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Wednesday, August 31, 2005
  blackhole- High-End Manufacturers Don't Always Make Their Products
It's tough to know who really makes anything these days.

In an era of shrinking profit margins, major companies such as Dell and HP often save money by outsourcing much of the design and assembly of their products to a small number of less-well-known (and usually overseas) companies--sometimes the same companies that supply cut-price competitors.

For example, most vendors selling LCD monitors don't make their own LCD panels.

Dell buys the panel in its 24-inch wide-screen 2405FPW from Samsung; HP gets the panel in its L2335 monitor from Philips. A handful of companies provide the basic engines for most CD and DVD recorders, as well.

Does this mean that, say, your NEC monitor is no better than the Brand X model made with the same panel, or that your Sony DVD burner is no different from a no-name burner made with the same optical-drive engine?

Not necessarily. The answer depends mainly on the type of product you're buying.

With LCD monitors, for example, vendors have many ways to add features and enhance the overall quality of the product.

A company like Dell or HP can afford to invest a lot more than a no-name outfit can in the industrial design, the physical adjustment options, and the user interface for tweaking the monitor's setup.

For more commoditized products--items such as optical drives, where the form factor is constrained and where prices have dropped so low that there's little profit margin for manufacturers to compete over--the big-name vendors don't have as great an advantage.

Of course, there will still be important differences in various vendors' warranties, tech support, and software bundles; however, the performance of two products based on the same engine should be quite similar.

-not all good buys come from the big companies-

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