"White boxes" are computers which are assembled by or for a retailer. CompUSA is the most visible retailer selling its own brand, but a majority of all computer dealers in major cities now sell computers bearing their own names. The major advantage to the purchaser is lower prices; the major advantage to the dealers is greater margins, typically $300 per machine or nearly double the typical margin on a major brand.
The five largest manufacturers of PCs had 56.5 percent of the domestic market during the second quarter of 1999. Compaq had 16.6 percent of the market; Dell, 16.3 percent, IBM, 8.0; and Gateway and Hewlett-Packard 7.8 percent each. However, white box sales had over 40 percent of the market, up from 33 percent a year earlier. At that rate of increase, the five major vendors are expected to hold a market share of less than 50 percent before the end of 2000.
When deciding on the purchase of a branded computer vs. a white box, price is only part of the quotient. Quality of the product and viability of the dealer must also be considered. While most purchasers cannot determine whether the components are first quality, they can ascertain how long the dealer has been in business, its financial rating, whether there is a record of lawsuits and complaints to the Better Business Bureau, and whether the dealer has a technical support desk which is adequately staffed.
The author recently investigated seven white box dealers in the Washington, DC metropolitan area. Only four had been in business for more than three years, only three had a technical support line (only one of which was answered promptly), only two had satisfactory D&B ratings, only two had no lawsuits or complaints lodged against it, and only one was willing to provide a detailed listing of the sources of the components. One dealer would add memory as requested, but wanted $50 for 32 MB, plus $60 for installation-its minimum installation fee. If the owner broke the seal on the CPU's case and self-installed the added memory, the warranty would become null and void.
Libraries considering white box purchases should decide on the criteria which are important to them and evaluate several local dealers before issuing a purchase order.
