Linked by Thom Holwerda on Fri 16th Oct 2009 16:16 UTC
Hardware, Embedded Systems And it's that time of the, eh, quarter again. The third quarter of 2009 has ended, so IDC and Gartner both published their figures on marketshare and sales. The big news is that Acer has surpassed Dell and is now the number two PC manufacturer in the world.
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Unsure
by Leroy on Fri 16th Oct 2009 16:51 UTC
Leroy
Member since:
2006-07-06

why these stories always paint netbooks as poor margin sales. That is what they used to say about desktops. And if netbooks made so little money, why keep making them. Why! because they do make money. These analysts are comparing todays prices with the greed of the 80s. Back then PCs cost more than high end refrigerators.

I happen to own an Aspire One and love it. It does what I need.

Reply Score: 3

RE: Unsure
by theTSF on Fri 16th Oct 2009 18:01 in reply to "Unsure"
theTSF Member since:
2005-09-27

Margins are not profit. You can make money with low margin products. However you will need to sell a lot of units.

Back in the mainframe days a company who sells a mainframe could get 50% margins on their mainframe so they can sell a small volume and make a lot of money. However if you selling PC's and you have 5% margins on them. then you will need to sell a lot more taking more effort.

So say 1 Mainframe cost 1 Million to the customer. The company makes 500k

To do this for a $1000 PC you get $50 in margins so you will need to sell 10000 units. And selling that many units is much harder as you will need to sell $10,000,000 of product vs. $1 million. So you need to work 10x as much to make the same money

Reply Parent Score: 4

RE[2]: Unsure
by theosib on Fri 16th Oct 2009 18:54 in reply to "RE: Unsure"
theosib Member since:
2006-03-02

Don't forget the support costs. More units means more users having problems, calling in to get help. High-volume mass-produced often cut corners in production, making the probability of failure higher. And that probability of failure applies to more units, making the number of failures vastly higher than the low-volume counterparts.

Sell 100,000 units at $50 margin, and you make $5 million, which you can quicky lose to tech support salaries and warranty replacements.

Reply Parent Score: 2