corporate notebook pc customer satisfaction€¦ · perceived supply chain and repair time...

© 2008 Technology Business Research, Inc.

TBRT EC H N O LO G Y B U S I N ES S R ES EAR C H , I N C .

August 27, 2008

Notebooks: Corporate IT Buying Behavior & Customer Satisfaction Study

Second Calendar Quarter 2008CORPORATE NOTEBOOK VENDOR

2Q08 TBR RANK

2Q08 WSI SCORE

2Q08 Strength/Weakness Points

Dell 1 83.4 +8Lenovo 1 83.2 +9HP 2 81.5 +2Toshiba 3 79.4 ‐4MPC/Gateway 4 77.8 ‐10Publish Date: August 27, 2008

Author: Julie Perron

IBM Market Intelligence

© 2008 Technology Business Research, Inc.2

Second Calendar Quarter 2008Corporate Notebook PC Customer Satisfaction

TBRTechnology Business Research, Inc.

Table of ContentsExecutive Summary 3

Critical Metrics Summary 4State of the Marketplace________________________________________________________________________ 6The Score in 2Q08 7Competitive Strengths and Weaknesses 9Defining Moments of 2Q08_____________________________________________________________________ 132Q08 Event Summary 14Annotated Analysis: Dell in the Spotlight___________________________________________________________27TBR’s Watch List 29Historical Record 43

2Q08 In-depth Analysis 46Understanding the 2Q08 Ranking Positions 47Analysis of Shifting Current Positions 53Tracking the Satisfaction Indices 54GAP Analyses: Tracking Expectation Fulfillment 58Trends of the Reporting Period 72Improvements GAP Analyses 77The Loyalty Factor 82Notebook PC Differentiation 86

Appendix A: Analytical Graphs and Tables 90Appendix B: Notebook Customer Satisfaction Scores 3Q05 Through 2Q08 99Appendix C: Calendar Quarter Movement__________________________________________________________________102Appendix D: Satisfaction Trends by Competitor 108Appendix E: Confidence Graphs__________________________________________________________________________114Appendix F: Study Design & Methodology 123Appendix G: Analytical Procedures 130Appendix H: Survey Instrument 139





Executive Summary




TBRTechnology Business Research, Inc. Critical Metrics Summary

Table of Vital Statistics for the 2Q08 Corporate Notebook Satisfaction Competition

WSI = Weighted Satisfaction Index, a summation score calculated by combining satisfaction ratings for each measured attributed weighted by the stated relative importance of each attribute. The score is calculated for each study respondent where the final WSI for each vendor represents an average of scores for its customers in the study sample.




TBRTechnology Business Research, Inc. Critical Metrics Summary

Table of Vital Statistics for the 2Q08 Corporate Notebook Satisfaction Competition





If environmental concerns do not make it to the top of the list of priorities for U.S. corporations, the potential savings realized by adhering to the new standards certainly should. The systems manufacturers have all increased their focus on new, energy-saving notebook designs and hope to boost customers’ perceptions of their value propositions. EPEAT energy compliance consists of 23 required selection criteria and 28 optional criteria across eight categories (e.g., reduction of environmental selection materials, design for end of life, energy consumption, and packaging). Any products registered afterJan. 22, 2008 that did not meet Energy Star 4.0 requirements were removed from the list. EPEAT registers products in three classes of compliance: Bronze (meets all required criteria); Silver (plus 50% of optional criteria); and Gold (plus 75% of optional criteria). Below is the most recent listing of EPEAT-compliant business notebook models for the five manufacturers covered in this report.

State of the Marketplace

The corporate notebook value proposition turns a lighter shade of green

Product Rating Pts Product Rating Pts Product Rating PtsDELL Latitude D630 Gold 21 Lenovo ThinkPad W500 Silver 17 Toshiba Tecra A9‐PTS53U Gold 21DELL Latitude D630 ATG Gold 21 Lenovo ThinkPad X200 Silver 17 Toshiba Tecra M9‐PTM91U Gold 21DELL Latitude D631 Gold 21 Lenovo ThinkPad R500 Silver 17 Toshiba Tecra A9‐PTS52U Gold 21DELL Latitude D630c Gold 21 Lenovo ThinkPad T61 (GMA Graphics) Silver 15 Toshiba Portege R500 ‐ PPR50C Gold 21DELL Latitude E6400 Gold 21 Lenovo ThinkPad T61 (NVIDIA Graphics) Silver 15 Toshiba Portege M700/710 ‐ PPM70U/PPM71UPPM72U Gold 21DELL Dell Precision M2400 Gold 21 Lenovo ThinkPad T61 14W (GMA Graphics) Silver 15 Toshiba Portege M700/M710 ‐ PPM70C/PPM71C/PPM72C Gold 21DELL Latitude E6500 Gold 21 Lenovo ThinkPad T61 14W (NVIDIA Graphics) Silver 15 Toshiba Tecra M9 ‐ PTM91C Silver 20DELL Dell Precision M4400 Gold 21 Lenovo ThinkPad T61 15W (GMA Graphics) Silver 15 Toshiba Tecra A9 ‐ PTS53C Silver 20DELL Precision M2300 Mobile Workstation Silver 20 Lenovo ThinkPad T61 15W (NVIDIA Graphics) Silver 15 Toshiba Tecra A9 ‐ PTS52C Silver 20DELL Latitude XFR D630 Silver 19 Lenovo ThinkPad T61p 15W (NVIDIA Graphics) Silver 15 Toshiba Satellite Pro S300 PSSBAU Silver 20DELL Latitude D531 Silver 17 Lenovo ThinkPad R61 14W (GMA Graphics) Silver 15 Toshiba Tecra A10 PTMB3U Silver 20DELL Latitude D830 Silver 17 Lenovo ThinkPad R61 14W (NVIDIA Graphics) Silver 15 Toshiba Tecra M10 PTMB3U Silver 20DELL Precision M4300 Silver 17 Lenovo ThinkPad R61 15W (GMA Graphics) Silver 15 Toshiba Tecra M9‐PTM90U Silver 19DELL Latitude D430 Silver 17 Lenovo ThinkPad R61 15W (NVIDIA Graphics) Silver 15 Toshiba Tecra M9 ‐ PTM90C Silver 19DELL Latitude D530 Silver 17 Lenovo ThinkPad R61e 15W (GMA Graphics) Silver 15 Toshiba Tecra M6 ‐ PTM60C Silver 19DELL Latitude XT Silver 16 Lenovo ThinkPad X61 * Silver 15 Toshiba Satellite L300 ‐ PSLB0, ‐PSLD1, ‐PSLB1 Not Rated 19DELL Precision M6300 Silver 15 Lenovo ThinkPad X61s * Silver 15 Toshiba Satellite M300‐PSMD0 Silver 19HP Compaq 2510p Notebook PC Gold 21 Lenovo ThinkPad X61 Tablet * Silver 15 Toshiba Satellite U400‐PSU41,‐PSU40 Silver 19HP Compaq 2710p Notebook PC Gold 21 Lenovo ThinkPad SL400 Silver 15 Toshiba Satellite P300‐PSAJ1,‐PSPC4,‐PSPC1,‐PSPC0 Silver 19HP Elitebook 6930p Notebook PC Silver 19 Lenovo ThinkPad SL500 Silver 15 Toshiba Satellite L350 PSLD0 Silver 19HP Compaq 8710p Notebook / 8710w Mobile Workstation Silver 18 MPC E‐155C Silver 17 Toshiba Satellite L350D PSLE0 Silver 19HP G7000 series Silver 17 MPC E‐155C G Silver 17 Toshiba Satellite L350/355, PSLD8; Satellite Pro L350, PSL Silver 19HP Compaq 6715b Notebook PC Silver 17 MPC E‐100M Silver 16 Toshiba Satellite A300/305 PSAG8, PSAGC; Satellite Pro A3 Silver 19HP Compaq 6520s 6720s 6820s Notebook PC Silver 16 MPC E‐100M G Silver 16 Toshiba Satellite L300/L305, PSB8; Satellite Pro L300, PS Silver 19HP G6000 series Silver 16 MPC E‐100M SB Silver 16 Toshiba Satellite M300/M305 PSMDC; Satellite Pro M300 PSMD Silver 19HP Compaq 6510b, 6710b, 6710s Notebook PC Silver 15 MPC E‐475M Silver 16 Toshiba Satellite U400 PSU44; Satellite Pro U400 PSU45 Silver 19HP Compaq 6715s, 6515b Notebook PC Silver 15 MPC E‐475M G Silver 16 Toshiba Satellite A300D‐PSLC1, ‐ PSLC0 Not Rated 18HP Compaq 6910p Notebook PC Silver 15 MPC E‐265M Silver 16HP Compaq 8510p Notebook / 8510w Mobile Workstation Silver 15 MPC E‐265M G Silver 16Lenovo ThinkPad X300 Gold 21 MPC E‐295C Silver 16Lenovo ThinkPad R400 Silver 18 MPC E‐295C G Silver 16Lenovo ThinkPad T400 Silver 17 MPC TransPort T2500 Silver 15Lenovo ThinkPad T500 Silver 17 Toshiba Portege R500 ‐ PPR50U Gold 22 Source: EPEAT (Electronic Product Environmental Assessment Tool)





