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Market Focus: Computers & business equipment

May 15, 2001

16 Min Read
Market Focus: Computers & business equipment

It appears that the great boom economy of the last few years has, at least temporarily, flattened itself out. Confident consumers and burgeoning startups have given way to cautious spending, layoffs, and company closures. Even some of the big names in computers and business equipment—3Com, Dell, and Xerox—have sent home 1200, 1700, and 4000 workers, respectively. 

PDAs and Smart Phones 
In handhelds, recent stock market activity signals an equally dismal short-term outlook. After announcing reductions in both fourth quarter projections and its workforce (250 jobs), handheld market leader Palm Inc.'s shares plummeted nearly 48 percent in late March. Competitors felt the same ripple: Handspring Inc. dropped 27 percent, and Research in Motion Ltd. fell 15 percent. 

Yet, despite these bearish conditions, Gartner Group Dataquest (San Jose, CA) forecasts the worldwide market for PDAs (personal digital assistants) to grow from 9.4 million units in 2000 to 33.7 million units in 2004. Expanding this segment to include smart phones, which incorporate PDA and wireless technology, research firm International Data Corp. (IDC) projects the worldwide market for such devices to rise from 12.9 million units in 2000 to 63.4 million units in 2004, with 2001 representing the year of greatest growth. 

Citing interest in advanced phone features as the source of growth in smart phones, IDC believes this to be the fastest-growing segment among handheld devices. Compared to overall handheld market growth of 48 percent CAGR (compounded annual growth rate), anticipated growth in smart phones is 164 percent CAGR, rising to more than 23 million units by 2004 (480,000 were shipped in 2000). 

Servers 
Following the smart phone growth pattern, rack-optimized servers, which are designed with a very low profile to fit into server racks, are rapidly outpacing the rest of the server market to the point that vendors are flooding the market, according to a report from IDC. Revenues from Q3 2000 were a staggering 392 percent higher than the same quarter a year earlier. The report attributes this exploding interest in dense server solutions to a combination of rapid growth and the swelling need to accommodate this growth in slower-expanding spaces. 

In the slower-moving traditional server arena, contract manufacturer Trend Technologies Inc. has found that providing full manufacturing services to customer Dell Computer Corp. has created diversified business opportunities. John Millis, who was Trend's director of marketing and strategic planning for three years and is now vp sales at Shielding for Electronics Inc. in Sunnyvale, CA, says that Dell's use of the same size boxes, or enclosures, as its PCs but with server configurations has enabled Trend to capture this segment from the computer OEM. 

The difference in manufacturing, says Millis, is in the number of configurations. "We might have three or four server lines because the volumes might be 20 percent of what a PC volume is," he says. "In effect, we're basically just having to change over the lines a little more often." 

Desktop Computers 
In addition to expanding aggressively into server development, and in spite of recent layoffs, Dell maintained and even extended its top ranking in PC sales in 2000. In fact, its shares jumped 12 percent in early April after the company refused to lower its revenue and profit forecasts for its current fiscal quarter. Table 1, comparing Q4 2000 PC shipments to those of Q4 1999 for the top five computer manufacturers, shows weakness among those OEMs that relied heavily on consumer sales. Worldwide, PC growth was a modest 9.2 percent for year-on-year Q4 2000, but U.S. growth was even less impressive at .3 percent—a 3.6 percent decline from Q3 2000, say IDC sources. 

"Fears about the slowing U.S. economy clearly cut consumer demand in the latter half of the final quarter in 2000," says Roger Kay, manager of IDC's PC program, "and a lack of compelling reasons to buy kept the commercial segment from making up the difference." 

Sub-$500 PC prices aren't helping these figures. Trend's Millis notes that, with these price reductions, the PC business increasingly is taking the form of a commodity business. As a result, he says, there's not a lot of value differentiation that consumers will pay for. 

"We've found that, more and more, PCs are being made from standard off-the-shelf boxes, often purchased in Asia," says Millis. "Rather than having to pay for the entire box design and tooling, companies will design a custom bezel that has the HP or Compaq look and feel, but the rest of the housing is just a white box." Although Dell does not follow this business model, many PC manufacturers' products are never really touched by those companies, he adds, but are shipped to the consumer on behalf of the OEM. 

Standing apart from the "white box" manufacturers, Apple Computer has set the tone for desktop units with its own methods of fabrication and design, starting with the iMac. David Johnson, operations tooling manager for the company, notes the design freedom offered by plastic in terms of color and as-molded quality. The challenge will be in figuring out what will be the look of the new desktop, he says. "What kind of form factor will it take?" 

IDC's desktop PC group has explored this topic as well, finding in a study that color and size are critical in determining the success of a PC design. Yet, what appeals to consumers may not appeal to business buyers. "Desktop PCs designed for the consumer market will need to pack a punch while those for the corporate world will need to be understated and elegant," says IDC's Kay. 

