What's in a Name?

This New York Times article (free registration required) tells the story of a Taiwanese computer manufacture. What makes them special? They make much of the hardware in major brand PCs, including those from Dell and Apple.

In an effort to cut costs, many of these companies are outsourcing most--if not all--of their work to companies like Quanta. Regardless of whether you purchase a Dell notebook or an Apple iMac, the systems are built on the same assembly line.

This is an extension of the by now familiar adage that "the only thing name brand about name brand PCs is the label on the outside of the box." The argument stems from the premise that though one computer may contain the same USR modem, ASUS motherboard, nVidia chipset video card, etc., as another, the consumer pays more for that PC if it comes from a major brand vendor.

Of course, this ignores the relative quality of service that one company offers in comparison to another. However, anyone who has been told that the motherboard in their new computer, which just showed up DOA on their doorstep, is a "user serviceable part" (i.e. fix it yourself and stop calling us), may argue that the major brand computer companies have some work to do in this area.

The service question aside, to give the illusion that they are as cheap or cheaper than equivalent PCs, the major brand vendors usually maintain a line of low-end computers. The low end computers bear the major brand label but lack any name brand components inside. They can be easy to spot since the advertisements generally list things like the speed of the modem instead of its brand name.

This is the beginning of a cycle almost every major brand PC company goes through. Eventually, consumers end up purchasing more of the major brand's low end PCs than their high end product (After all, they both have a 56K modem. Why should I spend more on that other one?). And so, the company goes from being known for selling cheap (as in price) computers to cheap (as in quality) computers. If the major brand company is lucky, they survive to repeat the cycle.

When companies start advertising the color of their computers rather than the underlying architecture or speed of the various components, it becomes clear that computers are on their way to becoming a commodity item. However, we're not there yet. So, in the meantime, when purchasing a computer for your home or business, look past the label on the outside of the box and ask for the brand names of the components inside the computer.

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