Dell joins Lenovo in No. 1 spot; both gain several new competitive strengths

Dell’s WSI advances an additional* 2.3%, the most improved performer in 2Q08

• Satisfaction positions were significantly improved, led by perceived supply chain and repair time effectiveness.

• Dell renewed competitive strengths that had been dormant in recent reporting periods - delivery time, repair time, ease of doing business and notebook value.

Lenovo’s WSI increases an additional* 1.3%, retaining its No. 1 placement

• Gains were led by satisfaction with delivery time, notebook value, hardware reliability, notebook value and phone support.

• Renewed competitive strengths included hardware reliability, phone support, and repair time, along with Lenovo’s first-ever ease of doing business advantage.

HP’s WSI remains constant• Most satisfaction positions were flat from 1Q08 to 2Q08,

yet phone support positions receded.• HP retained its ease of doing business competitive strength.

Toshiba’s WSI recedes by 1.7%• Declining positions were led by supply chain, technical

support and product integrity issues.• Competitive warnings were reissued in the areas of repair

time and ease of doing business.

An additional and substantial 3.4% decline in MPC/Gateway’s WSI drops its placement to No. 4

• Satisfaction positions declined significantly across the board, led by supply chain and technical support issues, along with thehardware reliability rating.

• MPC/Gateway was issued four new competitive weaknesses that had previously (2007) been strengths: delivery time, parts availability, repair time and ease of doing business.

* WSI positions of Dell and Lenovo advanced in both 2Q08 and 1Q08 against levels of the preceding reporting periods.

The Score in 2Q08

2Q08 vs. 1Q08 CORPORATE NOTEBOOK WEIGHTED

SATISFACTION RATINGS & RANKINGS

83.282.181.7 81.581.5

83.4

80.779.4

80.5

77.8

75.076.077.078.079.080.081.082.083.084.085.0

1Q08 2Q08

Lenovo HP Dell Toshiba MPC/Gateway

SOURCE: TBR.

21

3

1

4

2 2

3

1

3

TBR





MEAN SATISFACTION POSITIONS AMONG

CORPORATE NOTEBOOK SYSTEMS MANUFACTURERS, 2Q08

4.60

4.80

5.00

5.20

5.40

5.60

5.80

6.00

6.20

6.40

HardwareQuality/Reliability

ProductDesign

DeliveryTime

PhoneSupport

PartsAvailability

RepairTime

OverallValue

Ease of DoingBusiness

OverallSatisfaction

Grand Mean

Dell MPC/Gateway HP Lenovo Toshiba

TBR

SOURCE: TBR.

2Q08 satisfaction highlights performance differentiation across every categoryIn most cases, Dell and Lenovo performed significantly higher than industry averages,

MPC/Gateway and Toshiba below

The Score in 2Q08

Areas where the greatest number of performance difference incidences were observed were all related: parts availability, influencing systems manufacturers’ ability to efficiently perform repairs, and the associated perception of ease of doing business. In these cases, four of the five competitors performed either above or below the industry averages.

Arrows designate significantly different performances against industry averages for each of the categories. All noted differences were statistically significant at a minimum 95% confidence level.





Competitive Strength and Weakness determinations point to Dell and Lenovo as substantially improved

Determinations are based on two-pronged results: statistical significance tests (three tests) and GAP analyses (two tests)The top three players exhibited a vast array of distinguishing performances:

• Dell held its parts availability competitive strength (successfully converted from a 1Q07 warning) while adding three strengths that had not been in place since early 2006: delivery time, repair time and notebook value. Dell also regained its past (late 2005) ease of doing business competitive strength.

• Lenovo maintained its product design competitive strength, while renewing three others that had been on hiatus: hardware reliability, phone support and repair time. Ease of doing business presented as a first-time strength. Parts availability also remained as a strength, yet softened to a marginal determination as it was overshadowed by Dell’s performance.

• HP was largely a neutral performer with the exception of ease of doing business, its second consecutive competitive win. Its delivery time strength of the previous three reporting periods was rescinded due to Dell’s stronger performance.

Competitive Strengths & Weaknesses

Dell and Lenovo may share a few competitive strengths (parts availability, repair time, ease of doing business), but that is where the similarities between these two No. 1 players end. Dell earned singular distinctions for delivery time and notebook value; Lenovo for hardware reliability and product design. Dell is viewed as the more successful services company, Lenovo as a product innovator, with some crossover.

YELLOW shaded boxes represent areas where positions have declined, e.g., competitive strength downgraded to neutral, neutral downgraded to warning, etc.

BLUE shaded boxes represent areas where positions have improved,e.g., removal of a warning, transition from weakness to warning,emergence of a new strength, etc.





Competitive Strength and Weakness determinations point to MPC/Gateway as the most compromised; Toshiba revisiting some past concerns

Determinations are based on two-pronged results: statistical significance tests (three tests) and GAP analyses (two tests)

• Toshiba continued to underperform in the marketplace relative to satisfaction with parts availability, downgraded from a warning in 1Q08 to a full weakness by 2Q08. Repair time returned as a competitive warning after a two-reporting-period hiatus. Ease of doing business, an area strongly correlated to both repair time and parts availability, also emerged as a competitive warning.

• MPC/Gateway was cited with five full competitive weaknesses. Hardware reliability was downgraded from a warning in 1Q08 to its current full weakness status. Among the four new competitive warnings, several were once competitive strengths (during 2007 when MPC/Gateway was a No. 1-ranked performer). These include parts availability (strength for five periods from 4Q06 to 4Q07), repair time (strengths in 3Q07 and 4Q07), and ease of doing business (strengths for four reporting periods from 3Q06 to 2Q07).


Both Toshiba and MPC/Gateway are currently challenged in meeting customer expectations for supply chain/logistical concerns (parts availability and/or delivery time) and technical support. The ease of doing business metric is the link that ties it all together; TBR research has demonstrated that perceptions of relationship quality are correlated with ease of ordering and technical support.

YELLOW shaded boxes represent areas where positions have declined, e.g., competitive strength downgraded to neutral, neutral downgraded to warning, etc.

BLUE shaded boxes represent areas where positions have improved,e.g., removal of a warning, transition from weakness to warning,emergence of a new strength, etc.





Competitive Strength and Weakness determinations confirm Dell’s and Lenovo’s No. 1 placements


• The WSI positions of Dell and Lenovo were nearly a precise match, at 83.4 and 83.2, respectively. This, in itself, assures the two competitors of sharing a ranking position. Their distances from the WSI of HP was more than 2%, enabling them to share the No. 1 ranking position over HP’s No. 2.

