Evolve or die? How today's hardware giants are steering a course to irrelevancy

Evolve or die? How today's hardware giants are steering a course to irrelevancy

Summary: The hardware market is tough, and it's only getting tougher. If hardware players think that making me-too devices is the way forward, they could be headed for trouble.

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The mobile market is a tough place regardless of whether you're aiming squarely and consumers or business, and it's especially tough if you're aiming somewhere in between the two. However, if traditional hardware makers don't raise their game, they'll find themselves wrongfooted by competition from unexpected sources.

microsoft-surface-ad
Microsoft's release of the Surface showed how software companies are now willing to make their own devices too.

The division between hardware and software has historically tended to be a clear one. Take Microsoft or Google, for example: both are massive software companies that have traditionally shied away from going too far down the hardware route and, when they have, the results have been a mixed bag. Xbox, good. Kin, bad.

Consequently, a massive ecosystem of hardware makers has grown and flourished around the most successful software platforms, without those companies needing to deliver software (or subsequent updates) themselves. Consider a device maker like Dell or HP: all of them offer services and add-ons for the software that runs on their devices, but they're still better known for supplying the hardware side of the equation.

Some of technology's big names do manage to bestride both hardware and software alike and do so comfortably: Apple is the most notable company to sell both its own hardware and software, giving it supply chain benefits that only it and its biggest rivals, like Samsung, can enjoy. But for most of the other larger players, from Sony to Acer, the software they rely on to shift units is not their own.

And, with the cost of mobile hardware continuing to fall, smartphone and tablet makers are facing new threats from non-traditional sources with software companies and other brands alike muscling in on their turf.

Alarm bells?

Take Microsoft's recent move into selling tablets with the Microsoft's Surface and Surface RT.

When the Surface tablets were first announced, some Windows OEMs recognised Microsoft was simply trying to improve the reception of its new OS, given the Windows 8 devices that had been announced were looking fairly uninspiring, and pushing its hardware partners to up their game.

Not all hardware makers felt the same way: others such as Acer advised Microsoft to "please think twice" about making its own slates. Microsoft indeed admitted that releasing its own hardware in this way could affect the commitment of partners to the Windows platform, and yet still it continued.

Google has also gone some way down this route, partnering with Asus to bring out its own 7-inch tablet. It's not quite the same as Microsoft's Surface situation, in that Google essentially repurposed an existing Asus design for its own needs, but it also has similarities in that Google's strength in mobile is in software, not hardware.

More recently than that, Google launched the Chromebook Pixel, in a move that seemed like it was driven by the same motivations that led to the Microsoft Surface – an attempt to address the uninspiring hardware design that had beset its OS. Is it a perfect laptop? Not by a long shot, but it's a great start towards it. (And let's not forget that software isn't even Google's core business – that's ads, not software.)

But what inspired Google and Microsoft to make this dramatic shift?

The roots of the transition can be traced back to Amazon, and the launch of the Kindle Fire. At a time when virtually every other notable Android tablet came with a premium price tag, Amazon swept with a cut-price offering in and stole millions of sales.

The Fire wasn't the first cheaper alternative Android tablet on the market (Samsung had the 7-inch Galaxy Tab at the time), but it was the first one to really take off. 

The Fire line's popularity showed that, in the minds of device buyers, the right combination of price and brand recognition can go a long way, even if hardware isn't what your brand is best known for — an online retailer such as Amazon is particularly well-placed to take advantage of sales trends if it can get the device mix right.

One of the problems for traditional hardware vendors is that they are often locked into long, well-established contracts with various software vendors, contributing to the necessity for incredibly long lead times to go from a product's conception to sale on the shop floor. Amazon doesn't have any such concerns. 

What Amazon does have though, as does its rival Google, is a huge resource of buyer behaviour data to inform what they do next from their respective core businesses of ads and retail — another area where traditional hardware players are a disadvantage to their newer rivals.

When a heavyweight brand — be it Google, Microsoft or Amazon — with impressive command of their supply chain and insight into consumers' buying habits start getting into the hardware business, device makers' alarm bells should start ringing.

Innovators or imitators?

Of course, sufficient time has passed for traditional hardware makers to have noted the success of the Fire and Nexus 7 and start producing similar devices, but it's unlikely few will receive reviews or a buying reception like the Nexus or Fire as, quite simply, the category is not particularly new or novel anymore.

Hardware makers seem fixated on attempting to cash in on a thriving category, rather than define the next one. What they need to do is be more adventurous with their hardware to create a worthwhile balance of features, design, performance and price. Someone has to take the leap first, just as Amazon and Google did with their low-cost, high-spec 7-inch tablets.

And while HP, Dell or any other device maker pursuing a strategy of making me-too devices will do well enough to keep paying the bills, it won't win the hearts and minds of consumers, it won't spark the next category revolution and it won't push rivals to try harder either.

It seems that for that, we now have to look to the likes of Amazon and Google to see what's coming next in terms of mobile computing, and if this trend continues the hardware giants of today will be relegated to grinding out the dullest devices of tomorrow.

Topics: Tablets, Hardware, Mobility, Software

Ben Woods

About Ben Woods

With several years' experience covering everything in the world of telecoms and mobility, Ben's your man if it involves a smartphone, tablet, laptop, or any other piece of tech small enough to carry around with you.

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61 comments
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  • The secret of change . . .

