CXO

If computers are like cars, then who's GM?

We often use cars as analogies for computers when trying to explain things to users. Can a further analogy be drawn? Is the computer industry also like the auto industry? Not exactly, although you could made a few comparisons.

We often use cars as analogies for computers when we're trying to explain things to users. Can a further analogy be drawn? Is the computer industry also like the auto industry? Not exactly, although you could make a few comparisons.

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The easiest way to explain the insides of a computer to some people is to relate it to a car. We've all done it, and it's become almost a cliche. However beyond the guts of an individual computer, other parallels can be drawn between the computer industry and the auto industry. Just as you can analogize the CPU to be a car's engine, you can also point out how one computer manufacturer has a counterpart in the auto industry.

A couple of comparisons

If you took some of the top computer companies, it's not exactly a 1-1 matchup. And I don't think there's always a direct matchup at this point in history. For example, none of the major computer makers are currently in as much financial trouble as GM or Ford.

Here's a quick rundown on how I would compare some of the top computer companies to car companies:

  • Acer = Hyundai -  Hyundai started off importing inexpensive cars of relatively low quality, but over time improved their cars and started increasing market share to become a significant player in the market. Acer has largely done the same.
  • Apple = Volvo - Volvo is a premium niche brand that has a loyal following. Customers of both companies feel that their chosen product is the best and offers superior safety and protection compared to the competition.
  • Dell = Ford - Ford is the maker of the common run-of-the-mill car. They're the second-largest U.S. car company. Like Dell, Ford makes large quantities of not overly exciting machines with a reputation of questionable quality. Ford also has a performance sub-brand called the Mustang, which would be the equivalent to Dell's AlienWare brand.
  • Gateway = Chrysler - Gateway was the third major U.S. computer company for a long time and was much smaller and more focused on a certain market segment than the other majors. Like Chrysler, it ran into financial problems and had to merge with another company (even though Chrysler is now independent). Like Chrysler, Gateway used fancy packaging (cow boxes) to hide products of questionable quality.
  • HP = GM (1930s) - GM of the 1930s didn't dominate the industry the way they did in the 50s and 60s and didn't have the financial problems of today. It did, however, scarf up a lot of competitors, was a significant leader in the industry, and put itself in the position to dominate in the future. HP has done the same thing in recent years.
  • Lenovo = Toyota - Toyota's the up-and-coming import brand that is the standard for car quality and innovation in the market. It's quickly growing to become the world leader in cars, but as it's grown, traditional quality has become an issue.
  • Toshiba = Subaru - Subaru has long been a small car company that's struggled in the marketplace in general and has been unable to escape the small four-wheel-drive car market. Likewise Toshiba's been basically trapped as a laptop vendor in this country.

That's just some of the comparisons that I could come up with off the top of my head. I think they cover the market pretty well, but you may have other suggestions.

Does branding matter in a purchase decision?

From a purchase decision standpoint, branding used to be a huge factor. You probably remember back when some people bought ONLY Fords, while others bought ONLY Chevys. Then you had the few odd ducks who preferred Dodges. Likewise in the computer field, entire groups of users developed who swore by their brand, be it Atari, Amiga, Radio Shack, or whatever.

As computer diversity has dropped, this has become less of an issue. With the exception of the Mac and Linux crowd, you don't always see branding as being a positive purchase decision point. Rather, I think what happens is people will use a brand to disqualify a vendor more than anything else. For example, even though Acer makes a pretty decent machine today, I still have a hard time getting past the 11 DOA machines out of 19 Acers that I encountered 10 years ago when working at the Police Department.

What's your take?

Does branding matter in a computer purchase? And is there an analogy between car companies and computer companies? Is there a twenty-first century GM I'm missing?

With most PC components being equal, there's not a lot to differentiate companies like Dell and  HP. PCs have largely become commodities, and I wonder if branding has that much effect at all.

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