• Dell and Lenovo also earned a fair number of competitive strengths, with Dell’s designations aligned more closely with the top customer priorities, earning strengths in two of the top three areas. While Lenovo earned a greater number of competitive strengths, most were aligned at the lower end of the priorities, with the exception of the top concern, hardware reliability, where Lenovo earned a full competitive strength. In the end, the WSI calculations between Dell and Lenovo evened out, while the two clearly excelled in different areas, with the exceptions of parts availability and repair time.

• HP’s No. 2 ranking position was based on the distance of its WSI from that of the Dell/Lenovo average (2.2%). HP earned one competitive strength, located approximately at the midpoint of customer priorities.





Competitive Strength and Weakness determinations confirm No. 3 and No. 4 ranking positions of Toshiba and MPC/Gateway


• Toshiba’s WSI position was at a 2.6% deficit from that of HP, resulting in a subordinate No. 3 ranking position. In addition, Toshiba was cited with one full competitive weakness (for parts availability, about midway down the list of priorities) and two competitive warnings, one of which occurred within the third most important criterion, ease of doing business.

• MPC/Gateway’s WSI position lies at a 2% distance from that of Toshiba, knocking it down to a No. 4 ranking position behind No. 3 Toshiba. In addition, five full competitive weaknesses were scattered across the categories, two of which were placed within the top two customer priority areas, hardware reliability and parts availability.





2Q08 was a particularly active reporting period, showing substantial improvement on the parts of Dell and Lenovo, and declines for MPC/Gateway and Toshiba

• Dell gained one ranking position (from No. 2 to No. 1) in 2Q08, due to some substantially improving satisfaction positions, particularly in the areas of delivery time, parts availability and repair time, which largely contributed to the 2.3% increase in its WSI.

• Had Lenovo not also improved its positioning in some key areas, Dell might have been the sole No. 1-ranked vendor. However, Lenovo’s satisfaction positions advanced across a number of areas, most notably relative to delivery time, hardware reliability, notebook value and ease of doing business. These developments contributed to the 1.3% increase in Lenovo’s WSI positions from 1Q08 to 2Q08.

• Note that the overall satisfaction increases for Dell and Lenovo mirror their overall performance gains in 2Q08.• The 1.7% decline in Toshiba’s WSI rating was influenced by a lack of improvement in any area and some significant drops in the areas of

parts availability, repair time, hardware reliability, ease of doing business and product design. Toshiba’s overall satisfaction rating decline reflects this trend.

• The sizeable 3.4% decline in MPC/Gateway’s WSI position in 2Q08 was influenced by sweeping declines across most areas. Its overall satisfaction rating decline reflects this.

Proportional shifts of 2% or greater are considered significant changes.

Defining Moments of 2Q08

PERCENT CHANGE IN MEAN SATISFACTION POSITIONS, 1Q08 to 2Q08

-6%

-4%

-2%

0%

2%

4%

6%

DeliveryTime

PartsAvailability

PhoneSupport

Repair Time HardwareReliability

Value Ease ofDoing

Business

ProductDesign

OverallSatisfaction


SOURCE: TBR.

TBR





Corporate notebook customer satisfaction competition points to continuing domination for Lenovo in product design

• Product design satisfaction remained a performance differentiator for Lenovo, as has been the case for seven of the past eight reporting periods. Toshiba’s mean position dropped enough to effect a shift from its 1Q08 competitive strength to a neutral determination.

2Q08 Event Summary – Performance Differentiators

Lenovo’s mean satisfaction position was determined to have run significantly higher than the industry average while Toshiba’s was not, due to a 2% decline in position while Lenovo’s remained constant.

Lenovo benefited from a much higher concentration of upper levelscores than competitors. Toshiba’s mean score was affected by a shift from the higher quadrants to a considerable number of “5”(meaning “good”) ratings.

SATISFACTION WITH PRODUCT DESIGN BY CATEGORY

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

<5 5 6 7


SOURCE: TBR.

TBR

2Q08





Corporate notebook customer satisfaction positions for hardware reliability show a return of Lenovo’s dominance,

while MPC/Gateway trails the industry average considerably


Lenovo not only earned significantly higher satisfaction scores, but a narrower range of scores, signifying strong opinion consensus. MPC/Gateway’s scores trailed the industry average by a significant margin and were also more spread out, indicating a higher number of dissatisfied customers than competitors. Note that Dell achieved a position comparable to that of HP and no longer trails the industry average.

Lenovo benefited from the highest proportion of perfect “7” ratings and a dearth of scores at the lower levels compared to competitors. MPC/Gateway’s distribution line lacks the steepness of those of Lenovo, HP and Dell (with higher proportions of upper‐level ratings) due to an inordinately high number of lower ratings. While Lenovo’s mean rating increased 2% in 2Q08, MPC/Gateway’s declined by greater than 4%.

SATISFACTION WITH HARDWARE RELIABILITY BY CATEGORY

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

<5 5 6 7

Dell MPC/Gateway HP Lenovo ToshibaSOURCE: TBR.

TBR

2Q08





Corporate notebook customer satisfaction perceptions of delivery time showed a renewed focus on Dell as a leader


Dell scored significantly higher than the industry average due to a substantial 5.4% increase over its 1Q08 position. HP’s position remained constant, resulting in a return to a neutral competitive performance in an area where HP had earned the sole competitive strength in 1Q08. Note that MPC/Gateway, cited with a competitive weakness in 2Q08, scored significantly lower than the industry average with a wide spread of opinion due to a high proportion of lower‐level ratings.

Dell earned its competitive strength by receiving the lowest number of <5 ratings and a higher concentration of upper‐level ratings. MPC/Gateway’s competitive weakness came about due to a 3.3% decline in its mean satisfaction rating in 2Q08 and a higher concentration of lower‐level ratings.

SATISFACTION WITH DELIVERY TIME BY CATEGORY

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

<5 5 6 7


SOURCE: TBR.

TBR

2Q08





Corporate notebook customer satisfaction perceptions of parts availability point to performance differentiation

involving four of the five players

Note Dell’s exemplary performance, earning a substantially higher‐than‐average mean rating (6.0 vs. competitors’ average of 5.5), due to a 4.3% increase over its 1Q08 position. Opinionconsensus was unusually solid. Lenovo earned a marginal (to Dell’s full) competitive strength. Toshiba scored significantly lower than the industry average due to a 2.5% decline from its 1Q08 position. MPC/Gateway was also cited with a competitive weakness, due to a substantial 5.2% decline in its mean rating from the previous reporting period.

Dell achieved a substantial number of higher‐level ratings to a relative dearth of lower ratings. Lenovo’s pattern also excelled over the competition, yet it earned fewer perfect “7” and more lower‐level ratings than Dell. Toshiba and MPC/Gateway were both burdened with a scarcity of higher ratings and a significant number of dissatisfied (<5) ratings.


SATISFACTION WITH PARTS AVAILABILITY BY CATEGORY

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

<5 5 6 7


SOURCE: TBR.

TBR

2Q08





Corporate notebook customer satisfaction perceptions of ease of doing business point to performance differentiation across all players


HP’s mean ease of doing business rating remained significantly higher than the industry average, while a nearly 2% increase in Lenovo’s rating from the previous reporting period propelled it to its first‐ever competitive win. Dell also earned a competitive strength due to a nearly 2% increase in its mean position from 1Q08. Toshiba and MPC/Gateway scored well‐below the industry average due to a 1.7% drop in Toshiba’s rating from its 1Q08 position and a more substantial 3.6% decline in MPC/Gateway’s.

Satisfaction responses among Dell, HP and Lenovo customers were similar, though HP brought in the fewest dissatisfied positions (<5). MPC/Gateway and Toshiba formed similar patterns with a high concentration of scores below the “6” (“very good”) level. The ease of doing business perception is closely linked with those relating to supply chain and technical support –areas where both Toshiba and MPC/Gateway were particularly challenged in the current reporting period.

SATISFACTION WITH EASE OF DOING BUSINESS

BY CATEGORY

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

<5 5 6 7


SOURCE: TBR.

