Word: pc
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Dates: during 2000-2009
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...next stop in Samsung's digital march is the living room. To that end, the company has worked with Microsoft to develop Home Media Center, designed to control everything from your DVD player to the PC. Last June, Texas Instruments and Samsung signed an agreement to develop ultrathin, large-screen televisions based on TI's digital light-processing technology. In 1999 TI turned down a Samsung partnership offer, thinking it would be better to work with "established" brands. By last year it was clear that TI's initial partners were moving too slowly to get anything to market in good...
...advantages Dell enjoys over giants such as IBM could prove decisive against Legend as well. Founded in 1984 by 11 computer researchers from the Chinese Academy of Sciences, Legend has rapidly grown into Asia's largest PC maker by riding a boom in mainland computer sales. Although it manufactures in China, where labor costs are cheap, it lacks Dell's economies of scale. Legend's revenue last year was $3.5 billion, puny compared with Dell's $31.9 billion. Dell's 17.6% profit margin similarly dwarfs Legend...
...appears that Dell can undercut Legend's prices despite China's protectionist tariffs. The American company offers a starter PC for $97 less than Legend's comparable entry-level model. Any pricing edge enjoyed by Dell could increase over the next several years; China's entry into the World Trade Organization means tariffs on imported PCs will decline from 13% to zero...
...Legend's response to slowing PC demand on the mainland has followed the industry script: the company has decided to diversify. Among numerous initiatives: manufacture of palmtop PDAs; an expanding chain of more than 500 retail computer stores; a move into Internet services that includes a partnership with AOL Time Warner (TIME's parent company); and contract manufacturing. In the future, Legend expects to generate substantial profits by providing I.T. services to Chinese corporations-up to 30% of the company's total profit by three years' time. Legend, through a joint venture with Xiamen Overseas Chinese Electronic, has even agreed...
...Unfortunately, diversification campaigns by PC manufacturers often go awry. Taiwan's Acer, for example, was once a well-known computer brand, but the company has faded from prominence and struggled to make a profit despite forays into fields such as semiconductor manufacturing. By entering unfamiliar territory, Legend risks losing focus where it truly matters-PC and server sales contribute 93% of Legend's revenues. At least one industry analyst says the company's strategy has become so diffuse he no longer understands...