Life After the PC: Diverse Solutions are key

Pricing wars between large PC manufacturers and clones or alternative machines, along with a decrease in demand by consumers, has hit the industry right where it lives ... and derives most of its profits. So what will IBM, Compaq, Dell and Gateway do now that the luster of buying a PC has worn off?

Get into the service business, naturally. Although it deals in software and not hardware, Microsoft recognized the need to transition to services with its new .NET strategy, and now hardware vendors are having to address similar potential profit centers.

At a recent trade show, for example, Compaq began to show customer-oriented devices like an MP3 player and a pager. When investors questioned the thin margin derived from products like these, Compaq responded by saying that the devices integrate with company partner service offerings, thereby creating some kind of revenue stream along the way.

Gateway is an example of one PC manufacturer that began to figure out early-on that it needed to change the traditional revenue model. It began pushing leases rather than purchase plans, and in the second quarter of 2000 alone, realized a 23 percent increase in gross margins.

You may like these other stories...

Regulatory compliance, risk management and cost-cutting are the big heartburn issues for finance execs in the C-suite. Yet financial planning and analysis—a key antacid—is insufficient.That's just one of the...
Continuing its efforts to simplify accounting procedures, the FASB has issued a proposed Accounting Standards Update on customer fees paid in a cloud computing arrangement. The newly-proposed update (Intangibles—...
How are you planning? What tools do you use (or fail to use) for forecasting? PlanGuru is a business budgeting, forecasting, and performance review software company based in White Plains, N.Y. AccountingWEB recently spoke...

Already a member? log in here.

Upcoming CPE Webinars

Sep 9
In this session we'll discuss the types of technologies and their uses in a small accounting firm office.
Sep 10
Transfer your knowledge and experience to prepare your team for the challenges and opportunities of an accounting career.
Sep 11
This webcast will include discussions of commonly-applicable Clarified Auditing Standards for audits of non-public, non-governmental entities.
Sep 24
In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards. A dashboard condenses large amounts of data into a compact space, yet enables the end user to easily drill down into details when warranted.