Buyer Perceptions, Product Standardization, and Lean Business Processes Sustain the U.S. White Box Market, IDC Says.

Business Editors/High-Tech Writers

FRAMINGHAM, Mass.--(BUSINESS WIRE)--Jan. 29, 2004

Although white box PC vendors have felt the squeeze of an economic slowdown, the resulting PC recession, and increased competition from brand-name manufacturers, they continue to prosper below the radar of the companies that dominate the field. According to a new study from IDC, buyers continue to purchase these non-branded systems with the belief that they are getting more, not less, for their money. Moreover, buyers are now looking to these vendors for servers, portable PCs, and complementary services.

"Perception is critical in the PC market," said David Daoud, senior analyst, Personal Computing research at IDC. "Many buyers believe they can get the same quality components in a non-branded box and save money by forgoing an established name. These beliefs have been successfully tested on the desktop, so now buyers are looking for similar quality and savings in portables and servers."

Over the next two years, players in the white box space will face a series of challenges as well as opportunities to maintain their position in the desktop market and to improve their performance in the portable PC market and other areas. An economic upswing will mean increased success for the white box vendors. Combined with some significant and necessary transformations, white box vendors could become long-term, formidable players in the systems market.

"One of the most significant developments is the ongoing movement of white box system builders toward producing non-branded portable PCs," Daoud says. "With a saturated desktop market, white box systems builders have begun to look at ways to duplicate their model in form factors that are in demand." Meanwhile, current developments in the component supply side and in distribution channels are helping white box system builders become more competitive and organized. The multiplication of system builder programs bodes well for white box assemblers and vendors. IDC expects this momentum to continue in the future.

Two new studies from IDC -- White Box: A Highly Resilient Channel and Insight on White Box Vendors' Financial Model -- address the dynamics of the white box market from the channel and financial perspectives, as well as from the perspective of system builders and commercial and consumer end users.

To purchase these studies, call IDC sales at 508-988-7988 or email [e-mail].

About IDC

IDC is the premier global market intelligence and advisory firm in the information technology and telecommunications industries. We analyze and predict technology trends so that our clients can make strategic, fact-based decisions on IT purchases and business strategy. Over 700 IDC analysts in 50 countries provide local expertise and insights on technology markets. Business executives and IT managers have relied for 40 years on our advice to make decisions that contribute to the success of their organizations.

IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. Additional information can be found at www.idc.com.

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