besides, they had free advertising, all those HP logos on their stuff people use at the office and at home. And what about the volume discounts they get for buying huge amounts of components? Aren't they gonna miss that, whatever they choose to make?
I find that interesting. Back in 1976 I was fortunate enough to take a tour of the HP Factory that made Oscilloscopes. If I remember Correctly EVERYTHING to make an Oscilloscope was made by HP from the CRT’s to the Resistors and transistors.
And at the time HP test equipment was simply the very best you could buy.
Sometimes you have to look back and see that the beginnings of the end for a company occur when the Lawyers and Accountants run the Company instead of the Engineers who design and build the products the company is known for.
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 didn’t HP discontinue their tablet too?
meadow muffins
It’s hard to focus on the long term when you are a CEO that plans to pump up your stock options, cash out and move on in a couple of years to the next sucker.
I do CAD-CAM work here, no way a tablet can begin to do what is needed in that area. They may be fine for the social media and other simple input apps, but anyone who is serious about worker production in an office setting will always take a PC over any small tablet now.
The best of both worlds is having both, but workers will be far more productive in a non-virtual office setting with a dedicated workstation to input on, and also far easier to control sensitive data if you are working in that area also.
Think also of HP calculators. They were the best and now they are gone.
Well said Abathar, throw in the use of dual screens for CADD and tablet will never do. Screen size is also of importance for many applications.
That is because they wanted to stop the reverse polish notation.
I think you have it right. A lot of users just want to send email and surf the web. Tablets are good for that, very portable and very easy to use. In the past some users have had $1500 desktop machines and used them for surfing the web. That behavior is going away.
Power users won't be happy with tablets, but power users know enough to stay away from tablets for any serious work.
The only thing that has destroyed more American businesses than union labor is American management.
That is clearly wishful thinking. REAL, productive work cannot be accomplished on a tablet. Mighty handy for e-mail, PIM, and going surfing on YouTube... Maybe useful taking inventory, and might replace the written tickets waitresses use, but try and crunch accounting, creating graphics and imaging, running a spreadsheet, or even writing a novel on a tablet - It ain't gonna happen. There just isn't enough real estate on a tablet, not to mention power.
As do I. Solidworks and Pro/E. No, they are not going to run on a tablet, but they are not tablet type of programs that you're going to run in an airport or in front of the TV are they? I have an "engineering laptop" so designated by my companies IT folks and it has Solidworks 2010 on it and a dual monitor adapter in the base for my desktop. I don't use Solidworks while travelling with this PC except to view files, nothing more. Can't work in the constraints of a laptop environment. Think of what the average person does with a laptop PC. Surf, email, maybe a report or basic presentation outline. Is away from your desk the optimum situation for creating great anything? Not for me at least. While my laptop stays in the bag until needed, the tablet (iPad2 specifically) is the device of choice for things other than work.
One thing that has destroyed more American businesses than union labor and American management combined is the US government and its regulations.
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