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Can Anyone Save Packard-Bell?

By Scott Kelby

(From Mac Today Magazine; reprinted with permission)

The other day, while reading another article designed to scare the pants off potential Apple customers and/or shareholders, I started wondering what life would be like if I somehow got a writing gig at a PC magazine. Besides having to wear the dorky-looking outfit, wire-rimmed glasses, and pocket protector, I'm certain that during my first day on the job I'd be handed a secret dossier that would include the closely guarded manual of rules for writing any article that mentions Apple Computer. It would include certain guidelines to follow, like "Any good news on Apple must be followed by the word 'but' and then a direct reference to either: (a) their small market share, (b) any quarterly loss in the past five years, or (c) Microsoft's dominance.

This manual provides PC-worshipping journalists with guidelines for "selective reporting" where only damaging facts and figures about Apple are allowed. The latest amendment to their manual is how they should refer to the Macintosh operating system. It must always be referred to as "outdated." And even though Windows 95 tries to emulate the Macintosh operating system, it must never, under any circumstances, be referred to as outdated. That would be blasphemy.

The more I thought about it, the more I realized that the Macintosh press needs a similar manual for writing about PC manufacturers. With that in mind, I decided to write a few news blurbs on some of the PC manufacturers so they'd get a little feel of that "selective reporting" from a Macintosh point of view.

Can Anyone Save Packard Bell?

Heavy competition and unexpectedly low holiday sales are taking their toll on some PC manufacturers and Packard Bell, once a shining star among PC clone makers, has fallen on hard times. The beleaguered company is struggling amidst rumors of bankruptcy, suffering a dwindling market share, and staggering from being rated at the bottom of the heap for consumer loyalty (when polled earlier this year, less than 35% of Packard Bell owners would buy another Packard Bell). The public may be asking, "Can anyone save Packard Bell?" A recent article detailing Packard Bell's woes in the December 30 issue of Business Week magazine noted that "Many experienced consumers shied away from Packard Bell, citing its reputation for shoddy quality and indifferent service and support."

That same article noted that Packard Bell "has watched its sales and market share slowly slide since last January." It pointed out that in the first ten months of '96 alone, Packard Bell had already lost 8% of their market share. In a business where market share is everything, a dramatic drop like this could spell doom. Couple this with lagging sales (they fell $1 billion short of their sales estimate) and a widely held perception of shoddy quality and poor customer support, we can't imagine a scenario where they'll be able to survive in the long haul. Packard Bell, unlike rival Apple computer, which won the J.D. Power & Associates award for overall customer satisfaction and has over 27 million fiercely loyal customers, has quite an uphill battle to survive. And if they don't survive will anybody really care-or will they just buy a cheap PC clone from somebody else?

Can Anybody Save Gateway 2000?

Recent television advertisements by upstart PC clone maker Gateway 2000 have raised serious questions about the company's future. The advertisements point to sales figures of only one million units, whereas rival computer maker Apple Computer had sales figures of nearly four times that amount in the same time span. This would put Gateway 2000's market share below 1.75% which, as any industry analyst would tell you, means instant death in the highly competitive PC clone market. With sales of only 1 million, it seems clear that Gateway 2000 has four times the problems of Apple Computer. Which brings us to the question, "Can anybody save Gateway 2000?" Of course, if Gateway doesn't survive there's always IBM.

Can Anything Save IBM?

After surviving the largest single-quarter loss in the history of business, IBM, once the leader in personal computers, has seen its market share fall well behind industry rivals like Compaq and Apple Computer. IBM, once the dominant PC maker, has seen its position erode as PC clone makers and Apple Computer have seized the lion's share of the desktop PC market. And their fiasco with OS/2 is better forgotten. One bright spot in IBM's personal computing efforts is the success of the PowerPC chip, developed in a joint effort by IBM, Motorola, and Apple Computer, which is currently the fastest personal computer chip on the market, speeding past competitor Intel's fastest offerings.

Can Anything Stop Apple?

After stunning the computer industry by bouncing back to profitability from a $750-million quarterly loss earlier in the year, Apple Computer just posted a comparatively modest $120-million loss for its most recent quarter. The loss, which occurred during what has been called one of the weakest fourth quarters for computer retailers in years, is a far cry from Apple's problems of last year when the board was forced to oust then-CEO Michael Spindler. In fact, a significant part of Apple's recent loss was caused by the fact that high consumer demand for Apple's new 1400 series PowerBook computer created a massive backlog of orders. Although analysts have predicted Apple's demise every year since 1984, they're consistently wrong.

Although Apple does face some challenges, clearly there are many companies that would envy Apple's position as the nation's fourth largest personal computer maker, with over $1.8 billion cash in the bank, sales of nearly four million units a year, a $200 million backlog of orders for new units, and the number one ranking in consumer loyalty in the industry. I guess the 27,000,000 Apple enthusiasts are just glad they didn't buy a Packard Bell.

Copyright © 1997 KW Publishing, Inc.