Why your desktop is as messy as your desk

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Browsing the aisles of a computer retailer should be an object lesson on the dangers of the herd mentality. No other purchase seems to thwart consumer choice with such impunity. Preloaded, bundled software is a given and PC desktops look strikingly familiar. All are cluttered by the usual suspects (Microsoft, Quicken, Norton, AOL). Even the solitaire game is the same.

It's why you won't find Dan Williams purchasing at a retailer like Best Buy or Circuit City. The 29-year-old University of Cincinnati computer science major would never buy a computer at retail and instead frequents online sites like ecost.com and pricegrabber.com. Although lured to Best Buy in April by a $160 sale on hard drives, Mr. Williams fiddled with a Hewlett-Packard and passed.

"There were four different ISP providers loaded on the desktop," he said. "When I buy a computer, I want it completely bare. I don't want all the crap they put on there."

APPLIANCE APPROACH

If all consumers were like Mr. Williams, the homogenization of the desktop might never have happened. But most consumers aren't like him-although he represents a growing segment retailers must cater to or risk losing. The bulk of consumers instead continue to relinquish choice for convenience.

"A computer is really an appliance, and just like you don't want to have to configure a fridge, people don't want to configure a computer," said Richard Sherman, a technology analyst with investment firm Janney Montgomery Scott. "The bundling factor is about meeting the consumer's need for convenience."

It has also kept costs down and helped build major software brands where the give-it-away-to-gain-market-share branding formula persists. A preloaded Quicken program isn't actually taking up much hardware space anymore and runs online. And virus programs like Norton are now only 60-day trials, requiring online updates, an outlay of cash and a consumer choice whether to switch.

So although the desktop uniformity continues, it can't last forever. For starters, "in five years, the bulk of PCs will not be sold at retail," Mr. Sherman said. "The storefront distribution model will decline." And that should spawn more choices, not to mention cost savings, for consumers who migrate online.

Online sellers "don't have to stock inventory and the selling costs are lower," said Roger Kay, VP-client (desktop and notebook) computing at technology research firm IDC. "This is driving more consumers online. The economics of it all make it tough for a retailer to meet the needs of the consumer."

But will the economics be there to end the bundling? "Probably not," Mr. Kay said. "The marginal cost of software is zero. Once you have it, replicating and getting another copy is free. Your manufacturing costs are zero."

DELL EFFECT

Even so, without fear of harming retailer relationships, major computer manufacturers-Hewlett-Packard, Toshiba, Sony-have all invested heavily in a Web-based selling model, skipping the retail middleman, a migration that continues to lend credence to what is often referred to the "Dell effect." Gateway may have flubbed the direct model, but Dell, often called the Wal-Mart of computers, certainly didn't. And Apple continues to prove catering to the contrarian pays off.

But like computers sold at retail, Dell also preloads and dictates software choices. That's not to say consumer electronic retailers, especially Best Buy and Circuit City, are not trying to respond to the frustrations of the savvy computer buyer like Mr. Williams and bring a bit of a "consumer is king" mentality to its stores. Best Buy boasts of its "customer-centric" model and at any of its 668 stores has been offering a configure-to-order menu to build a customized machine for the last three years, shipped to the store or a consumer's home. But "software choices are limited," according to a Best Buy spokesman.

In October, Circuit City rolled out an HP-branded "Customer Computer Center" inside all its 617 U.S. stores. Essentially a kiosk with a computer linked to a host of unbundled computer offerings, the center allows customers to build a system and choose each component, down to each piece of software that gets loaded.

"It's a response to customers who want to control the way their computers look and operate," said Eddie Fishburne, regional VP at Circuit City. "It also helps us save costs and is a supply-chain initiative because we don't own the inventory until it's purchased."

Yet in demonstrating the system, it became clear it remains tough for retailers to reward consumers who make their true preferences known. Going through a step-by-step build of an HP Pavilion system, the final price tag hit $854.87, without a monitor.

A sales associate pointed out to Mr. Fishburne that the same system (with even more software) could be had on sale for $629 from the floor and taken home the same day.

The Cliffs Notes

Without fear of harming retailer relationships, major computer manufacturers have all invested heavily in a Web-based selling model, skipping the retail middleman. Retailers are responding with configure-to-order options. Even so, many of these options, on the Web and at retail, consist of software packages similar to those on floor models.

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