The research group also believes that small PCs that users can easily move out of the way when not using them will have broad appeal, as will flat monitors. "We are at the start of major changes in desktop design," adds Kay. "It's critical that vendors understand user preferences to plan winning products." 

Portable Units 
If weak consumer sales and sluggish corporate desktop demand, as explained by IDC, contributed to lackluster performance in PC shipments in Q4 2000, interest in laptop computers—innately simple to set aside in the workspace, unlike a desktop unit—is more than picking up the pace. Reporting on trends in the EMEA region (Europe, Middle East, and Africa), IDC compares 37.9 percent growth in notebook computers for all of 2000 to desktop growth of 9.5 percent. 

Because of the need for portability, driven by changes in work patterns, laptops are rapidly replacing desktops, according to IDC. In fact, says Karine Paoli, IDC's Expertise Centre manager, EMEA Personal Computing group, "if desktops continue to be replaced by [portable computers], more than one out of three PCs sold [in this region] will be notebooks in 2002." 

To enhance the units' portability and functionality, these laptops are becoming increasingly slim, light, and powerful, says Apple's Johnson. "Because of this trend in design profiles, alternate materials that have the rigidity required to support an ultrathin profile along with lower part weight are prevalent," he explains. One example of this in Apple's product line is its new Titanium portable. 

However, he continues, achieving needed cosmetics, managing tool life, and coping with degrading yields in metal components can be problematic. "The challenge for plastic is how to meet the rigidity requirements of a very thin, portable unit, and still take advantage of what plastic has to offer." 

High Yields, Clean Processing 
When asked what molders will need to do to gain an edge in this market, Johnson points to Apple's current product offerings. "There are a lot of challenges, from material handling to secondary operations, that we demand from molders producing these parts," he responds. He explains that the OEM looks for documented, process-oriented resin handling that keeps the material clean, maintains high yields, and demonstrates efficiency throughout the molding and secondary operations. 

To accomplish these needs, he continues, it's important to have a skilled staff. "Our products require a lot of horsepower in the initial stages and we find ourselves inventing new things because we violate so many of the established molding rules," he reveals. "We hope the capability of the molder's staff is there to support our 'Think Different' philosophy—trying new ideas and performing DOEs that keep our yields high and produce a good-looking product." 

Editor's note: Four of the following applications—molded by Kofu Casio Computer, Mack Molding, APW Plastics, and Brookfield Rapid Solutions—were presented at Structural Plastics 2001, recently held in Atlanta, GA. For more on the show, see the June issue of IMM. 

Top five vendors, U.S. PC shipments, Q4 2000 (preliminary) Thousands of units 

 

Q4 2000 rank

Vendor

Q4 2000
shipments

Market
share

Q4 1999
shipments

Market
share

Growth
(1999-2000)

1

Dell

2797

22.3%

2110

16.9%

32.5%

2

Compaq

1916

15.3%

2024

16.2%

-5.3%

3

Hewlett-Packard

1550

12.4%

1282

10.3%

20.8%

4

Gateway

1077

8.6%

1156

9.2%

-6.8%

5

IBM

744

5.9%

694

5.6%

7.2%

 

Others

4457

35.5%

5242

41.9%

-15.0%

 

All vendors

12,541

100%

12,509

100%

.3%

 

Vendor shipments are branded shipments and exclude OEM sales for all vendors and represent shipments to distribution channels or direct to end users. Data for all vendors are reported for calendar periods. Source: IDC

According to IDC, Dell extended its dominance in PC sales as Compaq, with its reliance on consumer sales, fell back. HP gained market share and was the only major vendor to show strong consumer sales in Q4 2000. Gateway had a particularly difficult quarter because of its heavy reliance on the U.S. consumer segment. IBM rounded out the top five with shipments just higher than the same quarter the previous year, despite its shift in consumer strategy from retail to direct sales.

 

0501i62a.jpg PDA/mobile phone uses two-shot molding for a tight fit 

  • Application: QCP 6035 Smartphone. 

  • Materials used: Cycoloy PC/ABS, with Magix Visualfx special effect (GE Plastics). 

  • Manufacturer: Kyocera Wireless Corp. (San Diego, CA). 

  • Molder: TecStar Mfg. Co. (Germantown, WI). 

  • Designer: Insync Design (Whippany, NJ). 

  • Functionality: First a mobile phone and second a PDA, the Smartphone measures 5.59 by 2.6 by .86 inches and weighs 7.35 oz. It runs on Palm OS v3.5 software and can be used to access e-mail and the Internet. Additionally, the phone acts as a wireless modem to provide data and fax capabilities for personal computers through its charging cradle or an optional serial cable. 

  • Manufacturing details: The faceplate is created through two-shot molding: The first shot is a metallic-effect PC/ABS; the second shot around the edge is a black PC/ABS. 