    "Evolve or die? How today's hardware giants are steering a course to irrelevancy"

    My thought is that it doesn't matter if they "die" or not. Ultimately, the goal is to build a new technology, not kill an old one.

    "The secret of change is to focus all your energy not on fighting the old, but on building the new." -Socrates
    CobraA1
  • Impressive Command of their Supply Chain

    The availability of Microsoft's Surface at launch left an impression alright.
    WebSiteManager
    • Same with the Nexus 4.

      Google has little concept of the supply chain. Amazon seems to have a great understanding. MS pretty good with XBox but less so with other products. Google? None at all.
      Bruizer
    • But still too many Me-To products

      The me-to's are stuck at a screen resolution of 1920X1080. You can hardly find a laptop with anything better. Dell tried to be innovative and came out with an 18" tablet. Specs look great until you see the screen is still 1920X1080. I know that is HD television and the number of displays available at that resolution must make them really cheap. On an 18" tablet it just defeats the purpose of the size. They are afraid to really innovate. They start to but then fail to complete and me-to it.

      I just got a new Kindle Fire HD 8.9" Tablet and even it is 1920X1200. I have an old Dell Laptop that is 1920X1200 but cannot get them anymore. I have several monitors the go to 1200. I really use the extra 10% pixels when running AutoCAD and Visual Studio. I want more. I want innovation and not me-to's.
      MichaelInMA
      • High resolution and big monitors

        That is also what I want, no touch screens, I want the real estate…no rectangles, but overlapping windows.

        Why do I want a 2560x1600 on a tablet?

        Maybe the 4K TVs will be the answer, since the 1920x1080 is coming from those manufacturers and has dominated the computer space too, maybe now we will get proper 4K monitors one day…
        mil7
      • Microsoft is so desperate

        because they have found that more and more people have realized that they don't nee Microsoft ecosystem. We have moved to post-Microsoft era.
        Frankie1965
      • Windows versus Android verus Apple

        The problem is that you can go to an incredibly high resolution screen on a laptop, and what do you get? Icons so small that you cannot see them, and text so tiny you cannot read it. Higher resolutions are nice, but only if the OS is designed to provide the best user experience, and going to smaller and smaller text on a 15" portable is not the answer. I am not sure how Android handles that, as my tablet has a low resolution. Apple has a big advantage of having both hardware and software, so they can ensure a great experience.

        I remember working at Dell, supporting portables as resolutions first started to climb. Now, remember that this was from 800x600 to 1024x768 and then a bit higher. When you have a 14" or 15" screen and you go beyond that, you need young sharp eyes, or you have to step down the resolution which destroys the effect as things get fuzzier. Even Windows 7 does not really handle this very well, and all the various ways that Windows 7 can increase the size of what is on your screen are only marginally acceptable.

        Microsoft will have to address this point in a new and novel way if Windows machines are going to match the resolutions of Apple's "Retina Display" machines.
        AudeKhatru
  • Hardware giants cannot innovate ....

    when MS and Intel ties their hands and feet.
    D.T.Long
    • Eh?

      How have hardware giants that aren't tied to MS and Intel innovated lately?
      Michael Alan Goff
      • Huh?

        Which hardware giants do not depend on MS and Intel (and their specifications) for most of their hardware (relevant to the blog topic)?
        D.T.Long
        • It's simple

          If you made a Linux/AMD combo, you'd be cutting out Intel and Microsoft completely.

          Of course, AMD has hardly been the most innovative company out there.

          Seriously, though, what is there to really innovate? More power while being more efficient? Intel is doing that.
          Michael Alan Goff
          • "Hardware giants cannot innovate .... "

            almost all pc hardware reference design were courtesy of intel ...
            kc63092@...
          • And?

            They aren't holding a gun to their heads.

            If AMD/Dell/Etc wanted to innovate... sure, they could. But they take what they're given because it's less work.
            Michael Alan Goff
          • Ultrabook inspired by...

            Intel? Really? You don't think the MacBook Air had any influence there? Some of them (Samesung) are strikingly similar in looks to the untrained eye.
            redgeminipa
          • And what kind of CPU is in the MacBook Air?

            Prey tell? Ohh , thats right INTEL!
            martin_js
          • Re: AMD has hardly been the most innovative company out there

            Oh please.

            Who designed the current 64bit x86 architecture? Correct. AMD. Intel were so shocked, that they agree to license that technology from AMD in exchange of never, ever suing them again. Funny how things develop sometimes.

            AMD have always been better CPU architecture designed than Intel. Any time. Every time. It's just that Intel managed to invest heavily in fabs in recent years, that they are able to "outperform" AMD CPUs.

            Anyway, live in your bubble all the way you desire.
            danbi
          • Yep, they did innovate back in the day

            Are we still saying Xerox is innovative for when they created the GUI back in the day?
            Michael Alan Goff
          • Even the 550 MHz K6-2 in my first Compaq system worked great.

            That system was discounted to $1,200 back in '98, but provided years of service and is still working.

            Now I'm using an HP rebranded desktop costing only $239 (no OS) for 4 years with only 2 GB of RAM. 64-bit and running Linux Mint makes it work great along with a $79 ATI 2GB PCI 16X graphics card.
            Joe.Smetona
          • And best of all, it came with Compaq restore disks.

            ...
            Joe.Smetona
        • What?

          The ones that depend on Samsung and Google?
          Jaybus