TBR

2Q08





Corporate notebook customer satisfaction perceptions of phone support reveal a narrow advantage for Lenovo


Typically, customer opinions exhibit greater‐than‐average spread with respect to phone support, an event‐driven metric. Lenovo scored significantly higher than the industry average, earning amarginal competitive strength that was driven by a 1.8% increase in its mean rating. Note that Dell’s positioning is shaping up nicely, with a 1.9% increase in its mean position from 1Q08 and a tighter spread of opinion than those of competitors.

Note the category trendlines for phone support do not exhibit the same steepness (with concentrations of scores residing at the higher end of the scale) we observe with many of the other attributes. TBR typically observes the largest concentration of dissatisfied customers in this category, having the effect of flattening out the trendlines. Lenovo presented with fewer dissatisfied customers and the highest number of perfect “7” ratings. Note that MPC/Gateway also received a high number of perfect “7” ratings, yet this was offset by large numbers of ratings at the lower end of the scale.

SATISFACTION WITH PHONE SUPPORT BY CATEGORY

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

<5 5 6 7


SOURCE: TBR.

TBR

2Q08





Corporate notebook customer satisfaction perceptions of repair time provide Dell and Lenovo with advantages


The size of Dell’s lead over the competition was excessive, facilitated by strong opinion consensus and lifted by a 3.7% increase over its 1Q08 position. Lenovo also outscored the industry average while its position advanced only modestly from the previous reporting period. MPC/Gateway and Toshiba both placed significantly below the industry average due to noteworthy declines in position from the previous reporting period.

Dell presented with the lowest number of dissatisfied responses and a larger number of higher‐end ratings. In contrast, Lenovo earned fewer “6” level ratings than Dell but a higher number of less satisfied responses. They achieved an equal proportion of perfect “7” ratings. MPC/Gateway and Toshiba received an inordinately high number of lower‐level ratings.

SATISFACTION WITH REPAIR TIME BY CATEGORY

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

<5 5 6 7


TBR

2Q08





Corporate notebook customer satisfaction perceptions of notebook value lead to returned domination by Dell


Dell’s mean rating was significantly higher than the industry average, though all vendors’ customer responses exhibit a relatively wide spread of opinion. It would seem that customers are rethinking the meaning of value and raising their expectations accordingly. While it would appear that Toshiba and MPC/Gateway scored significantly lower than average, the spread of opinion prevented corroboration of this premise via statistical significance testing.

Dell earned the highest number of upper‐level scores and the fewest number of dissatisfied responses.

SATISFACTION WITH NOTEBOOK VALUE BY CATEGORY

0.00%5.00%

10.00%15.00%20.00%25.00%30.00%35.00%40.00%45.00%50.00%

<5 5 6 7


TBR

2Q08





Dell regains No. 1 ranking after seven-reporting-period absence

• Dell’s weighted satisfaction index advanced by 2.3%, making it the most improved performer for the second consecutive reporting period. In just two reporting periods, Dell moved from a No. 3-ranked player (throughout 2007) to No. 2 in 1Q08 and on to No. 1 in 2Q08. Substantially improved positions in 2Q08 extended across all aspects of the supply chain (components and parts availability as well as repair time).

• Dell gained back full competitive strengths for delivery time and repair time (the first since 1Q06), a marginal strength for notebook value (first since 2Q06), an enhanced strength for parts availability (reversing a competitive weakness assigned in 1Q07), and a new marginal strength for ease of doing business (last observed in 4Q05).

• Dell’s WSI trendline for the past year shows a net 0.8% increase, making it the most improved player. The increase was derived from the momentum developed during the first half of 2008 (compared to stagnant positions in the second half of 2007).

• Dell’s preliminary satisfaction positions for the upcoming 3Q08 reporting period show a 1.5% WSI increase, driven by increasing satisfaction positions across delivery time and repair time, as well as phone support.

• Success & Challenges:

• Successes: Parts availability, delivery time, repairs, notebook value, ease of doing business, differentiation strategy, loyalty.

• Challenges: Product design, where Dell continues to lag the designated leader, Lenovo.

• A Little Bit of Both: Phone support, always a challenge due to high expectations, yet Dell appears on course to better match the current standard set by Lenovo.

Bottom Line: Dell has represented itself as an effective problem solver by addressing its supply chain issues and converting its parts availability standing from one of competitive weakness to solid strength. In a market sector where this has been a widespread issue, Dell has successfully shaped itself into a company that was able to react quickly to address customer pain points. The manner in which its customers perceive Dell’s services has returned the company to its No. 1 standing in this competition. Going forward, Dell will need to build a similar reputation around its products (hardware reliability and product design) and thus everything depends on how customers will react to its redesigned next-generation E-series Latitude laptops, announced in August and rolling out over the next several months. Dell spent years researching and designing the new notebooks to meet the needs of not just IT managers, but end users as well.

2Q08 Event Summary ‐ Dell





HP remains solidly in the No. 2 ranking spot while energized Dell and Lenovo hold the shared No. 1 position

• HP’s weighted satisfaction position remained constant from 1Q08 to 2Q08, with no changes to the individual metrics aside from some modestly declining phone support and repair time positions.

• HP’s 1Q08 marginal competitive strength for ease of doing business moved up to a full competitive strength. However, HP lost hold of a three-consecutive-reporting-period competitive strength for delivery time due to significant improvement on the part of Dell.

• HP’s yearlong WSI trendline shows a modest 0.2% net increase due to the offsetting effects of increasing positions during the second half of 2007 against moderately declining positions during the first half of 2008.

• HP’s preliminary satisfaction positions for the upcoming 3Q08 reporting period exhibit continuing stability, in a sector where Delland Lenovo continue to strengthen their performances.

• HP continues to place well with respect to perceived product differentiation and continues to gain new account wins against the competition.


• Successes: Ease of doing business, hardware reliability and design, differentiation strategy, and new account wins.

• Challenges: Parts availability, repair time, and phone support, all identified as primary areas of concern via TBR’s Improvements GAP Analysis.

• A Little Bit of Both: Delivery time, where HP lost hold of the competitive strengths that endured for the previous three reporting periods. Dell’s vastly improved position has considerably lifted the bar of expectation.

Bottom Line: HP is currently confined by a competition where both Lenovo and Dell are carving out names for themselves in various areas (Dell for services; Lenovo for product integrity) and continuing to apply competitive pressures. TBR is not seeing the momentum from HP that it needs to regain the No. 1 ranking last observed in 4Q07. In particular, HP continues to run into challenges with support and logistics. A complete product refresh that began in June (the tail end of this interviewing wave) and continuing improvement efforts in the areas of support, are expected to have a more positive effect on HP’s performances moving forward.

2Q08 Event Summary ‐ HP





Lenovo holds its No. 1 ranking status while rediscovering some past competitive strengths

• Lenovo’s weighted satisfaction index position advanced 1.3% from 1Q08 to 2Q08, led by significant advances across an assortment of customer experience areas - delivery time, notebook value, hardware reliability, and ease of doing business.

• While retaining its competitive strength for product design (evident for seven of the past eight reporting periods), Lenovo regained some old favorites as well: hardware reliability (returning after a two-reporting-period absence); repair time (last observed in 3Q05 and recovered from a temporary warning in 3Q06); and phone support (last seen in 3Q05).

• Lenovo also retained its parts availability competitive strength from the previous reporting period, while earning a first-ever win for ease of doing business.

• Lenovo’s yearlong trendline shows a net gain of 0.6% due to increasing positions during the first half of 2008 against stable positionsof the second half of 2007.

• Moving into the preliminary 3Q08 reporting period, Lenovo’s WSI is showing an additional 1% increase, driven by increasingsatisfaction positions across the areas of notebook value, phone support, delivery and repair time.


• Successes: Hardware reliability and design, parts availability, phone support, ease of doing business, differentiation strategy, and customer loyalty.

• Challenges: Delivery time (always a challenge yet preliminary 3Q08 results suggest substantial improvements are in the works); notebook value (the leading reason customers switch from Lenovo to a competing brand), yet an area of potential opportunity based on improving positions heading into 3Q08.

