Feeds

Dell, Gateway biz models to face shortage crunch

Compaq, HP, IBM to benefit

  • alert
  • submit to reddit

Secure remote control for conventional and virtual desktops

Another report from FHI Research has indicated that changes in the global market mean that direct sellers of PCs, including Dell, Gateway and Micron, are likely to suffer in the rapidly growing Asian market, while IBM, HP and Compaq will mop up in their wake.

The advisory notes that while Dell, Gateway and Micron have led in the direct business in the US, the success they have had in North America cannot be replicated in the fastest growing market for PCs, which is the Asian market.

The report says that the direct, build to order model, is "uniquely vulnerable" to supply shortages, disruptions and supplier price increases. However, Compaq, IBM and HP, each of which has preserved an indirect route to market and a build to inventory method, are likely to see strong and profitable growth unsurpassed in the last three years.

FHI Research claims that direct vendors wish the market to believe that their business model is applicable worldwide. And, while Dell is the most successful of the direct, build to order vendors, it alone has the financial strength and resources to make its business model work.

While Dell said in its most recent results that first quarter sales in Asia-Pacific and Japan had risen by 47 per cent, FHI claims that "the apparently impressive performance...in Asia-Pacific and Japan resulted in only a one per cent increase in total sales revenues from seven to eight per cent." FHI also claims that its European sales, measured in dollars, declined two per cent, quarter on quarter, year on year.

IDC figures show that total regional sales in this area grew by more than 43 per cent, amounting to 4.24 million units in the first quarter of this year. The growth in these Asian markets mean that Dell should have grown by 100 to 200 per cent during this period. Gateway and Micron, too, failed to make a breakthrough, the report claims.

The report says: "Far from things going well for Dell and Gateway, the data shows that their effort to penetrate international markets have been less than a total success. The inability of the direct, build-to-order model to successfully penetrate the fast growing Asian and European market have serious implications".

To penetrate the biggest growing markets, Dell will need to build a better infrastructure in both Asia and Europe, which will be time consuming and expensive, FHI says.

The current famine in components will have a negative effect on Dell, Gateway and Micron's supply chains, claims FHI Research, which will lead to spot shortages and "substantial price increases which they cannot necessarily absorb by tried and true techniques like stockpiling parts and building inventory".

Those factors mean that Compaq, HP and IBM, which have maintained such models, have a real chance to capitalise on the lucrative Asian and European markets, the report concludes. ®

Providing a secure and efficient Helpdesk

More from The Register

next story
The 'fun-nification' of computer education – good idea?
Compulsory code schools, luvvies love it, but what about Maths and Physics?
Facebook, Apple: LADIES! Why not FREEZE your EGGS? It's on the company!
No biological clockwatching when you work in Silicon Valley
Lords take revenge on REVENGE PORN publishers
Jilted Johns and Jennies with busy fingers face two years inside
Happiness economics is bollocks. Oh, UK.gov just adopted it? Er ...
Opportunity doesn't knock; it costs us instead
Ex-US Navy fighter pilot MIT prof: Drones beat humans - I should know
'Missy' Cummings on UAVs, smartcars and dying from boredom
Yes, yes, Steve Jobs. Look what I'VE done for you lately – Tim Cook
New iPhone biz baron points to Apple's (his) greatest successes
Sysadmin with EBOLA? Gartner's issued advice to debug your biz
Start hoarding cleaning supplies, analyst firm says, and assume your team will scatter
Edward who? GCHQ boss dodges Snowden topic during last speech
UK spies would rather 'walk' than do 'mass surveillance'
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
Three 1TB solid state scorchers up for grabs
Big SSDs can be expensive but think big and think free because you could be the lucky winner of one of three 1TB Samsung SSD 840 EVO drives that we’re giving away worth over £300 apiece.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.