Is Samsung aiming to snap up HP's PC business?

[DainBramaged]

If Hewlett-Packard sells off some or all of its non-printing consumer hardware business, the most likely buyer is probably Samsung. And the Korean hardware giant has reportedly reached out to Taiwanese notebook vendors to explore just that.

According to Digitimes’ sources, Samsung met with top HP notebook contractor Quanta Computer, as well as Compal Electronics and Pegatron Technology, to discuss outsourcing notebook orders. All three companies are based in Taiwan, while Samsung currently manufactures all of its computers in mainland China.

To these sources (upstream vendors in the PC component industry), this signals something bigger than just Samsung trolling for new subcontractors: Samsung “seem(s) like it is already in preparation to take up Hewlett-Packard’s (HP’s) PC business.”

It is best known for its wide range of consumer electronics hardware, but Samsung already ships 10 million laptops annually (a projected 16 million-17 million this year), still a fraction of the 64 million PCs and 40 million laptops HP shipped in 2010. Samsung is also a leading manufacturer of memory, hard drives, screens, batteries and other computer components; control of HP’s PCs would give them a huge outlet for those products and plenty of opportunities to cut costs through vertical integration. Finally, unlike HP, Samsung is firmly committed to (and has found great success in) low-margin, high-volume hardware.

http://arstechnica.com/gadgets/news/2011/08/is-samsung-aiming-to-snap-up-hps-pc-business.ars

[KurtNYC]

1. Moving production to Taiwan would increase Samsung's costs

by 20% or more. The laptop market is very thin margin business right now. Windows Vista and the economy have killed consumer appetite for a new laptop every 2 years. And laptops just aren't sexy anymore.

Samsung is smarter than this.

[DainBramaged]

2. I completely disagree, but who cares what I think, right?

I have a pretty good handle on the PC business, but you're the expert....


http://www.etforecasts.com/products/ES_pcww1203.htm

[frylock]

3. in 5 years you will be teleporting to work on your ipad

[snooper2]

5. Then you should know the PC industry is just about dead...

You don't need a huge fucking tower anymore. Everyone will have a tablet in the 5-10 years---


Your tablet will also be your phone, video phone that is. With full content delivery---One number will ring your house, work, mobile- Oh wait, we already do that :)

Times are a changin

[KurtNYC]

12. I didn't say anything personal about you so not sure why you

take this disagreement personally.

HP is shedding the PC branch because there is no money left to be made in it. Thin margins:

"Hewlett-Packard's abdication of the PC business is the latest blow to an industry reeling from paper-thin margins and a massive migration to mobile computing."

http://www.usatoday.com/tech/news/story/2011/08/Hewlett-Packard-to-end-mobile-businesses/50043378/1

Taiwan costs are at least 20% higher than China (this shows personal cost of living numbers but cost of manufacturing mirrors these numbers):

http://www.numbeo.com/cost-of-living/compare_countries_result.jsp?country1=China&country2=Taiwan

I don't claim to be an expert but I worked in marketing for Gateway computer 10 years ago when the bottom fell out. It's no secret that PC (the hardware) are sold on razor thin margins. Software, service and peripherals are where the money is made. And for HP -- printer ink at $8,000 per gallon.

[Sen. Walter Sobchak]

15. The Taiwanese ODM's also manufacture on the mainland,

Foxconn for instance, the largest private employer in China is based in Taiwan. However it is possible to manufacture at a lower cost in Taiwan than on the mainland. Taiwan however has seriously cramped down on added manufacturing due to water shortages in the Hsinchu region.

I have been to a factory where laptops were made for several big names and they aren't touched by human hands until the LCD, hard drive, memory and CD-ROM is installed and various ribbon cables are slid into place. Testing and packaging was automated as well.

While many factories in China are something out of the 1970's

[Romulox]

4. Why? The PC business appears to be dying, to me.

I understand PCs aren't going away any time soon, but the period of high growth of PC sales appears to be over. PC gaming is nearly dead, and no "killer apps" have issued for desktop computers in some time.

In 1999, I was surfing, sending emails, and composing word documents on my PC. In 2011? The same, plus youtube. Nearly any PC made in the last 10 years can handle the load.

[DainBramaged]

7. 363 million PC's were sold worldwide last year

and that was up about 10% over 2009 and does NOT include tablets. PC gaming is not nearly dead, and the most anticipated game of he year Diablo III will garner 12-15 million subscribers world wide upon release.


Just because the kids who play console games once and trade them in seem to dominate stores like GAmeStop, if the industry was dead, hardware upgrades would cease.

But what do I know.


Tablets will become an adjunct to PC's, because the one thing people can't do is carry around 22" screen tablets. And unless it's one of the Dell, ACER, Asus or HP laptops shrunk into tablet form, other than casual online gaming, they aren't the same. And NO ONE buys a big tower anymore, nice powerful compact systems have been available for years.




Once again facts win over assumption. because the people who scream the PC is dead the loudest don't buy squat or keep up with technology.

