Yeald: Commoditized PC Market Favors Apple, Sony Over Dell, HP

by , 8:15 AM EDT, August 20th, 2004

Yeald has published an editorial that says Sony, Apple and the Chinese are preparing to boot Dell and HP. According to the article, the increasingly commoditized PC market will develop a sharp dichotomy between ulra-cheap and lifestyle computers. Marcel van Leeuwen, CEO of Yeald, writes that neither HP nor Dell are ideally suited to compete in either market in the long run, but that Apple and Sony are well-positioned as lifestyle brands, while the Chinese will be able to out-cheap Dell. From the article:

Some commodity markets allow for the existence of a premium segment. The premium is based on perceived advantages that aren't based on the product's primary functions but on superimposed impressions such as design, name and perceived associations, like success and youth.

Since computers carry out applications that are important to users, and they are being seen with their computers, it is very likely that the market will have a premium segment based on lifestyles, both in leisure and professional dimensions.

Therefore, the market is likely to be divided between discount products and lifestyle products. Dell isn't very well positioned for any of these two segments. Neither is HP.

Further comments in the full article about Apple are general in nature, but deal with the company's success in branding, and how that will help both Apple and Sony.

Yeald is a publication whose stated purpose is to foster dialogue between shareholders and companies. The editorial we mention is part of a series on the future of the PC market, including an article explaining why further commoditization hurts Dell, and issues that Yeald thinks HP is facing.

The Mac Observer Spin:

This is the first time we have encountered the idea that the commiditization process that Dell has worked so hard to achieve could actually hurt the company in the long run. On the surface, it seems backwards, but the point made in the dedicated article on the issue is that at some point Chinese manufacturers are going to be able to crank out PCs that people care little for and are sold in supermarkets far cheaper than Dell can sell it to you directly. It's an interesting thought, to say the least.

We also want to point out that the folks at Yeald are not saying that Apple is going to be able to beat Dell, but rather that Apple (and Sony) are going to be left competing in a different space while Dell gets trounced by the Chinese. This gells with what we have said for many years, that Apple has been changing the rules by which it competes, eschewing the cheap battle with Dell altogether.

Yeald Article