• A Little Bit of Both: Repair time represents a conundrum – Lenovo achieved a competitive strength determination due to significantly higher-than-average ratings, yet TBR’s GAP analyses suggest customer expectations (very high and rising) need to be better met.

Bottom Line: Lenovo continues to set the standard for hardware quality, reliability and design, while also building its reputation in some of the services areas (phone support, repair time, and ease of doing business). While delivery time for new systems continues to represent an area of challenge, Lenovo only recently (in 1Q08) earned a position even with the industry average. The concept of notebook value also remains a challenge for Lenovo, where customer expectations remain difficult to satisfy. TBR believes efforts to continue to improve its supply chain will benefit Lenovo on both counts.

2Q08 Event Summary ‐ Lenovo





Toshiba is revisited by some old (previously addressed) customer concerns with support and logistics

• Toshiba’s weighted satisfaction index declined 1.7% from 1Q08 to 2Q08, led by declining positions across the areas of hardware reliability, repair time, and parts availability.

• Toshiba’s parts availability warning from 1Q08 accelerated into a full competitive weakness in 2Q08 and represents its fourth straight performance below industry averages. Two new warnings were issued – one for repair time (following a two-reporting-period hiatus), and ease of doing business.

• Toshiba’s marginal competitive strength for product design in 1Q08 was not to be repeated, due to a declining position that forfeited its status to Lenovo.

• Parts availability and technical support were areas of chronic concern for Toshiba back in 2005, and were subsequently addressed during 2006.

• Toshiba’s WSI position for the upcoming preliminary 3Q08 reporting period shows little change.


• Successes: Hardware reliability and product design.

• Challenges: Parts availability, repair time, ease of doing business, differentiation strategy, customer loyalty, and lost accounts.

• A Little Bit of Both: Phone support, the other component of technical support where Toshiba experienced continued weakening; notebook value, a continuing challenge.

Bottom Line: Toshiba’s performances across the areas of technical support and supply chain/logistics (and including parts availability) have been choppy over the past year. With the parts availability competitive weakness continuing to be evident, along with the return of repair time and ease of doing business weakness (ease of doing business being strongly correlated with both logistical and support concerns), TBR believes Toshiba needs to understand how its services may not be fully meeting customer expectations. Furthermore, Toshiba needs to determine whether the issues relate to supply chain mechanisms or actual staffing capabilities in the areas of technical support.

2Q08 Event Summary ‐ Toshiba





Broadly declining satisfaction positions for MPC/Gateway

• MPC/Gateway dropped another ranking position in 2Q08 (down to No. 4) due to a 3.4% decline in its WSI position from the previous reporting period. All positions experienced substantial declines, particularly relative to satisfaction with parts availability, repairs, and hardware reliability. Its overall satisfaction position declined 5%.

• MPC/Gateway’s 1Q08 competitive warning for hardware reliability was downgraded to a full competitive weakness. Four new weaknesses emerged, several of which were competitive strengths during MPC/Gateway’s string of five No. 1 rankings (4Q06 to 4Q07). These included parts availability (a competitive strength for five reporting periods from 4Q06 to 4Q07), repair time (strengths in 3Q07 and 4Q07), ease of doing business (strengths from 3Q06 to 2Q07), and delivery time.

• MPC/Gateway’s preliminary 3Q08 WSI shows an additional 2% decline, with all positions save hardware reliability exhibiting significant declines in satisfaction.


• Successes: None at present.

• Challenges: Hardware reliability (a principal reason cited for switching to a competing brand), delivery time, parts availability, repair time, ease of doing business, differentiation strategy, customer loyalty, and lost accounts.

• A Little Bit of Both: Product design, notebook value, and phone support.

Bottom Line: While many of MPC/Gateway’s substantially declining positions showed up beginning in the 1Q08 reporting period (and logically associated with the MPC acquisition of Gateway’s Professional business), there were some that were declining prior to the announcement – ease of doing business and supply chain/logistical issues. This strongly suggests that some issues were already developing under the watch of Gateway Professional (confirmed via TBR’s discussions with MPC) relative to manufacturing and delivery efficiencies. It is likely that the MPC acquisition announcement served to accelerate customer concerns. MPC is working to relocate facilities and streamline processes as it understands that customer confidence needs to be addressed directly.

2Q08 Event Summary ‐MPC/Gateway





Dell recovers No. 1 ranking position following seven reporting periods of challenges, entirely overcome during the first half of 2008

Annotated Analysis: Dell in the Spotlight

CORPORATE NOTEBOOK WEIGHTED SATISFACTION SCORES 1Q06 THROUGH 2Q08

76

77

78

79

80

81

82

83

84

85

86

1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08

Dell HP Lenovo Toshiba MPC/ Gateway

SOURCE: TBR.

TBR

In the 46-reporting-period history of TBR’s Corporate Notebook Customer Satisfaction Study, Dell achieved a No. 1 ranking position in 34 periods. The first two periods of 2006 represented the tail end of Dell’s predominant ownership of that position, when Dell’s leadership positions were defined by strong WSI positions and competitive advantages in areas such as delivery time, repair time, and overall notebook value. This period was followed by seven reporting periods during which Dell was outperformed by competitors, typically Lenovo, HP, and/or MPC/Gateway. Some challenges emerged during this time period (from 3Q06 to 1Q08), when Dell often grappled with customers’ perceptions of its hardware reliability and design. Throughout the reporting periods of 2007, Dell’s ranking position dropped to a No. 3 placement.





Dell recovers No. 1 ranking position following seven reporting periods of challenges, entirely overcome during the first half of 2008 (cont.)

Annotated Analysis: Dell in the Spotlight

Beginning in 2008, TBR began to observe a significant turnaround. In the 1Q08 reporting period, Dell’s WSI advanced by 1.1% where product design concerns were resolved and components availability issues were relieved (a 2Q07 warning for parts availability was transformed to a competitive strength). Dell jumped back up to a No. 2 ranking.

In 2Q08, the momentum continued, restoring Dell to the No. 1 ranking position along with the reappearance of a number of past competitive strengths, all focused on customers’perceptions of supply chain/logistical matters, customer relationships, and the perceived overall value of notebook solutions.





TBR’s watch list differs from the Competitive Strength & Weakness analysis

TBR’s Watch List

TBR takes the following factors into consideration in determining items on the Watch List:• Results of the Improvements GAP Analysis based on a vendor’s expectation fulfillment for a category against its overall

expectation fulfillment across all measured attributes.

• Competitive positioning based on results of statistical significance tests.

• Results of the Standard GAP Analysis for the vendor against positions of its competitors.

• Decline in satisfaction in the past two reporting periods.

• Loss of competitive strength.

• Items are removed from the Watch List when a vendor has recovered its competitive position from recent reporting periods.

Differences• The analysis is both backward-looking and forward-looking.

• Items placed on the Watch List are often not necessarily areas where the vendor has underperformed the marketplace or a specific competitor.

• Included are areas where a vendor may have recently excelled, yet the competitive field has shifted during the current reporting period.





Dell Watch List continues to focus on phone support and design innovation(see notes page for explanation of rationale codes)

TBR’s Watch List: Dell

Citation Rationale

Dell A B C D E NotesPhone Support

Mean satisfaction trending on the higher end and greater than HP at the 90% confidence level. Position was comparable to that of Lenovo but no competitive strength was issued due to variability of response.

Primary GAP rating +0.5% was best in class next to Lenovo's +0.7%

Increased by 1.9% in 2Q08; however, positions had been steadily declining for the previous three reporting periods. Meanwhile, Lenovo's position advanced in 2Q08, lifting the bar of expectation.

Remaining neutral while Lenovo regains its competitive strength status

While Dell's satisfaction position advanced in 2Q08, several factors contributed to its continued presence on the Watch List. The 2Q08 uptick comes at the end of three previous reporting periods of steadily declining ratings, thus there is additional ground to be recovered. Lenovo's scores also increased significantly in 2Q08, making it the vendor to beat in this category (note Lenovo gained a marginal strength for phone support in 2Q08). And perhaps most importantly, TBR's Improvements GAP Analysis points exclusively to phone support as the area with the greatest need for improvement efforts. Placing all of this into historical context, phone support has typically been an area of high reliance for Dell customers and consequently its biggest challenge.

