PC Makers' Changing Faces, Apple's Coming 'Bypass Vista' Campaign
Feb 26, 2007 4:00 AM PT
The technology world will be changing a lot this year, and I figured this would be a good week to talk about some of the changes going on at a few of the major PC vendors that will make the next few months -- and particularly the second half of the year -- more interesting.
Right now, HP is the poster child for success. With solid financials, it is setting an example that Dell once set, and this lesson isn't lost on the other players.
In addition, Apple is clearly planning a surprise for Microsoft in March that has a lot to do with Leopard. Tactically it will clearly slap Microsoft hard, but I wonder if it won't strategically be more like Pearl Harbor was for Japan, and wake the sleeping giant.
Dell's Second-Half Strategy
Michael Dell is back, and boy is he pissed. He has been putting in place executives that represent the cream of the crop in terms of logistics, where Dell still is the leader but with a shrinking margin, and consumer, where HP has been schooling Dell rather hard over the last year.
The end result should be a more efficient Dell, which -- from a financial perspective -- probably won't show real benefits until around the end of the year, since the related changes take time to plan and implement before they can generate results.
For those of us who buy products, expect to see some interesting things from Dell as it positions itself more powerfully against retailers like Best Buy, and builds out a more complete line of products from third-party vendors like Sony.
I expect, just as Best Buy does, that Dell will begin offering third-party products with its own unique spin to provide added value, and that it will start showing up more at retail locations -- though it is still not clear whether it will go as far as broadly opening its own stores as Apple has successfully done.
On the product side, expect a sexier line of consumer-based offerings as it moves to embrace what HP has done in this space and to extend beyond it. Expect Dell to stretch a bit.
Historically, there has been little comparison between Apple and Dell with regard to design, but this is due to change, and we are already seeing some Dell offerings -- the XPS brand and the new 27-inch monitor, for example -- that are as distinctive and good-looking as anything Apple offers.
Gateway Increases Focus
Gateway is also focusing more on the very lucrative consumer market and shifting resources to create products that it will favor. While it doesn't yet have the design focus that Apple has or Dell is developing, Gateway demonstrated some of its potential over the last two years by having the leading 22-inch and then 23-inch monitors on the market.
Also, like Dell, it has increased its focus on logistics. Its CEO is considered to be one of the leading experts in that space, which should help the company control costs and reduce product shortages during critical sales periods. I've seen some prototype work Gateway has done, and the products -- if they come to market -- are visually as stunning as Apple's similar offerings, with much better ergonomics.
Gateway, with its gaming rig at the end of the year, actually outperformed Dell's stunning XPS box and sold at a lower price, suggesting a strategy of placing what goes in the box ahead of how the box actually looks.
This kind of thing has worked for the car industry in the past, which has brought out and successfully sold performance-oriented family sedans for those more interested in going fast while saving money, than in merely looking like they are going fast.
Lenovo: Fixing the Plumbing
It is hard to explain, let alone imagine, how painful it must be for Lenovo, which tried to merge IBM's PC division with its parent company in China. The technology that IBM uses internally is generally between 10 and 20 years out of date, which makes it incredibly difficult to get things to talk to each other even within IBM -- let alone trying to connect to Lenovo's own systems.
Logistics has been a nightmare, and if it weren't for some incredibly heroic efforts by Lenovo's mixed IT staff, it probably couldn't build or report anything timely.
Lenovo is currently completing a rip-and-replace process with its IT infrastructure, and when it is done, its ability to track, manage and report its company performance will have gone up astronomically, and it will probably also have much happier employees. No one wants to work on IT systems that belong in a museum.
Given how antiquated its systems were, it is actually amazing that it has done as well as it has so far. We'll save a discussion on why IBM doesn't use its own current technology for another time.
While Lenovo China has had a number of very cool consumer products -- from phones to PCs -- in the Chinese market, few exist outside of China, and virtually none are sold in the U.S.
Expect a strategy of change in the U.S. over the next 18 months, as Lenovo starts bringing its consumer expertise to bear on markets outside of China and begins to stretch to its potential.
However, Lenovo doesn't have unlimited time. Both Dell and HP, in particular, are moving incredibly fast -- and while they are largely targeting each other they could take out the smaller players as collateral damage.
HP: Knocking the Cover off the Ball
HP's financials, with some exceptions, are simply stunning. With very strong financials -- particularly in the PC space -- Mark Hurd is showing the CEOs both in his industry and outside of it just how the job should be done.
The company has shown a solid focus on fundamentals, and from logistics to product design can argue dramatically improved company performance. On the printer side, Kodak did recently show up with some surprisingly credible competitive products -- which could do some damage in the future. Overall, this division remains at the top of its game -- particularly at the high end of that market.
PC designs have improved dramatically over the last year, as has related marketing. After putting ex-Apple executives in key marketing spots, HP has rolled out one of the strongest demand-generation campaigns in the industry for PCs and printers.
The new Touchsmart PCs are as good or better than any similar product from Apple, and are differentiated from all other vendors -- though we are still waiting to see the impact from the VooDoo acquisition.
HP was clearly the star of this group and solidly passed IBM, which has led this industry for over 40 years, as the largest tech company in the world. However, Apple has a surprise coming in March, and that surprise could be a wake-up call to the rest of the PC players -- and especially Microsoft.
Apple's 'Bypass Vista' Market Surprise
For some time, I've known that Apple has a plan to attack Vista head on, and we've seen parts of that in Apple's Mac vs. PC advertisements. Apple has also apparently promoted videos that position Vista as a Tiger clone on sites like YouTube.
Apple is trying to get people to accept that Vista and Tiger are almost identical before it obsoletes Tiger and positions Leopard as a better -- read vastly more advanced and easier to use -- choice than Vista.
I understand what Apple has done to Leopard visually with animation, and video is way over the top. Given a hardware refresh is overdue, I'm still expecting a massive Apple hardware refresh when Leopard officially lunches.
These animation and video elements will cross from the OS into applications -- which have been held back to support the launch -- like iLife and iWork, showcasing the mistake that Microsoft may have made separating Office 2007 from Vista.
However -- and this is where the real power is -- if I'm reading Apple correctly, it will be showcasing a level of Windows interoperability that has never been seen from the Mac before, and without leveraging Office for the Mac.
Specifically, Leopard will plug directly into Exchange and may have a level of compatibility with the Office document formats we haven't seen outside of Corel's WordPerfect Office.
The last time I saw an effort to displace the PC with Macs in business fail, the cause was the lack of Exchange compatibility. If this is fixed, we could see Macs actually move in business again.
Leopard and its surrounding applications have been focused almost specifically to take Vista out at the knees, and I don't think we've seen either Microsoft or Apple with this kind of focused effort on the other -- ever.
This is all supposed to happen at the end of March, when the post-launch problems with Vista are at their peak and Microsoft is the most vulnerable. Apple isn't large enough to terminally hurt Microsoft, but if it is successful, the combination of financial damage and embarrassment it does to the much larger company could be unprecedented.
The only problem for Apple is that it may sting Microsoft hard enough for that company to finally focus again on Apple and the desktop -- and that, my friends, could be great for Windows users and PC OEMs (original equipment manufacturers), but not that great for Apple in the long term.
It does give us a whole 'nother reason besides getting warm for looking forward to April.
Rob Enderle is a TechNewsWorld columnist and the principal analyst for the Enderle Group, a consultancy that focuses on personal technology products and trends.