  • Challenges/innovation: According to Kyle Halkola, senior staff manager at Kyocera, engineers were faced with three major issues: fitting square-shaped electronic and LCD components into a very rounded design; squeezing a mobile phone module and PDA module into a small housing; and separating the two modules with an interference shield.

0501i62b.jpg The first two problems were resolved through two-shot molding, which allowed for wall thicknesses as thin as .6 mm but also added strength where needed without affecting the surface appearance. Molding with two shots also enabled Kyocera to add a second color at a relatively low cost without having to paint or mask the parts, says Halkola. 

Shielding the inner components initially presented a challenge since the Smartphone was based on Qualcomm's PDQ, a much larger device. The modules lie right on top of each other, explains Halkola. In addition, compression from the fasteners on the inner shield caused the part to distort. To add rigidity, Kyocera switched to a glass-filled polycarbonate (GE) that is subsequently plated with metal. 

GE Plastics
Pittsfield, MA
Phone: (800) 845-0600
Web: www.geplastics.com 

0501i62c.jpg Gas assist benefits copier guide 

  • Application: Paper guide flap for copy machine. 

  • Material used: Not available. 

  • Manufacturer/designer: Casio Computer Co. Ltd. (Japan). 

  • Molder: Kofu Casio Computer Co. Ltd. (Japan). 

  • Moldmaker: Kofu Casio Computer Co. Ltd.; gas-assist technology, Cinpres Inc. (Ann Arbor, MI). 

  • Functionality: This lightweight component guides paper through the copier. 

  • Challenges/innovation: Conventional injection molding would have required high pressure for this component, which induces warpage. Molding with gas assist improved the part's straightness and dimensional stability, and took out weight.

Cinpres Inc., Ann Arbor, MI
Phone: (734) 663-7700
Fax: (734) 663-7615
Web: www.cinpres.com 

0501i64a.jpg ABS a first for OEM's desktop PC 

  • Application: iPAQ desktop computer. 

  • Material used: Lustran ABS 650 (Bayer Corp.). 

  • Manufacturer: Compaq Computer Corp. (Houston, TX). 

  • Molder: Foxconn Corp. (Houston, TX). 

  • Functionality: Intended for small work-spaces, this personal computer weighs slightly more than 10 lb and reportedly is 75 percent smaller than most PCs. 

  • Manufacturing details: The 12 exterior parts, consisting of five housing components, two buttons, three bezels, one vent, and one grille, are each molded in a single-cavity tool with cycle times of 20 to 50 seconds. Silver-color components are painted; black components are not. After painting and partially assembling the parts, Foxconn ships the assemblies from its China facility to Compaq for final assembly. The 12 molded components are snapped on, heat staked, or screw mounted to a metal chassis. 

  • Challenges/innovation: To accomplish Compaq's goal of developing a low-cost, durable, attractive unit for the corporate market, the computer OEM selected Bayer's ABS material, available in Asia. (The North American equivalent grade is Lustran 648.) Lustran 650's high-flow characteristics enabled the part walls—.09 to .11 inch thick—to fill easily while maintaining needed mechanical strength, Bayer sources report. It withstood shock and vibration resistance tests and also delivered low part cost and good surface appearance. With this selection, Compaq brought to market its first commercial desktop PC to feature an ABS housing.

Bayer Corp.
Pittsburgh, PA
Phone: (412) 777-2000
Web: www.bayer.com/polymers-usa 

0501i67a.jpg Six-part door made from three tools 

  • Application: Cabinet door for a network switching device. 

  • Materials used: Clear center panel—Lexan 144 polycarbonate (GE Plastics, Pittsfield, MA); side bezels—Cycoloy C6200 PC/ABS (GE Plastics). 

  • Manufacturer/designer: McData Corp. (Broomfield, CO). 

  • Molder: Mack Molding Co. 

  • Moldmaker: MSI Mold Builders (Cedar Rapids, IA). 

  • Functionality: The door is used on the cabinet containing a network switching device, providing structure, louvers for airflow, and observation of the controls without opening the door. It measures 72 by 22 by 2.5 inches and weighs 35 lb. 

  • Manufacturing details: The six-piece assembly is run in three tools. The clear center panel is molded on a 1500-ton press; the side bezels are molded on a 750-ton machine and are then painted with an acrylic metallic high-gloss finish. Mack adds inserts to the side bezels and McData performs final assembly. 

  • Challenges/innovation: Initially designed as one part, Mack determined that the large, clear center piece would require a 2500-ton press. A piece of this size would also present numerous cosmetic and processing challenges. By breaking it in half symmetrically, molding could be performed on a much smaller machine, but still required just one tool.

