Intel Discovers Capitalism

Discussion in 'NZ Computing' started by Lawrence D'Oliveiro, Mar 20, 2008.

  1. Oh look
    <http://arstechnica.com/news.ars/post/20080320-classmate-pc-rated-e-for-everyone-intel-to-sell-to-public.html>,
    Intel has finally realized that its Classmate PC isn't just suitable for
    third-world markets, there might actually be a tidy profit in offering it
    to first-world customers as well.

    All I can say is, it had better hurry. Others have already worked out that
    the Asus Eee has had this segment to itself for too long, and are bringing
    competitors to market (Everex, HP, Shuttle, MSI etc). I have a feeling it's
    going to get a bit crowded...
    Lawrence D'Oliveiro, Mar 20, 2008
    #1
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  2. Lawrence D'Oliveiro

    thingy Guest

    Lawrence D'Oliveiro wrote:
    > Oh look
    > <http://arstechnica.com/news.ars/post/20080320-classmate-pc-rated-e-for-everyone-intel-to-sell-to-public.html>,
    > Intel has finally realized that its Classmate PC isn't just suitable for
    > third-world markets, there might actually be a tidy profit in offering it
    > to first-world customers as well.
    >
    > All I can say is, it had better hurry. Others have already worked out that
    > the Asus Eee has had this segment to itself for too long, and are bringing
    > competitors to market (Everex, HP, Shuttle, MSI etc). I have a feeling it's
    > going to get a bit crowded...


    Considering I think the EEE is overpriced, yes (but then Im not in the
    market for a handy sub-laptop)...in saying that its predecessors like
    tablets etc were way over priced, fragile and too limited....If I was a
    Linux support guy wandering about Wellington (and especially if on call)
    I'd buy one...though a USB key with VMware's ACE on it is even smaller.

    So some competition might see some keener prices, it will be interesting
    to see how the Linux powered ones stand up to the Windows ones...$50 or
    even $30 for a OEM of XP/Vista...CE? adds a lot to a $500 unit.....not
    to mention the bigger need for ram and "hd" just to boot.

    regards

    Thing
    thingy, Mar 20, 2008
    #2
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  3. In article <frul91$n6i$>, Lawrence D'Oliveiro did write:

    > Others have already worked out that
    > the Asus Eee has had this segment to itself for too long, and are bringing
    > competitors to market (Everex, HP, Shuttle, MSI etc). I have a feeling
    > it's going to get a bit crowded...


    Another one joining the fun: ECS
    <http://www.reghardware.co.uk/2008/03/20/ecs_spills_g10il_beans/>.
    Lawrence D'Oliveiro, Mar 21, 2008
    #3
  4. Lawrence D'Oliveiro

    whoisthis Guest

    In article <frul91$n6i$>,
    Lawrence D'Oliveiro <_zealand> wrote:

    > Oh look
    > <http://arstechnica.com/news.ars/post/20080320-classmate-pc-rated-e-for-everyo
    > ne-intel-to-sell-to-public.html>,
    > Intel has finally realized that its Classmate PC isn't just suitable for
    > third-world markets, there might actually be a tidy profit in offering it
    > to first-world customers as well.
    >
    > All I can say is, it had better hurry. Others have already worked out that
    > the Asus Eee has had this segment to itself for too long, and are bringing
    > competitors to market (Everex, HP, Shuttle, MSI etc). I have a feeling it's
    > going to get a bit crowded...


    A rush to cheap, low (no?) profit hardware will not last long.
    Apple has captured 14% of the hardware market by volume but 25% by $
    value.
    Come the recession they have about US$20 billion to ride it out, that is
    the whole point of profit.

    History is littered with the corpses of failed computer companies, some
    used to be household names, anyone remember Sinclair ?
    whoisthis, Mar 21, 2008
    #4
  5. In article <>, whoisthis did
    write:

    > In article <frul91$n6i$>,
    > Lawrence D'Oliveiro <_zealand> wrote:
    >
    >> Others have already worked out
    >> that the Asus Eee has had this segment to itself for too long, and are
    >> bringing competitors to market (Everex, HP, Shuttle, MSI etc). I have a
    >> feeling it's going to get a bit crowded...