Product Design

Comparable to industry average, yet placed significantly behind Lenovo at the 95% confidence level.

Below average

GAP rating +2% and comparable to HP, Lenovo and Toshiba

A modest dip, the only area declining in the 2Q08 reporting period. Positions have stalled in a highly competitive field.

Remaining in recovery from competitive warnings from 1Q07 through 1Q08; meanwhile, Lenovo continues to dominate

In 1Q08, Dell recovered from five previous straight competitive warnings for the product design category. Dell's rating remains neutral in 2Q08; however, TBR is keeping it on the Watch List for a number of reasons. Dell's position appears stalled amidst a highly competitive marketplace, particularly relative to Lenovo, which has earned a competitive strength in seven of the past eight reporting periods. Dell's product design satisfaction scores made some progress during 4Q07 and 1Q08, yet its position snapped back partially (down less than 1%) in 2Q08. While this was a small magnitude adjustment, it was the only area in which Dell's scores did not increase in 2Q08.





Dell Watch List continues to focus on phone support and design innovation(see notes page for explanation of rationale codes)


Removed from Watch List:

Delivery Time. Dell’s mean satisfaction rating increased over 5%, the area with the largest magnitude improvement for Dell in 2Q08, returning possession of the competitive strength determination to Dell for the first time since 1Q06. Dell outscored the industry average significantly at the 99% confidence level in 2Q08.

Repair Time. Dell’s mean satisfaction position increased by 3.7% in 2Q08, placing it significantly higher than all but Lenovo at the 99% confidence level. Dell regained its full competitive strength status, last observed in 1Q06.

Additional Considerations:

Notebook Value. Dell regained its notebook value competitive strength in 2Q08 (its first since 2Q06) and, while it was not included in the Watch List, TBR noted a -6.6% GAP between expectation and satisfaction, outside the acceptable GAP range. Expectations for value were high among Dell customers and within the market sector overall, suggesting it is an area all systems manufacturers need to keep an eye on while boosting their value proposition messaging.

Hardware Reliability. Dell has made progress over the past four reporting periods in steadily increasing its hardware reliability satisfaction rating to reach the levels of HP and Toshiba by 2Q08. Just two reporting periods prior (4Q07), Dell’s mean satisfaction position was decidedly lower than those of both competitors.

HISTORICAL ANALYSIS OF HARDWARE RELIABILITY SATISFACTION

5.50

5.60

5.70

5.80

5.90

6.00

6.10

6.20

3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08

Dell HP Lenovo Toshiba

SOURCE: TBR.

TBR

After stalling in subordinate positions from 4Q06 through 3Q07, Dell’s mean satisfaction positions for notebook hardware quality/reliability steadily mounted a course of improvement, ending in placement alongside HP and Toshiba. This forms a strong foundation from which to measure customer responses to Dell’s newly designed products moving forward.





Dell Watch List continues to focus on phone support and design innovation

Challenge Area Developments Likely to Affect Customer Perceptions in Challenge AreasTechnical Support Dell ProSupport portfolio – introduced in February, with the company reporting positive feedback. In earlier studies, the program would

have been too new for customers to have effectively experienced it. Customized support options.Dell ProSupport Mobility Services – enhancements introduced in June with services developed specifically for mobile professionals. Includes new asset and data protection services (e.g., laptop tracking & recovery), extended battery replacement services, CompleteCare Accidental Damage policy, data protection such as remote data delete, hard drive data recovery and certified data destruction services. Attractive pricing at just $75 per laptop for three years and does not increase if more than one hard disk drive fails.

Product Design Next generation E-series Dell Latitude notebooks, announced Aug. 12, – a complete product line redesign based on two years of development and discussions with nearly 4,000 end users; includes seven new Latitude notebooks plus three new mobile workstations. Noteworthy shifts in Dell design efforts:

- All-day computing, with battery life up to 19 hours in one model;- Dell ControlPoint addresses ease of use with centralized control of user settings across power management, connectivity

configurations and security;- Dell Latitude ON for access to e-mail, calendar, etc. without having to boot OS;- Dell ControlVault solution security system uses security sub-processors with embedded storage to centralize and protect user

credentials in a “vault” location away from the system’s main drive;- Energy Star 4.0 compliance and EPEAT Gold status (E4200) includes halogen-free motherboard and chassis;- New industrial design with intelligent (automatically adjusting) backlit keyboard, full frame magnesium alloy construction and

all-metal hinges, longer-lasting paint and 3D Free Fall sensor, etc.;- ProSupport Mobility Services (described above)


Summary: Dell’s reengineered E-series Latitude notebook line represents a significant departure from past generations. Dell applied its listening skills to a new series based on the unique idea of designing directly for the user rather than the IT manager as a spokesperson for a host of end users with varying needs and tastes. According to Dell, its design addresses four areas of concern for end users: the need for all-day computing (instant gratification); inspired design - stylish, aesthetic and durable design; peace of mind (security features that protect everywhere and anywhere); and TCO (energy efficiency and other value propositions like peripherals commonality). The 3Q08 reporting period (ending Sept. 30) will likely only pick up the very early reactions, if any, to the new designs.





HP Watch List focuses on technical support and parts availability(see notes page for explanation of rationale codes)

TBR’s Watch List: HP

Removed from Watch List:

Product Design. HP’s product design mean position remained stable in 2Q08 and was comparable to the industry average. While continuing to trail Lenovo (at the 90% confidence level), TBR sees no reason for HP’s product design to remain on the Watch List, particularly since technical support and supply chain issues have taken precedenceas HP’s most immediate concerns.Additional Concerns:

Delivery Time. HP’s marginal competitive strength for delivery time, issued in 1Q08, was subsequently rescinded due to Dell’s vastly improved position. HP had earned the distinction during the previous three reporting periods.

Citation RationaleHP A B C D E NotesReplacement Parts Availability

Comparable to industry average, yet placed significantly behind Dell at the 99% confidence level and Lenovo at the 90% level.

Secondary GAP rating‐5% comparable to Lenovo but behind Dell's ‐1%.

No change in position, while Dell's rating advanced substantially.

Remaining neutral while Dell and Lenovo earn competitive strengths

Following a pair of reporting periods (1Q07 and 2Q07) in which HP's mean satisfaction positions declined markedly, positions have essentially stalled. Meanwhile, both Dell and Lenovo have been experiencing substantially increasing ratings. In 2Q08, both Dell and Lenovo outperformed HP by significant margins. From these developments, it would seem that Dell and Lenovo have been more successful than HP at immediately resolving past industrywide supply constraints.

Repair Time Comparable to industry average, yet behind Dell at the 99% confidence level and trending behind Lenovo

Primary Gap rating ‐5% was better than Lenovo but behind Dell’s ‐2%

Declined modestly (‐1.4%) while Dell's position advanced significantly and Lenovo continued to inch forward.

Remaining neutral while Dell and Lenovo earn competitive strengths

HP's repair time positions have steadily eroded over five reporting periods, including the current period when HP's position declined against significant gains for both Dell and Lenovo. Subsequently, HP is currently positioned at a significant disadvantage to Dell (at the 99% level of confidence) and moderately lower than that of Lenovo. This issue is related to the parts availability and phone support concerns ‐ all tied in with recent components shortages and the varying abilities of systems manufacturers to weather the storm.

Phone Support

Comparable to industry average, but behind Dell at 90% confidence level and Lenovo at 95% level.

Primary GAP rating ‐1% close to 0% average of Dell and Lenovo.

Declined 2.2%, the only area receding significantly in 2Q08. Positions have declined for the past two reporting periods and are currently at the historical low point of 3Q05.

