Do you have some info on who the market share leaders are for the <$1k PC so far?
Boards are not a dead end, every box needs a board and somebody has to make them. However, motherboards are about the lowest margin boards around, and I agree that this move is not in itself likely to be profitable for DIMD.
DIMD does not have the speed, vision, or talent, and probably not the cash reserves, to remake themselves into another type of company. It has been touch & go hanging on to their own market against Creative & STB.
I don't see how they could follow the strategy you suggest. Look at the board business from the PC maker's point of view - buy cheap stuff from Taiwan, or slightly better stuff from DIMD, stick it in a box, sell it. Outsource the whole business starting at the bottom (mfg labor) and working your way up, ultimately keeping it together with a vision, a good operations team and a strong brand name.
If DIMD wanted into imaging, they would have to spend megabucks building expertise and brand name so they could justify the markup on OEM'd products &/or have some superior home-grown products. The problem is, all the players in that market are much bigger and have much better brand names already. I am referring to Kodak, Sony, HP, and so on.
I think a better move is to target dirt-cheap MM game/internet PC's for home customers, becoming a box maker at the very low end. It is an easy move from here. You refer to this as the set-top market, but set-tops will be bought by the millions by one big company from another - DIMD will not qualify. But they can make them for retail, Web direct, and infomercial sales. |
