PC margins to get even smaller?

HP looks to scrap pre-installed software, which retailers are charging for removing
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The world’s largest global PC vendor HP is looking to abandon pre-loading software on its computers, a business model that props up the low margin on computers through huge payments from software companies.

According The New York Times, there is growing consumer frustration with this ‘bloatware’ – various photo editing, utility software and anti-virus tools which is usually on trial or linked to a paid service, and can slow a system down.

Retail giant Best Buy claims more and more people are asking for the software to be removed immediately upon purchase of laptops and desktops, and that such a service is “going to increase in popularity.”

To combat this, HP is reportedly to introduce a new system into its PCs next year, which would instead point users to a web page where they can download similar types of software.

Dell added: “This is an evolving story and Dell is evaluating how it can best deliver software to its customers.”

Many analysts believe that any such new web based system would reduce the amount of control vendors have, since users could easily go elsewhere for downloadable software, which in turn could damage the revenue they get from such deals and reduce margins.

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