Remaining neutral while Lenovo regains competitive strength status

Phone support remains a top issue as it was the only area in which HP's mean satisfaction ratings declined significantly in an otherwise peaceful reporting period (repair time also declined, but more modestly). HP's 2Q08 position is at an historic‐low point and significantly trailing both Dell and Lenovo. Some of this is connected with component supply issues (TBR analysis points to strong correlations between phone support, repair time and parts availability satisfaction) while it is also associated with concerns that have been present with traditional HP PSG phone support for the past several reporting periods.





HP Watch List focuses on technical support and parts availability

TBR’s Watch List: HP

Challenge Area Developments Likely to Affect Customer Perceptions in Challenge AreasTechnical Support Phone Support – HP’s PSG group recently cleaned up its IVR system with a simplified, shortened path. Going forward, HP will use

separate queues to meet more specialized needs of customers. The company continues to focus on improvement initiatives through incremental technical training and skills development for its call agents. HP also continues to improve its troubleshooting procedures such as enhanced call agent soft skills and taking up the case from where it was last left off to ensure resolution continuity.On-site Support – New on-site intervention for large accounts, utilizing client advocates and diagnosis. HP bench model replaces partner approach of the past; completion of HP-badged transition on July 1.HP’s PSG reports that service problems have been recently resolved, and it is currently beefing up its on-site support side. They expect TBR results to reflect this during the next calendar quarter.

Supply Chain Parts Availability – HP’s PSG has completed the transitioning of its logistical processes on the notebook side through selective transition to new partners. Improved logistical capability and capacity with supplier flexibility via redesigned terms and conditions. HP has invested in supply forecasting and monitoring and has applied a regional repair model to improve on this. Defective part lots can be traced via ASER metrics where HP has noted generation-to-generation improvements. Corrective actions include containment, analysis, preventative action, all enacted within 90 days.

Product Design HP recently made a branding change, debuting its new EliteBook premium brand line between June and August with 10 new models merging functionality and durability with sophisticated design. HP believes this line is differentiated from the competition based on:

- Industrial design featuring the HP Duracase, a set of “visually appealing and reliable features” such as brushed anodized aluminum casing bonded to a magnesium alloy chassis for a 6x improvement in scratch resistance for its ruggedized ultraportable offering;

- Successful testing against truly rugged PC specifications (for the above);- The Durakey concept for keyboards has been moved down to protect the touchpad;- QuickLook 2, providing access to calendar and e-mail without having to boot up the system;- Single-standard wireless, offering customers the flexibility of all wireless options in a single module;- BioSanitizer, for deleting individual files, improved over the previous Disk Sanitizer.

Summary: HP has completed a complete product refresh that focuses on simultaneously enhancing ease of use and security while improving durability and style. TBR sees innovation in product design as a critical step in this increasingly intense competition, and HP and Dell have both come forth with bold new designs. We believe the manner in which customers react to the new stylistic elements will have a psychological effect in this competition. For HP, future success opportunities also include its technical support and supply chain (parts availability) positions. If the recent improvement efforts (now reportedly complete) have a positive effect, we will begin to see that in the 3Q08 reporting period.





Lenovo’s Watch List focuses on the value proposition and some lingering supply chain concerns (see notes page for explanation of rationale codes)

TBR’s Watch List: Lenovo

Citation RationaleLenovo A B C D E NotesDelivery Time

Comparable to industry average but trending behind Dell

Secondary GAP position ‐6.3% with Dell and HP averaging ‐3%

Increased by 2.5%, the largest magnitude gain for Lenovo in 2Q08. Up substantially for the past two reporting periods and setting new historical high point. Nonetheless, Dell's position advanced by greater than 5% in 2Q08.

Remaining neutral; last warning issued in 1Q06, while Dell regains competitive strength status.

Lenovo appears to be on the way to full recovery relative to historical challenges with its supply‐chain model. Not only did its delivery time mean satisfaction rating increase by the largest magnitude of the improving positions in 2Q08, but positions have increased for the past two reporting periods. Its 2Q08 mean position is about even with the 2Q06 position, which preceded a long and steady state of decline that appears to have ended in 4Q07. Lenovo’s delivery time remains on the Watch List due to TBR's Improvements GAP Analysis results; it will remain there until converted into an area out of the spotlight for needed improvement. If current trends continue, it may just do that by the next reporting period.

Repair Time

Placed significantly higher than the industry average at the 90% confidence level yet Dell exceeded average at the 99% level.

Primary GAP rating ‐6.3% with Dell and HP both within acceptable GAP ranges.

Increased by 1% while Dell's position advanced by close to 4%.

New full competitive strength earned, the first since 3Q05; last warning issued in 3Q06

Lenovo did gain a competitive strength determination for repair time, its first since 3Q05. It is unusual for TBR to place a competitive strength area on the Watch List. Its presence on the list was driven by its citation as a primary area requiring improvements efforts (via TBR's Improvements GAP Analysis) as well as its GAP rating, which was outside the acceptable GAP range in contrast to Dell’s and HP’s positions, which were well within reasonable ranges (Dell and HP).

Notebook Value

Comparable to industry average; Dell, HP and Lenovo all scored equally in 2Q08.

Average GAP rating‐10% (compared to Dell/HP average ‐6%) due to rising customer expectations

Increased 2.2% while Dell inched up by 1.3%. Lenovo's satisfaction positions have increased for the past two reporting periods.

Remaining neutral while Dell regains competitive strength status

Lenovo's mean satisfaction positions for notebook value have increased during the past two reporting periods and, in 2Q08, regained its prior high point of 4Q06, which preceded a long and steady state of decline that ended in 4Q07. Lenovo's mean 2Q08 position was comparable to the industry average, while also on par with its principal competitors. The decision to retain it on the Watch List was driven by Lenovo customers' high expectations for notebook value, resulting in a ‐10% GAP rating, significantly wider than the average of Dell andHP (‐6%). When customers raise their expectations to such an extent, the systems manufacturer needs to be wary of how it communicates its value proposition as well as how it manages purchase pricing.





Lenovo’s Watch List focuses on the value proposition and some lingering supply chain concerns

TBR’s Watch List: Lenovo

Challenge Area Developments Likely to Affect Customer Perceptions in Challenge AreasTechnical Support Lenovo currently excels in both its phone support and repair time satisfaction positions. Its repair time position, however, represents an

interesting contradiction in that is clearly a competitive strength, yet TBR included it on the Watch List due to extremely high customer expectations that are not being met as fully as we believe they should be. Undoubtedly, this is due to the connection between repair time efficiencies and supply chain (components supply) effectiveness, the latter of which has been a chronic challenge for Lenovo, as it was historically for the IBM PC Company. See summary below.

Supply Chain New ordering system, with software provided by Lenovo’s partner i2 Technologies, tested in Canada during late 2007; the system will be implemented globally after field testing in Canada is completed.Lenovo announced a building program to increase global manufacturing capacity by more than 20 million units per year, as discussed in TBR’s 1Q08 CBQ Lenovo report.New fulfillment center in Greensboro, N.C. opened in April, where Lenovo conducts product assembly, custom imaging/configuration, distribution services; and logistics.

Notebook Value While Lenovo’s new ThinkPad X300 family is priced at the high end of the marketplace, it includes feature enhancements the company believes are part of a solid value proposition:

- Arguably the smallest, lightest and thinnest of designs with positive press coverage;- Flexibility of design, allowing one to attach multiple USB devices;- Choice of either 64 GB or 128 GB solid state drive storage, beginning in September;- The ThinkPad X301 averages a 20% improvement in performance over the X300 due to DDR3 memory and Intel Core 2 Duo ultra

low voltage processor;- Multiple connectivity options (including WiMAX later this year);- ThinkPad Advanced Ultrabay Battery II, a rechargeable battery

Summary: Lenovo made an enormous splash in February with its ThinkPad X300, which reporters and analysts alike designated as a shining example of the company’s engineering and design leadership. Getting the jump on HP and Dell (with their June and August product line refreshes) may have assisted Lenovo in its placement in this 2Q08 study. Two things will be critical to Lenovo’s continuing success: the ability to deliver these and other ThinkPad models in the timely fashion the company has promised; and keeping customers interested in its products and aligned with the current perception of Lenovo as the design leader while HP’s and Dell’s newly designed systems hit the supply chain avenues. It will be Dell and HP that will be making headlines around new offerings in the coming months.





