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Dell, HP look to slash R&D costs for 2009

updated 12:40 pm EDT, Thu September 25, 2008

Dell, HP to cut R&D costs?

Worldwide economic crises are beginning to have serious impact within PC builders Dell and HP, claims DigiTimes. The publication cites sources inside Taiwanese channel distributors, who say that both companies are looking to cut back on research and development for notebooks, which usually entails testing the performance and endurance of new parts. Because this is also done by the actual manufacturers (ODMs), sources say, Dell and HP believe they can scale back without hurting future products.

Details such as any possible job losses are unclear, but it is thought that ODMs will begin buying many of the parts needed on their own, choosing which suppliers to use. The number of ODM purchases could jump from 10 percent now to 20 percent in 2009, the sources suggest.

The situation contrasts starkly with Apple, whose Mac sales have been brisk, pointing to continually expanding profits. Apple is also known to pick virtually every component in a computer itself, down to processors and optical drives.



By Electronista Staff
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  1. climacs

    Forum Regular

    Joined: Sep 2001

    0

    in other words

    Dell and HP products are going to get even crappier.

  1. Rezzz

    Fresh-Faced Recruit

    Joined: Jan 2006

    0

    meaning..

    "cut back on research and development [..] which usually entails testing the performance and endurance of new parts"

    and to think, all these years I thought that was quality control. now I understand what R&D really is!

    little wonder PC companies don't innovate..

  1. JulesLt

    Fresh-Faced Recruit

    Joined: Jul 2005

    +1

    Cash in the bank . . .

    There are two things to do in a recession - once is to cut your R&D and the other is to increase it, as it's a perfect opportunity to get ahead of your rivals.

    The worrying thing is Dell talking about ODMs, as the whole essence of Dell's business model in the first place was around being the ODM and tight supply chain management, and cutting out the middle-man as much as possible.

    As they enter into retail and simply badging and reselling machines manufactured by others, all they can do is add 'brand value' - while at the same time, ODM firms like Asus are moving into selling machines under their own brand.

  1. slider

    Mac Elite

    Joined: Oct 1999

    +3

    Good News for Apple

    The last time the economy went into recession, Apple said and did innovate through this time and came out of the recession ahead of competitors. Assuming Apple does the same this time around (safe bet as Steve Jobs made such a point about this last time), Apple will pull even further ahead. I'd bet money Apple is smiling right now, even more market share to be had.

    HP and Dell would be wise to reconsider.

  1. loudpedal

    Forum Regular

    Joined: Oct 1999

    +1

    Let 'em go

    Dell's going to let the two people doing R&D go. All jokes aside, excellent point, slider.

  1. ender

    Junior Member

    Joined: Mar 1999

    0

    nice

    It's got to be nice to be Apple right about now. No corporate debt and, what, around $20 billion cash laying around. Not only can the invest and innovate their way through this mess, they can probably pick up some new technology on the cheap and make great new deals with their suppliers.

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