    >
    > A rush to cheap, low (no?) profit hardware will not last long.


    I think Asus, for one, is making a nice profit on its Eee machines--they are
    well-made products after all, not cheap-feeling in any way. Which is why so
    many competitors are scrambling to join in the fun.

    The only company likely to lose (both money and market share) out of this
    shift is Microsoft. Oh, and possibly...

    > Apple has captured 14% of the hardware market by volume but 25% by $
    > value.


    That's US-only. Worldwide they're still stuck at around 3%. And they have no
    product to compete in this fast-growing category.

    > Come the recession they have about US$20 billion to ride it out, that is
    > the whole point of profit.


    Apple were highly profitable in the early 1990s, too, even as they were
    losing market share.

    > History is littered with the corpses of failed computer companies, some
    > used to be household names, anyone remember Sinclair ?


    Or the G4 Cube?
    Lawrence D'Oliveiro, Mar 21, 2008
    #5
  6. Lawrence D'Oliveiro

    thingy Guest

    whoisthis wrote:
    > In article <frul91$n6i$>,
    > Lawrence D'Oliveiro <_zealand> wrote:
    >
    >> Oh look
    >> <http://arstechnica.com/news.ars/post/20080320-classmate-pc-rated-e-for-everyo
    >> ne-intel-to-sell-to-public.html>,
    >> Intel has finally realized that its Classmate PC isn't just suitable for
    >> third-world markets, there might actually be a tidy profit in offering it
    >> to first-world customers as well.
    >>
    >> All I can say is, it had better hurry. Others have already worked out that
    >> the Asus Eee has had this segment to itself for too long, and are bringing
    >> competitors to market (Everex, HP, Shuttle, MSI etc). I have a feeling it's
    >> going to get a bit crowded...

    >
    > A rush to cheap, low (no?) profit hardware will not last long.
    > Apple has captured 14% of the hardware market by volume but 25% by $
    > value.
    > Come the recession they have about US$20 billion to ride it out, that is
    > the whole point of profit.
    >
    > History is littered with the corpses of failed computer companies, some
    > used to be household names, anyone remember Sinclair ?


    Sinclair was never really a business corporation, it really sold
    consumer items...Amstrad might be better or,

    Data General, Dec, Wang....all names of the past, big corporations that
    died...what does this say about MS, Sun, Oracle as OSS equiv's come up?

    MS did well because it was dirt cheap compared to Unix Risc, OS2 and
    mainframes, now how ever it isn't the cheapest kid on the block....

    As for the rush to low cost hardware, IT is becoming commoditised, just
    like buying apples or steak, its sell volume and small margin. Yes Apple
    has a business but boutiques usually can sell small volumes at big
    margins. If the niche goes though....bye bye very quickly...

    regards

    Thing
    thingy, Mar 21, 2008
    #6
  7. In article <47e311ce$>, thingy did write:

    > Data General, Dec, Wang....all names of the past, big corporations that
    > died...what does this say about MS, Sun, Oracle as OSS equiv's come up?


    Those were minicomputer companies, that carved out a market by undercutting
    the low-volume, high-margin mainframes. Only to be undercut themselves by
    the high-volume, low-margin PCs.

    > MS did well because it was dirt cheap compared to Unix Risc, OS2 and
    > mainframes, now how ever it isn't the cheapest kid on the block....


    Microsoft has grown fat on volume. But in the same way the computer market
    originaly diversified into mainframes, minis, supercomputers, PCs,
    workstations etc, the PC market (which rendered most of the others extinct)
    is itself diversifying now, and Microsoft is having trouble adapting.

    > As for the rush to low cost hardware, IT is becoming commoditised, just
    > like buying apples or steak, its sell volume and small margin. Yes Apple
    > has a business but boutiques usually can sell small volumes at big
    > margins. If the niche goes though....bye bye very quickly...