The side bezels also were split symmetrically to maintain a horizontal style line, says Fran Preseault, Mack sales engineer. McData had designed four different bezels, but the molder suggested a consistent shape, so that parts in opposite corners could be interchanged with minimal machining for a hinge slot. This design revision enabled just two molds to be used for the four parts. Cost savings on the tool are estimated at 25 to 30 percent; overall piece price savings are 5 to 10 percent. 

A high-gloss, metallic appearance on the side bezels also presented a challenge for Mack since its customer wanted the color effect molded in. However, because of knitlines that formed around the vents and accompanying cosmetic problems, the molder developed a paint finish that provided the needed uniformity. 

Mack Molding Co., Arlington, VT
Phone: (802) 375-2511; Fax: (802) 375-9419
Web: www.mack.com 

0501i67b.jpg The impossible part, revisited 

  • Application: Spark mailing machine. 

  • Material used: Bayblend FR-110 PC/ABS (Bayer Corp.). 

  • Manufacturer/designer: Pitney Bowes Mailing Systems (Danbury, CT). 

  • Molder: Alliance Precision Plastics Corp. (Rochester, NY). 

  • Moldmaker: Osley & Whitney (Westfield, MA). 

  • Functionality: This postage machine uses digital ink jet printing and allows for customization of postal markings for advertising messages. 

  • Manufacturing details: If this application sounds familiar, it's because IMM ran a feature on the design and manufacture of the collar, one of 11 molded parts comprising the machine (see "To the Outer Limits of Design," November 1999 IMM, pp. 54-57). However, we thought readers might like to see the entire assembled system. The challenging collar, which is a structural piece containing the postage meter and its interface with the printer, is molded in a 10,000-lb tool incorporating five cavity slides on a 500-ton press. 

  • Challenges/innovation: Pitney Bowes needed a durable material that could take advantage of the new colors selected for the housing. The colors were chosen for their appearance in a front office environment. On the design side, the postage meter portion of the machine was reconfigured to stand upright—closer to eye level and therefore easier to read. (See the previously mentioned feature for complete details.)

Bayer Corp., Pittsburgh, PA
Phone: (412) 777-2000
Web: www.bayer.com/polymers-usa 

0501i68a.jpg Weight, cost cut in paper transport unit 

  • Application: High-speed paper transport. 

  • Material used: Cycoloy C6200 PC/ABS (GE Plastics, Pittsfield, MA). 

  • Manufacturer: Lexmark International Inc. 

  • Molder/designer: APW Plastics. 

  • Moldmaker: L.B. Molds (Gardena, CA). 

  • Functionality: The paper transport is located under a printer and elevates the paper tray for high-volume, high-speed printing. 

  • Challenges/innovation: Originally, the assembly consisted of six sheet metal components. Faced with a highly aggressive timeline and insufficient files and drawings with which to work, APW's mandate was to reduce program costs and part weight. The molder designed a four-component plastic assembly in Pro/E, incorporating a number of previously separate components into the new design, says Chuck Schroder, sales support/plastics engineer for APW. One such element was a molded transformer cover that had to be attached to the metal transport; in the four-part configuration, the cover was included in the plastic design.

0501i68b.jpg Due to timing restrictions, mold production was approved to start concurrently with additional design refinements from Lexmark. After two sets of SLA masters, the design met the necessary specifications, resulting in the elimination of several secondary operations such as finishing and painting. The new molded paper transport cost 60 percent less than the sheet metal version, weighed only 7 lb vs. 16 lb, and provided ROI for development and tooling costs within six months. 

APW Plastics, Anaheim, CA
Phone: (714) 520-3800; Fax: (714) 533-3206
Web: www.apw.com 

0501i68c.jpg Battery charger prototype produced quickly, accurately 

  • Application: P12 battery charger for Apple Titanium laptop computer. 

  • Materials used: Prototype—DSM Somos 7120 stereolithography resin; production part—Cycoloy C6200 PC/ABS (GE Plastics). 

  • Manufacturer/designer: SmartDisk Corp. (Acton, MA). 

  • Molder (Prototyper): Brookfield Rapid Solutions (Hudson, NH). 

  • Functionality: This item reportedly is one of the only commercially available battery chargers using the Dallas chip, which identifies battery chemistry and state of charge. The use of the chip is said to improve safety, charging speed, performance, and battery life. 

  • Manufacturing details: Brookfield built a prototype of the P12 on 3D Systems' SLA-7000 stereolithography equipment. Secondary operations included sanding and painting. In production, the charger will be made in a P-20 single-cavity tool with molded-in texture. 

  • Challenges/innovation: Stereolithography provided speed to market with a highly compressed product development cycle. The charger went from concept to full production in just 11 weeks, according to DSM sources. In addition, the 7120 resin produced an undistorted part with low curl and minimal bubble.

DSM Somos, New Castle, DE
Phone: (302) 328-8537; Fax: (302) 328-5693
Web: www.dsmsomos.com 

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