Wal-Mart, the gPC, and Avoiding the "M" Word

by Ostatic Staff - Mar. 13, 2008

A lot has been said the past few days about the fact that Wal-Mart has dropped the $200 Linux-based PCs being offered in Wal-Mart retail stores. What's really interesting is what's not being said, and how much is being read into this.

Amanda McPherson, marketing director of the Linux Foundation, tackles the Wal-Mart topic (and manages to throw the word shadenfreude around a little bit...) with some interesting insight:

Obviously there is a market for these computers. But just like any new product, you have to target the right market. Is someone running into the supermarket (Wal Mart, I think, is the US’s largest food retailer now (scary)) the right target for a Linux-based desktop right now? Based on the comments on Wal Mart’s site, I would say no. For people who don’t understand what an OS is or what software does, this may not be the right product. For someone who wants a second computer to access the Internet and online documents/mail/calendar that I use everyday, the $199 PC makes a lot of sense, but that’s certainly not everyone and certainly not yet.

Amanda is right, of course -- Wal-Mart's customers (to make a sweeping generalization) by and large don't grok Linux as a product.

What's interesting here is that no one is using the right word. No, not shadenfreude (even if it is a fun word to use). The word is marketing. Even though the gOS PCs were touted in the press with wild abandon, no one has really done any marketing for the PCs.

It's little wonder that Wal-Mart didn't see the machines flying off the shelves. How much marketing did Everex put into its Linux line? Were Wal-Mart's main customers going to have any idea about that $199 PC, or were they just hoping that the sub-$200 price tag, plus a tiny boost by the "Wal-Mart is selling Linux in stores" stories, would be enough to drive sales to acceptable levels?

I don't claim to be an expert on retail, but here's what I am relatively sure of:

  • Wal-Mart likes to stock products that carry a decent margin. On a $200 PC, there's not a lot of margin to be had.

  • Wal-Mart probably works with a lot of suppliers that pay Wal-Mart for advertising in some fashion or another -- either they give deeper discounts for prime shelf space and/or space in Wal-Mart circulars and advertising, or they outright pay for the privilege of being put in Wal-Mart's advertising. Again, I doubt Everex was ponying up big bucks to be featured in Wal-Mart's advertising when they're selling a bare-bones system with little margin.

So, Everex's absence from the retailer's physical stores -- when they're still selling the PC on Wal-Mart's Web site -- doesn't say much to me about the viability of Linux PCs in the retail market.

What it does say to me is that, to compete in the retail market, Linux vendors (and perhaps the Linux Foundation) will have to focus on stronger marketing. If you look at the other vendors featured prominently in Wal-Mart, they don't shy away from spending the marketing dollars.

Apple has made great headway against Windows the past few years, in no small part due to insanely effective marketing. While I'm willing to accept that Apple has made headway in part because it has offered a fine alternative to Windows, I suspect its numbers would have barely budged if Apple had silently slipped iMacs and MacBooks into stores and hoped that they sold on the merits.

No. Apple has increased its market share in very large part due to a very effective, and very expensive, marketing campaign.

So, we shouldn't be surprised when retailers don't see the kind of results they were looking for when a low-cost Linux PC is slipped in with little fanfare. It's all about the marketing at that point.

Joe 'Zonker' Brockmeier works for Novell as the openSUSE Community Manager. Opinions expressed here do not necessarily reflect those of Novell.