    High volumes and low margins have been dominant in the PC hardware market
    for close to two decades now--that's not new. What's new is that prices
    have reached the point where software costs are becoming the largest item
    on the bill of materials. In other words, software margins now have to go.
    Hard to believe that Microsoft have been able to sustain a high-volume,
    high-margin business model for so long, but those days are drawing to a
    close.
    Lawrence D'Oliveiro, Mar 21, 2008
    #7
  8. Review <http://linuxdevices.com/articles/AT6425549202.html> of two more
    machines, the Zonbook and the Everex Cloudbook. The former is a
    conventionally-sized laptop, where you pay a subscription and the vendor
    ensures that everything just works. The latter is more directly a
    competitor in the Eee/Classmate category.
    Lawrence D'Oliveiro, Mar 21, 2008
    #8
  9. Lawrence D'Oliveiro

    Gordon Guest

    On 2008-03-21, whoisthis <> wrote:
    > In article <frul91$n6i$>,
    > Lawrence D'Oliveiro <_zealand> wrote:
    >
    >> Oh look
    >> <http://arstechnica.com/news.ars/post/20080320-classmate-pc-rated-e-for-everyo
    >> ne-intel-to-sell-to-public.html>,
    >> Intel has finally realized that its Classmate PC isn't just suitable for
    >> third-world markets, there might actually be a tidy profit in offering it
    >> to first-world customers as well.
    >>
    >> All I can say is, it had better hurry. Others have already worked out that
    >> the Asus Eee has had this segment to itself for too long, and are bringing
    >> competitors to market (Everex, HP, Shuttle, MSI etc). I have a feeling it's
    >> going to get a bit crowded...

    >
    > A rush to cheap, low (no?) profit hardware will not last long.
    > Apple has captured 14% of the hardware market by volume but 25% by $
    > value.


    I would say by spin, and human nature.

    > Come the recession they have about US$20 billion to ride it out, that is
    > the whole point of profit.


    well I'll be darned. Never thought of this idea before. I thought profit was
    to ensure that the company did not go bust.

    >
    > History is littered with the corpses of failed computer companies, some
    > used to be household names, anyone remember Sinclair ?


    So, you your point is? Apple is going to join them
    Gordon, Mar 21, 2008
    #9
  10. In article <>, Gordon did write:

    > I thought profit was to ensure that the company did not go bust.


    Really? I thought profit was to repay the investors for their investment.
    Lawrence D'Oliveiro, Mar 21, 2008
    #10
  11. Lawrence D'Oliveiro

    whoisthis Guest

    In article <47e311ce$>, thingy <thing@/dev/null> wrote:

    > whoisthis wrote:
    > > In article <frul91$n6i$>,
    > > Lawrence D'Oliveiro <_zealand> wrote:
    > >
    > >> Oh look
    > >> <http://arstechnica.com/news.ars/post/20080320-classmate-pc-rated-e-for-eve
    > >> ryo
    > >> ne-intel-to-sell-to-public.html>,
    > >> Intel has finally realized that its Classmate PC isn't just suitable for
    > >> third-world markets, there might actually be a tidy profit in offering it
    > >> to first-world customers as well.
    > >>
    > >> All I can say is, it had better hurry. Others have already worked out that
    > >> the Asus Eee has had this segment to itself for too long, and are bringing
    > >> competitors to market (Everex, HP, Shuttle, MSI etc). I have a feeling
    > >> it's
    > >> going to get a bit crowded...

    > >
    > > A rush to cheap, low (no?) profit hardware will not last long.
    > > Apple has captured 14% of the hardware market by volume but 25% by $
    > > value.
    > > Come the recession they have about US$20 billion to ride it out, that is
    > > the whole point of profit.
    > >
    > > History is littered with the corpses of failed computer companies, some
    > > used to be household names, anyone remember Sinclair ?

