PC makers walk fine line with 'crapware'

Computer makers tweak their approaches to avoid alienating customers while still trying to milk third-party software's cash cow.Images: Bogged down by bloatware?
Written by Ina Fried, Contributor
For years, computer makers have managed to wring a few extra bucks of profit out of each PC sale by bundling all sorts of third-party software.

While adding software, setting default search engines and including toolbars can all put money in PC makers' pockets, the practice has also alienated some consumers who say all such "crapware" is clogging their hard drives and bogging down their systems.

For the moment, computer makers appear to be trying to walk a fine line, tweaking their approaches slightly but hoping not to have to slay a cash cow. Gateway, for example, offers only one program in each category, while Dell has added an option for some models that allow a user to configure a system with no trial software.

"We've seen the evolution," IDC analyst Richard Shim said. "The desktop became kind of a billboard for Internet service providers and software. Now the pendulum is swinging the other way."

At one time, PC makers thought they might be able to subsidize the whole cost of a PC through a combination of advertising and bounties from signing up ISP customers.

While those dreams have largely faded, companies have continued to make money from including trial software, desktop icons and more recently, by agreeing to include a toolbar or other service from the leading Internet search providers.

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Despite some outcry from consumers, there's still plenty of software being loaded on new machines. In part, that's because the PC industry needs the cash that such deals offer. Even if the companies get less than $1 per software program that they include on a PC, that can still add up to $10 or $20 in revenue.

"On a $400 PC, that's a big thing to get," said Stephen Baker, an analyst at The NPD Group.

In one sense, such bundled software represents free money for the PC industry. But at the same time, if it adds up to support headaches or causes customers to shy away, such software may not be worth adding.

Samir Bhavnani, an analyst at market researcher Current Analysis, said one option computer makers should consider is letting buyers order a software-free system but charge a premium to make up for the lost revenue. Bhavnani figures an extra $25 should be enough to cover the company's shortfall.

"It would be so simple for them to come out with an anticrapware PC," Bhavnani said. "People would love them for it. The question is, who has the (guts) to do it?"

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Apple, for its part, is playing off the growing outcry, highlighted in a recent column by Walt Mossberg in The Wall Street Journal. In a new ad that debuted this week, the "PC guy" played by John Hodgman appears so bloated he can barely move.

"It's all this trial software," Hodgman says in the spot. "They pack my hard drive full of it, all these programs that don't do very much, unless you buy the whole thing...it really slows me down."

For the record, Macs do come with trial versions of Microsoft Office and Apple's iWork, though all other included applications are full versions of programs, including the company's iPhoto and iMovie, as well as third-party titles such as Comic Life.

Plus, Bhavnani said, Apple systems sell for far more than the average PC. "They make more money on the box than (Hewlett-Packard) or Dell does," he said. "That's why they are able to do that."

Ultimately, consumers are going to have to decide whether it is worth paying more to get their new computers clutter-free. The addition of trial software and other offers, along with falling component prices, is what has made PCs so cheap.

"One of the reasons is, they are being basically subsidized with billboards," Bhavnani said. "It would be like driving around in a car that you save 10 percent on, but with a big Google sticker on it."

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There was some thought that the debut of Microsoft's Vista might have shaken things up a bit. On the one hand, there were concerns that PC makers wouldn't have time to test all their programs and that they might ship software that didn't even work with the new operating system.

Others thought that with Vista adding more features, such as DVD burning and desktop search, there might be less of a need for add-ons. In the end, though, most computer makers are shipping about as much extra software as they did with XP.

Gateway said it is shipping roughly the same amount of preloaded software on its Vista machines as it did with the prior operating system.

HP, meanwhile said it took the opportunity of Vista's debut to rethink its software bundles and pare things down a bit. "The exact answer varies country by country, but most customers will find we are shipping fewer software titles with our Vista PCs," an HP representative said.

Dell said it has started letting customers have more say about which programs are loaded onto its systems. It says that in many cases, consumers are choosing the free programs, including trial software.

"I think that speaks volumes for the fact that, despite a large discussion around 'bloatware' and that all this stuff is garbage...there are a fair number of people out there that see value and want this on their system," said Jeremy Friedlander, the senior manager for the software that goes on new Dell PCs.

For retail customers, there is less ability to change what's in the box, but shopping around can help. A recent stroll through a CompUSA in San Francisco showed just how widely the systems varied. At one end of the extreme were notebooks from Acer that didn't have much more than a Yahoo toolbar, two disc-burning utilities and Norton security software from Symantec.

On the other hand, Sony crammed several of its laptops with an array of software, including dozens of software trials, special offers and links to Internet services. The desktop is filled with several icons for AOL, as part of Sony's broad agreement with that company. Sony also loads four full-length movies onto the hard drives of many models, but it charges users who want to watch any of the flicks.

Even its tiny 4.5-inch UX series handheld Windows machine is packed full of trial software.

Much of the software just isn't useful, NPD's Baker said, noting that high-end laptops are still being sold with trials for dial-up Internet access, something very unlikely to be needed, or for services no longer really needed by today's PC user.

"The way it's designed right now is guaranteed to make it crapware," he said.

One of the biggest offenses, Bhavnani said, is when companies load multiple, competing products. In particular, dueling security programs can be hard for the average user to sort out.

"That's where it gets really confusing," Bhavnani said. "You have no idea which one is which and what to do."

CNET News.com's Tom Krazit contributed to this report.

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