According to Squaretrade, an online vendor of extended warranties, more than 20% of all notebooks will encounter a major failure within 3 years. And its not limited to the lesser PC manufacturers! Check out the chart attached – what is most surprising is that Apple, which prides itself on quality and reliability was in the middle of the pack with a 17.4% failure rate; one that was bested by Sony, Toshiba and Taiwan’s Asus (often thought of as unreliable).

We at Observer Publishing have told you that extended service plans are a high margin profit pool for the computer manufacturers. For instance, if we go to Dell.com a 3 Year extended warranty (additional 2 years ‘at home’) costs an additional $260 (Inspiron 15 – price 11/24/09). The cost to Dell on that service plan can’t be more than $100.

Here’s what you have to factor into your next Notebook purchase:
1) The system won’t last more than 4 years without a repair (perhaps a drastic statement, but better to be safe)
2) Based on this data, figure out what is better to spend: $250-$300 now to ensure you’re covered through year 3? or save that money and figure out later if the computer is worth fixing or throwing out
3) In either case, especially in this era of $399 – $599 computers, BACK UP YOUR INFORMATION, preferably on an online service like MOZY. The most painful part of having a computer die on you isn’t replacing the computer – its replacing the information (files, pictures, music, etc…) that you’ve lost.

Read: Globe & Mail;  The Street

The deal, however, puts even greater distance between HP and Dell both in revenues, but in breadth of product offerings. Dell followed HP’s aquisition of enterprise service provider EDS with the purchase of Perot systems. In the networking space, there does not seem to be a clear “me too” deal. Networking behemoth Cisco would likely be the aquirer, not an acquiree and its unlikely that it would want to enter the computer systems space.

Stay tuned, intrepid Observer readers – we’ll be on the lookout for possible targets as Dell looks to catch up to HP once again!

This is fine in a world where your applications and media are downloaded or can be loaded via flash. However, I think this is an instance of the industry being a bit hasty and an opportunity for backlash. Many applications, including Microsoft Office, still install applications via CD or DVD media. Also, movies are still in disc form and last time I checked, none of the major studios were all warm and fuzzy about users ripping films to their computers.

The cost-cutters and retailers out there will suggest that users just go and buy a USB DVD drive to augment their system. A quick search found this to cost around $50-70 depending on brand. An OK idea, but if you’re a frequent traveler, that “thin and light” notebook is not so thin and light when you have to truck around a heavy power cable and NOW a DVD drive in the briefcase.

Hopefully, cooler heads will prevail.

For all the folks out there thinking of upgrading or purchasing a new system, here’s a collection of great articles to bring you up to speed. Happy Shopping (tomorrow, all PCs will now come with Windows 7 Pre-installed)!

New York Times: The People Spoke. In Windows 7, Microsoft Says It Listened.
Wired: 7 Things You Should Know About Upgrading to Windows 7
PC World: Windows 7: A Complete Survival Guide

Dell was the only company in the top 5 to see a decrease in shipments. Acer’s rapid movement up the table was not a surprise to the industry. The company has been targeting Dell’s world-wide share through its success in the netbook and low-end notebook categories, which have been of the few areas of growth in an otherwise tepid industry.

Lenovo Group, the number four manufacturer behind Dell and formed through a merger of IBM’s computer division and Chinese PC company Legend Computing, also saw gains in the quarter. Lenovo saw shipments grow 18% due to its strength in China and the ASEAN countries.

Interesting to hear that the investment community is only looking at Dell’s stock price as a function of the corporate PC sales environment. The computer industry has been whispering that Dell’s issues existed long before the recent recession and had lost its ability to execute. Michael Dell, after re-assuming the CEO role, changed up his management team, brought in all sorts of outside executives (many of whom have already left), and held multiple employee downsizings.

Are Dell’s problems systemic or will a resurgency of corporate PC purchasing surpress other issues that the company?