Instead, they've focused increasingly on the business PC market, where they can sell fleets of pricier PCs through IT. Not only is it easier to sell to fewer customers, the profit margins and order volumes are very attractive. Plus, it gives Dell and HP an entrée to offer the highly profitable consulting services both have been bulking up on in the last decade. For the two companies, the PC's role is increasingly as a loss leader or entry point for selling other items.
The consumerization phenomenon works against that business-oriented strategy. Let's face it: The boring slate-gray slabs that both companies sell to IT are hardly the kinds of computers that excite users. That didn't matter when IT made the call. When Dell, HP, Sony, Lenovo, and others have trotted out racecar-type PCs in the past, few captured users' imaginations -- and IT considered them fatuous window dressing, pressing the PC makers for models that wouldn't change so that IT could streamline its support efforts.
The BYOD phenomenon has taken IT out of the device-selection business, and it's going to happen to PCs, too. I regularly hear CIOs and other execs muse about having employees bring or choose their own computers for the workplace. One reason is business execs' infatuation with Apple's MacBook Air, which gets imposed on IT despite protestations around support and management. Another is the success of BYOD, where several years of dire warnings about security risks have not been realized, creating a "boy who cried wolf" reaction. If it works for smartphones and tablets, why not for PCs, too? And if users choose their own PCs, they can provide their own support, as they do for iPhones and Androids.
In that environment, users won't be choosing the same old slate-gray box. Dell and HP won't be able to sell thousands of PCs to one IT department, but instead will be competing with Apple and the rest in a battle for market share. That plan to use the IT sales relationship to sell lucrative consulting services gets a lot harder to pull off.
3. Their PC future is staked to Windows 8, where differentiation could be hard
People don't get that excited about "regular" PCs. A faster processor, hundreds of an inch less in thickness, an extra port, and a gussied-up chassis -- they're meaningless to users. Instead, they want relevant innovation and real style, which is why only Apple's Macs are gaining market share, and everyone else is losing.
Intel's Ultrabook push -- encouraging PC makers to adopt MacBook Air-like designs and battery life -- was meant to help the industry get out of the gray-box coffin. So far, it seems to be failing, perhaps because the first generation of Ultrabooks were both pricey and based on old technology. The second-generation Ultrabooks unveiled at this year's Consumer Electronics Show drew mainly yawns -- OK, they now look like MacBook Airs and seem to have better battery life and faster startup. So what? The case may have changed, but they all look basically alike, so one cookie cutter has been replaced for another. The pretty Dell XPS 13, for example, is hard to distinguish from, say, Vizio's Air-like clone. HP did show a strikingly different design, the Envy 14 Spectre, but prerelease reviews have been mixed.