    >
    > Sinclair was never really a business corporation, it really sold
    > consumer items...Amstrad might be better or,
    >
    > Data General, Dec, Wang....all names of the past, big corporations that
    > died...what does this say about MS, Sun, Oracle as OSS equiv's come up?
    >
    > MS did well because it was dirt cheap compared to Unix Risc, OS2 and
    > mainframes, now how ever it isn't the cheapest kid on the block....
    >
    > As for the rush to low cost hardware, IT is becoming commoditised, just
    > like buying apples or steak, its sell volume and small margin. Yes Apple
    > has a business but boutiques usually can sell small volumes at big
    > margins. If the niche goes though....bye bye very quickly...
    >
    > regards
    >
    > Thing


    Their growth the last 12 months was over 65% as compared the to industry
    as a whole at about 8%.
    whoisthis, Mar 21, 2008
    #11
  12. Lawrence D'Oliveiro

    whoisthis Guest

    In article <frv8c5$30b$>,
    Lawrence D'Oliveiro <_zealand> wrote:

    > In article <47e311ce$>, thingy did write:
    >
    > > Data General, Dec, Wang....all names of the past, big corporations that
    > > died...what does this say about MS, Sun, Oracle as OSS equiv's come up?

    >
    > Those were minicomputer companies, that carved out a market by undercutting
    > the low-volume, high-margin mainframes. Only to be undercut themselves by
    > the high-volume, low-margin PCs.
    >
    > > MS did well because it was dirt cheap compared to Unix Risc, OS2 and
    > > mainframes, now how ever it isn't the cheapest kid on the block....

    >
    > Microsoft has grown fat on volume. But in the same way the computer market
    > originaly diversified into mainframes, minis, supercomputers, PCs,
    > workstations etc, the PC market (which rendered most of the others extinct)
    > is itself diversifying now, and Microsoft is having trouble adapting.
    >
    > > As for the rush to low cost hardware, IT is becoming commoditised, just
    > > like buying apples or steak, its sell volume and small margin. Yes Apple
    > > has a business but boutiques usually can sell small volumes at big
    > > margins. If the niche goes though....bye bye very quickly...

    >
    > High volumes and low margins have been dominant in the PC hardware market
    > for close to two decades now--that's not new. What's new is that prices
    > have reached the point where software costs are becoming the largest item
    > on the bill of materials. In other words, software margins now have to go.
    > Hard to believe that Microsoft have been able to sustain a high-volume,
    > high-margin business model for so long, but those days are drawing to a
    > close.


    I would disagree, it is free software that is a niche market, it is well
    designed integrated products that are thriving.
    whoisthis, Mar 21, 2008
    #12
  13. Lawrence D'Oliveiro

    whoisthis Guest

    In article <fruvtu$tf9$>,
    Lawrence D'Oliveiro <_zealand> wrote:

    > In article <>, whoisthis did
    > write:
    >
    > > In article <frul91$n6i$>,
    > > Lawrence D'Oliveiro <_zealand> wrote:
    > >
    > >> Others have already worked out
    > >> that the Asus Eee has had this segment to itself for too long, and are
    > >> bringing competitors to market (Everex, HP, Shuttle, MSI etc). I have a
    > >> feeling it's going to get a bit crowded...

    > >
    > > A rush to cheap, low (no?) profit hardware will not last long.

    >
    > I think Asus, for one, is making a nice profit on its Eee machines--they are
    > well-made products after all, not cheap-feeling in any way. Which is why so
    > many competitors are scrambling to join in the fun.


    >
    > The only company likely to lose (both money and market share) out of this
    > shift is Microsoft. Oh, and possibly...
    >
    > > Apple has captured 14% of the hardware market by volume but 25% by $
    > > value.

    >
    > That's US-only. Worldwide they're still stuck at around 3%. And they have no
    > product to compete in this fast-growing category.


