Asustek started out making circuit boards for Dell. They approached dell to do Motherboards for them, offering 20% less. Dell agreed, cos revenues were unaffected, while profits increased. The deal is a Win-Win.
Asustek, then took over motherboard, the assembly, supply chain, and design, in a similar fashion. Now, Asustek goes to Bestbuy instead of Dell, offering a PC that is 20% less in price.
This according to Steve Denning is because, the focus today is on short term profit increase. The long term value proposition is totally forgotten. This has deeper implications, as over a period of time, America would lose its ability to manufacture. The key innovation and process would be with China.
Read More at Forbes - Why Amazon Can’t Make A Kindle In the USA
