Low noise – A cost adder, old-school tangible end user value or even a good business opportunity?

We all know that any noisy electronic device like a projector, gaming console or a PC is quite annoying. We also know that there are pretty simple solutions to the problems, so why is it that we have to accept it? Or in other words, is it fair that we have to accept noisy devices, when there are simple solutions to it?

Many PC’s and notebooks are really noisy. In all fairness they are almost quiet in idle mode (and so what), and apparently many PC vendors and ODM’s think they can fool the end user. As soon as you start to apply some sort of stress, fans start to spin up and you get an unbearable noise. A PC or any electronic home device should be limited to 30 dB(A) by law if you ask me. Today they are right up there between public and crowded places…

We have conducted our own surveys and I have read several industry surveys that end users are willing to pay between $50 and $100 for lower noise. Guess what – our LCLC that can bring the noise down to really low levels can easily be implemented for way lower cost than this (remember to subtract the cost of the air cooler also), so there is not really any excuse for not doing it. Here is a recent industry article done by Objective Analysis. It is very good and touches upon this issue.

So why is it that the OEM and ODM’s do not do it? First of all there are actually a FEW vendors doing it. Look at HP’s Blackbird with liquid cooling on the graphics cards (these graphics cards are basically inaudible with liquid cooling) or Boxx who recently released low noise liquid cooled Workstation. A few examples aside there are almost no one who is really taking this seriously. They would rather hold their customers hostages than offering them some real old fashioned tangible value.

I spoke with a large PC vendor the other day and their comment was that they understood that liquid cooling could solve the acoustic issues with PC’s but they could not absorb the extra BOM cost, as the market was so commoditized that low cost was the only important driver and if we would sell our liquid cooling lower cost than air cooling, they would be happy to design it in…(!)

In my view this is a very short term and narrow-minded way of doing marketing – here is why:

1. As PC’s are moving in to people’s living room and becoming smaller in form factor, noise WILL become a key end user selection factor. The innovators in the PC market will be prepared for this (who said Apple?), but the rest will fall behind with their single digit margins and commodity mindset. For those who missed it, we are in 2008 now, and people want more than a beige box at low cost.
2. As I mentioned before end users are willing to spend significant money to get a low noise machine. Is it not incredible that the ODM and OEM’s are so focused on cost that they forget to pick up the gold just in front of their nose? In these “lean” days, adding SKU’s to your product portfolio is not the trend; however having identical products, where one model is low noise is not really a big deal.

So what do I mean with gold in front of their nose? Well I mean low hanging fruit! Let us just assume a cost delta of $30 – $40 to silence a PC. If you are in the “narrow-minded all about low cost PC” thinking, you would probably think “how can I compete with a higher BOM than my competitor?”

If you, at the other hand, are the innovative forward thinking type of marketer you would probably think “wow for only $30 – $40 I can implement a feature that customers will pay a premium for, get MUCH higher margins and capture market share!”

If you have read my previous posts, you would know I like to do sanity checking. Let us not make an exception here. Let us start with the Dell XPS 730 and compare it with the Dell XPS 730 H2C. Check out the specs and you will find that the only difference is liquid cooling. Check out the price difference and you will find a several hundred Dollar price difference!

It does not exactly require a PhD in rocket science to figure out that they are putting significant money in their pockets every time they sell the “H2C” option. If this is not great marketing I do not know what is, so do not tell me that liquid cooling is just added cost that will make the vendor unable to compete.

You could argue that the gaming/enthusiast space it a bit different, as liquid cooling also cater to the “cool factor” and I tend to agree with that assessment. In a professional type PC people do not really care what is inside as long as it works. So let us look at workstations instead. HP launched a liquid cooled workstation last year as a low noise option to their standard program. If you look at the specs and the price you will find a similar story as the Dell XPS 730.

I have an OEM-built Home Theater PC (HTPC). It is a nightmare – remember I am from Denmark where we do not have air conditioning running, so the ambient noise is low. As soon as this PC does anything else than web browsing it becomes noisy. Even when watching the news at moderate volume, I can hear the fans. The OEM (it is actually an ODM design that multiple vendors carry) specifies the noise level at low ambient and idle state and I was stupid enough to buy in to it Undecided

I think Windows (it is simply not working or is way too complex for Mrs. Average Joe to figure out) and noise are the two key preventers for getting PC’s successfully integrated in to the living room (and bedroom for that sake). So all this comes down to the fact that the PC vendors actually DO have a choice, and I think they are going to realize sooner than later, that low noise is a must, and if they do not get it, their sales and market share will go down at the same strength as their procurement departments will keep their focus on low cost only…

You could argue that you could silence a PC even without being liquid cooled. In some cases I agree to that. However with the current trends of PC’s getting smaller, I think liquid cooling is the only viable solution going forward, providing you want to keep decent desktop performance in a small form factor and low noise. As you can read in here, I do not think that the requirement for CPU/GPU power is going to decline anytime soon.