    Worldwide their market share is growing too.
    Industry watchers may note that 6.81 percent is Apple's largest slice of
    the market for a decade, putting the company in second place behind
    systems from Microsoft.
    Apple's iPhone OS also grabbed a slice of share, taking 0.09 percent
    within the 'others' category, which also includes PlayStation (0.02
    percent), the Nintendo Wii (0.01 percent) and the Sun OS (0.01 percent).
    Net Applications surveys sample data from visitors to 40,000 websites
    operated by its clients. Results should be considered a snapshot of the
    scene, rather than hard and fast statistical analysis.

    Equally Apple has never competed in the low profit market, there are too
    many corpses of failed companies there already.

    >
    > > Come the recession they have about US$20 billion to ride it out, that is
    > > the whole point of profit.

    >
    > Apple were highly profitable in the early 1990s, too, even as they were
    > losing market share.


    Now they are even more profitable and rapidly gaining market share.

    >
    > > History is littered with the corpses of failed computer companies, some
    > > used to be household names, anyone remember Sinclair ?

    >
    > Or the G4 Cube?


    Or Digital research, Tandy, Commodore, Sinclair, Kaypro, Osbourne,
    Jupiter, Ohio, Visicalc, Dbase and thousands more. It is those who
    failed to do research rather than just copy who stagnated and died.
    One wonders how long Dell will be around or even AMD......
    whoisthis, Mar 21, 2008
    #13
  14. In article <>, whoisthis did
    write:

    > [Apple's] growth the last 12 months was over 65% as compared the to
    > industry as a whole at about 8%.


    65% of 2% takes them to just over 3%.
    Lawrence D'Oliveiro, Mar 21, 2008
    #14
  15. In article <>, whoisthis did
    write:

    > In article <frv8c5$30b$>,
    > Lawrence D'Oliveiro <_zealand> wrote:
    >
    >> High volumes and low margins have been dominant in the PC hardware market
    >> for close to two decades now--that's not new. What's new is that prices
    >> have reached the point where software costs are becoming the largest item
    >> on the bill of materials. In other words, software margins now have to
    >> go. Hard to believe that Microsoft have been able to sustain a
    >> high-volume, high-margin business model for so long, but those days are
    >> drawing to a close.

    >
    > I would disagree, it is free software that is a niche market...


    Asus' projected sales for its Eee models alone should just about match
    Apple's entire Macintosh production. Call that a "niche" market?
    Lawrence D'Oliveiro, Mar 21, 2008
    #15
  16. In article <>, whoisthis did
    write:

    > In article <fruvtu$tf9$>,
    > Lawrence D'Oliveiro <_zealand> wrote:
    >
    >> > Apple has captured 14% of the hardware market by volume but 25% by $
    >> > value.

    >>
    >> That's US-only. Worldwide they're still stuck at around 3%. And they have
    >> no product to compete in this fast-growing category.

    >
    > Worldwide their market share is growing too.


    Not by much that I've seen. Total PC sales for 2008 are projected at over
    300 million. Apple will be struggling to grab much more than 3% of that.

    > Apple's iPhone OS also grabbed a slice of share, taking 0.09 percent
    > within the 'others' category, which also includes PlayStation (0.02
    > percent), the Nintendo Wii (0.01 percent) and the Sun OS (0.01 percent).


    Again, those sound like US-only figures. As you know, the iPhone has only
    been much of a success in the US, not so much outside it.

    > Equally Apple has never competed in the low profit market, there are too
    > many corpses of failed companies there already.


    Who says low cost equals to low profit? Only if you've been accustomed to
    high margins. Both Apple and Microsoft have this problem.

    >> Apple were highly profitable in the early 1990s, too, even as they were
    >> losing market share.

    >
    > Now they are even more profitable and rapidly gaining market share.


    No sign of that, as I've pointed out above.

    >> > History is littered with the corpses of failed computer companies, some
    >> > used to be household names, anyone remember Sinclair ?

    >>
    >> Or the G4 Cube?

    >
    > Or Digital research, Tandy, Commodore, Sinclair, Kaypro, Osbourne,
    > Jupiter, Ohio, Visicalc, Dbase and thousands more. It is those who
    > failed to do research rather than just copy who stagnated and died.
    > One wonders how long Dell will be around or even AMD......


