Crapware Often Key to PC Profitability

by , 1:30 PM EDT, April 18th, 2007

PCs exist in a highly competitive, commodity market. Making a profit on a cheap PC depends on the revenue generated from crapware, according to C|Net on Wednesday.

While adding all the demo software to PCs, known as crapware, makes money for the PC vendors, the practice is starting to alienate customers.

It all started when starry-eyed vendors thought they could give away PCs and make money with crapware subsidies and advertising bounties with ISPs.

"While those dreams have largely faded, companies have continued to make money from including trial software, desktop icons and more recently, by agreeing to include a toolbar or other service from the leading Internet search providers," Ina Fried wrote.

The revenue generated these days amounts to only about US$10 or $20. But on a $400 computer, that's a big deal. It's also a big deal for irritated customers.

"Apple, for its part," the author noted, "is playing off the growing outcry, highlighted in a recent column by Walt Mossberg in The Wall Street Journal. In a new ad that debuted this week, the "PC guy" played by John Hodgman appears so bloated he can barely move."

"It's all this trial software," Hodgman says in the spot. "They pack my hard drive full of it, all these programs that don't do very much, unless you buy the whole thing...it really slows me down."

Apple avoids the crapware by passing on cheap systems and making only higher priced computers on which they can make money. In addition, the trial software that is put on a Mac is very limited and non-intruding. That translates into better customer satisfaction.