David S. (1),
About a year ago, I made an argument on this thread (Fred F. are you still reading) that EVENTUALLY, the finished goods manufacturers (the box makers), would win the brand equity in the PC product category, as they have in every other consumer category. At the time, I asked the question, can you name any other component manufacturer that commands more brand loyalty than the finished goods manufacturer. Never got a satisfactory answer.
Of course the box makers are going to strive to be THE BRAND, until they get to that point, they can't command a brand premium, they really can't control their own future. As long as the consumers main concern is to buy a Pentium rather than a Compaq, they have secondary brand consideration, and are subject to increased price competition. If somebody else is selling a pentium for less, and that is the consumers main concern, they will comprimise on the secondary brand (Compaq). Compaq seems to be particularly irritated with this situatation, to their credit as a company.
I still think Intel and Pentium are more important brands to the consumer. I believe Compaq is making another strategic mistake. I also believe that eventually, the box makers (finished goods) will win the consumer's loyalty, and will benefit from the premiums that Intel currently enjoys.
John |