    And what research exactly has Apple been doing? Beyond how to make things
    thinner?
    Lawrence D'Oliveiro, Mar 21, 2008
    #16
  17. Lawrence D'Oliveiro

    whoisthis Guest

    In article <frvvf3$gds$>,
    Lawrence D'Oliveiro <_zealand> wrote:

    > And what research exactly has Apple been doing? Beyond how to make things
    > thinner?


    A LOT. Apart from IBM Apple owns more patents than all the other PC
    manufacturers put together (IIRC), and a LOT more than Microsoft.
    whoisthis, Mar 21, 2008
    #17
  18. Lawrence D'Oliveiro

    whoisthis Guest

    In article <frvv45$gds$>,
    Lawrence D'Oliveiro <_zealand> wrote:

    > In article <>, whoisthis did
    > write:
    >
    > > In article <frv8c5$30b$>,
    > > Lawrence D'Oliveiro <_zealand> wrote:
    > >
    > >> High volumes and low margins have been dominant in the PC hardware market
    > >> for close to two decades now--that's not new. What's new is that prices
    > >> have reached the point where software costs are becoming the largest item
    > >> on the bill of materials. In other words, software margins now have to
    > >> go. Hard to believe that Microsoft have been able to sustain a
    > >> high-volume, high-margin business model for so long, but those days are
    > >> drawing to a close.

    > >
    > > I would disagree, it is free software that is a niche market...

    >
    > Asus' projected sales for its Eee models alone should just about match
    > Apple's entire Macintosh production. Call that a "niche" market?


    Projected =! real, hell look at MS projected sales of vista.
    Given the very low specs I would suggest people will out grow it easily,
    or through ignorance buy because of the price without understanding its
    limitations. If they can keep up that growth for 3-4 years then that
    will be something worth noting, but we have had cheap hardware before...
    whoisthis, Mar 21, 2008
    #18
  19. Lawrence D'Oliveiro

    whoisthis Guest

    In article <frvv1b$gds$>,
    Lawrence D'Oliveiro <_zealand> wrote:

    > In article <>, whoisthis did
    > write:
    >
    > > [Apple's] growth the last 12 months was over 65% as compared the to
    > > industry as a whole at about 8%.

    >
    > 65% of 2% takes them to just over 3%.


    well all the figures I have seen give Apple 6%.... and growing at almost
    10 times the rate of the PC market.
    whoisthis, Mar 21, 2008
    #19
  20. Lawrence D'Oliveiro

    sam Guest

    whoisthis wrote:
    > In article <frvv45$gds$>,
    > Lawrence D'Oliveiro <_zealand> wrote:
    >
    >> In article <>, whoisthis did
    >> write:
    >>
    >>> In article <frv8c5$30b$>,
    >>> Lawrence D'Oliveiro <_zealand> wrote:
    >>>
    >>>> High volumes and low margins have been dominant in the PC hardware market
    >>>> for close to two decades now--that's not new. What's new is that prices
    >>>> have reached the point where software costs are becoming the largest item
    >>>> on the bill of materials. In other words, software margins now have to
    >>>> go. Hard to believe that Microsoft have been able to sustain a
    >>>> high-volume, high-margin business model for so long, but those days are
    >>>> drawing to a close.
    >>> I would disagree, it is free software that is a niche market...

    >> Asus' projected sales for its Eee models alone should just about match
    >> Apple's entire Macintosh production. Call that a "niche" market?

    >
    > Projected =! real, hell look at MS projected sales of vista.
    > Given the very low specs I would suggest people will out grow it easily,
    > or through ignorance buy because of the price without understanding its
    > limitations. If they can keep up that growth for 3-4 years then that
    > will be something worth noting, but we have had cheap hardware before...


    The ipod is cheap hardware, it is responsible for Apple's profitability
    sam, Mar 21, 2008
    #20
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