[Romulox]

9. As your chart showed, each one of those PCs are selling for less and less though...

My guess is that demand in China, India, Brazil will remain robust for some time. In the developed countries, however, PC computing has lost its luster as a consumer technology.

"does NOT include tablets"

Right. We're talking about desktops, laptops, and netbooks (haven't heard that word in a year or so!)

"PC gaming is not nearly dead, and the most anticipated game of he year Diablo III will garner 12-15 million subscribers world wide upon release."

Come on now. I was a PC gamer back in the day. The amount and quality of releases is minuscule in comparison to the '80s and '90s. Most "PC" games these days are ports of console games (e.g. Deus Ex, From Dust.)

"Tablets will become an adjunct to PC's,"

I disagree. They will largely replace PCs.

" nice powerful compact systems have been available for years. "

I'm typing this on an Imac. However, try buying a "nice" all in one windows based PC at Best Buy, the only remaining big box PC retailer. Hard to do--you better know what "discreet graphics" mean if you want to play the aforementioned Diablo III!

"Once again facts win over assumption. because the people who scream the PC is dead the loudest don't buy squat or keep up with technology."

Now YOU'RE the one making assumptions. I buy plenty of tech stuff. That's why I can see that modern PC technology suffers massively from diminishing returns at this point.

[DainBramaged]

10. I can easily refute every one of your points, but I'm at work

One word


Newegg.....


And the new Mac's are extremely powerful in very small packages.........but what do I know....

[Romulox]

11. You're right on this point. The BEST "all in one" windows PCs for sale at Best Buy?

An Imac with Bootcamp. That's kind of sad.

[DainBramaged]

13. Let's refute everything you say now that I'm home

PC sales in this country were up over 10% last year over 2009 in spite of your (and others) claim the business is dead. It's matured. The PC is an appliance. But to corporate America, it's replaced every two years sometimes three, simply because software, requirements, and wear and tear dictate it.


As a computing technology it has not lost it's luster. Try doing anything other than an e-file for your taxes and you'll realize pretty fast that your statement is patently wrong.

Your problem with PC games, you WERE a gamer back in the day. And those crappy pieces of junk you can find on GOG games now for $5.99 were PC gaming in it's infancy. If console gaming (and tablets) are all that, why can't you play World of Warcraft, Guild Wars, Warhammer 40,oo0, any of a dozen games hosted by Steam, etc etc etc. The releases may be minuscule but the quality is spectacular. Civilization V was the BEST new release of 2010, Dragon Age notwithstanding. And what about Bioshock, made FOR THE PC??? I guess that didn't count either. And the game that set the standard for benchmarks, Crysis, it ain't nothing like from back in the day.

Tablets will never replace a PC, simply because the computing power available can't be stuffed into a tablet. And if tab;ets/notebooks/netbooks (I have two, one I use at work and one I use on trips and they are STILL selling very well) are supposed to replace PC's as we know them, why are we still selling tens of millions of PC's to consumers AND corporations? t isn't hard to understand.

The most powerful Mac will never be as powerful as a much more powerful PC at half the cost. You're paying for style, period. I can buy a VERY nice Windows PC all in one for HALF the price of even the current hardware comparable Macs:

http://www.newegg.com/Product/Product.aspx?Item=N82E16883147824 and it doesn't have discreet graphics.

As to your last sentence, the difference between you and me is I build, you buy.


Be well my friend.

[Romulox]

18. Civ 5 ain't great. Civ 2 was magic.

"As to your last sentence, the difference between you and me is I build, you buy."

Not so. I've built most of my PCs. Just haven't felt the need to do so during the Core/Core 2/iX era (been playing with Macs since they went Intel, but I have a couple Win 7 laptops.) In fact, I'm REALLY tempted to go to a tower and build a Hackintosh. The ONLY thing holding me back is the the thought of how loud the fans were on my last tower style PC.

"Be well my friend."

You too! :toast:

[Occulus]

16. "PC gaming is nearly dead"

:rofl:

Haven't been a gamer for a while, eh?

[Romulox]

17. I'll stand by that statement. If you love WoW, you're happy.

If you love XCOM: UFO Defense or Master of Orion, e.g., things are pretty grim.

It's ok if you like FPS ported from XBOX, though.

[NNN0LHI]

6. I remember a few times people here were getting nervous that there was going to be war in Korea

Told them to relax because the chaebol were not going to empty out their factories and send their sons and daughters off to needless wars to be killed like we do.

Chaebol has learned to fight any future wars in their factories with exports. And they are winning that war.

Don

[DainBramaged]

8. So true. Samsung is so vertically integrated they will make a hefty profit

on HP's designs. And in spite of the noise the tablet fanbois make, THE REAL WORLD of corporate America will never run on tablets.

[Ohio Joe]

14. Looks like the answer to that is no.

http://www.bgr.com/2011/08/24/samsung-confirms-it-will-not-buy-hps-computer-business/#utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TheBoyGeniusReport+%28BGR+%7C+Boy+Genius+Report%29