Toshiba’s Watch List focuses on readdressing past technical support/supply chain and associated concerns

(see notes page for explanation of rationale codes)

TBR’s Watch List: Toshiba

Citation RationaleToshiba A B C D E NotesRepair Time Performed

significantly below the industry average at 99% confidence level; behind Dell and Lenovo at 99% level as well.

Primary GAP rating ‐11%; Dell/HP/Lenovo range ‐2% to ‐6%.

Declined 2.6%, one of the three areas with the largest magnitude declines in 2Q08.

Warning returns for first time since 3Q07

A competitive warning returns after a two‐reporting‐period absence, due to a noteworthy decline in Toshiba's 2Q08 mean satisfaction position. Toshiba's positions have been in a steady state of decline since its high point of 4Q06; its current position has returned to its low of 3Q05. While part of this development has to do with recent industrywide supply constraints (which have affected depot repair effectiveness), TBR believes it also has something inherently to do with Toshiba. While Toshiba had successfully addressed parts depot issues in 2006, there has been a steady return to previous challenges that may very likely have to do with how Toshiba corporate manages its parts supplies.

Replacement Parts Availability

Scored significantly below industry average at 99% confidence; behind Dell and Lenovo at 99% level and HP at 90%.

Primary GAP rating ‐12%; Dell/HP/Lenovo range ‐1% to ‐5%.

Declined 2.5%, one of the three areas with the largest magnitude declines in 2Q08.

Warnings of past three reporting periods accelerated to full weakness in 2Q08

Remarkably similar trends and conclusions to Toshiba's competitive repair time placement, discussed above.

Phone Support

Trending lower than industry average; significantly lower than Lenovo at the 90% confidence level.

Secondary GAP rating‐4%; Dell/HP/Lenovo average 0%.

Declined 1.2% while Dell and Lenovo positions advanced significantly. Down for the past four reporting periods.

No competitive warnings since 3Q07

The overall patterns have been similar to the above, while the mean satisfaction score trendlines have not been as sharp. Toshiba was not cited with a competitive warning for phone support in 2Q08. Nonetheless, its correlation with parts availability and repair time is evident; thus, it remains in danger of eventually being converted to a warning.






(see notes page for explanation of rationale codes)


Additional Concerns:

Product Design. Toshiba earned a competitive strength determination, alongside Lenovo, in 1Q08. With its mean position declining 2% in 2Q08, Toshiba was unable to hold the distinction. The 2Q08 decline was the first of its kind following entirely stable positions throughout the previous six reporting periods. While Toshiba tends to perform better in this area (along with hardware reliability) than in the services-related areas in our studies, its ability to hold a competitive strength lacks the consistency of Lenovo.

Citation RationaleToshiba A B C D E NotesNEW‐Notebook Value

Trending lower than industry average; behind Dell at the 99% confidence level and HP/Lenovo at 90%

Average GAP rating of ‐11% was worst in class along with MPC/Gateway.

Declined only modestly (‐0.6%) while Dell and Lenovo advanced. Positions have stalled while Dell, Lenovo and HP gained ground this past year.

Remaining neutral; no warning or weakness since 4Q06

Toshiba's value proposition and pricing practices tend to recur within the Watch List. In 2Q08, TBR highlighted this area due to a mean score trending lower than the industry average and significantlybehind Dell, HP and Lenovo. Most importantly, its extremely wide standard GAP rating suggests customers are raising their expectations (in the corporate notebook arena, in general), making this a highly competitive market sector. Price and value consequently become critical in such an environment.

NEW‐ Ease of Doing Business

Performed significantly below industry average at the 90% confidence level; behind HP and Lenovo at 99% level and Dell at 95%

Average GAP rating of ‐6.4%; Dell/HP/Lenovo average ‐1.5%

Declined 1.7% while Dell and Lenovo positions advanced significantly

New warning issued in 2Q08

The new competitive warning in 2Q08 is accompanied by significantly lower‐than‐average ratings and a wider‐than‐average standard GAP rating. Toshiba's mean satisfaction positions have been in a steady state of decline since 2Q06. It is also relevant to point out the connection between how customers rate ease of doing business and how they rate supply chain and technical support issues. For Toshiba, the connection is obvious.






Challenge Area Developments Likely to Affect Customer Perceptions in Challenge AreasProduct Design Multiple upgraded and newly designed business laptop models entered the stage throughout 1H08:

- The Satellite and Satellite Pro series included several additional models that are focused on increased durability, performance improvements, and advanced security features.

- Some specific feature-rich enhancement examples on various models include face recognition software, the SpursEngine processor for improved multimedia, built-in shock absorption around the hard drive as well as 3D accelerometer, 128 GB MLC solid state hard disk drives (MLC being a format providing condensed storage that is less expensive to produce than standard SSD).

- Updated Portege R500-S507V offers the customer both a 128 GB solid state and an optical drive in a light 2.4-pound package. Toshiba used proprietary technology to shrink the motherboard down to one-third the size of a mainstream 15.4-inch notebook by enabling dual-sided motherboard component mounting.

Notebook Value Toshiba expects to enhance its value proposition by offering an extensive variety of feature-rich notebooks (such as those described above) at reasonable prices that include advanced security features and additional wireless capabilities. One example is the new Satellite Pro series of five new notebooks. One model priced close to $1,100 includes Bluetooth v2.1, a fingerprint reader, 3D accelerometer and full-sized keyboard.


Summary: Toshiba has historically been in a good place relative to the manner in which customers perceive its design innovation; product design is one of its strengths in this competition. Regardless, Toshiba was unable to maintain its competitive strength status of 1Q08 into the current reporting period. With the vast array of new offerings during the first half of 2008, it is possible that the company will receive a boost while working to improve the reception of its value proposition, where it currently trails the competitor most noted for design innovation, Lenovo. With the host of new products announced, it will be critical for Toshiba to effectively deliver these systems to customers as its supply chain/logistical standing (affecting perceptions not only of delivery time, but repair time and parts availability as well) remains its most urgent challenge.





MPC/Gateway faces accelerating challenges as the new company attempts to maintain customer confidence (see notes page for explanation of rationale codes)

TBR’s Watch List: MPC/Gateway

Citation RationaleMPC/Gateway A B C D E NotesRepair Time Scored significantly

below the industry average at the 99% confidence level; behind both Dell and Lenovo at 99% level.

Primary GAP rating of ‐17% was worst in class, against competitors' average ‐6%.

Declined 4.3%, one of the largest magnitude declines for MPC/Gateway in 2Q08. Positions have declined substantially during the past two reporting periods.

Converted from 3Q07/4Q07 competitive strengths to full competitive weakness in 2Q08

MPC/Gateway's mean satisfaction ratings have dropped precipitously in the past two reporting periods, landing significantly below the industry average. Its presence on the Watch List for 2Q08 is based on multiple converging factors, including the declines (described above), its worst‐in‐class standard GAP position, the results of the Improvements GAPAnalysis where it is designated as a primary area requiring improvement efforts, and its first‐ever competitive weakness after having been a competitive strength in both 3Q07 and 4Q07.


Scored significantly below the industry average at the 99% confidence level; behind Dell and Lenovo at 99% confidence and HP at the 90% level.

Primary GAP rating of ‐19% was worst in class, against competitors' average ‐6%.

Declined 5.2%, the area with the largest magnitude decline in 2Q08. Has been on a downward spiral since 1Q07.

Converted from previous competitive strength to full competitive weakness

A similar condition to the above, however, satisfaction positions have been on the decline since 1Q07. A competitive weakness was assigned for the first time in 2Q08 after having received five solid competitive strengths from 4Q06 to 4Q07.

Delivery Time Scored significantly below industry average at the 99% confidence level; behind Dell, HP and Lenovo at 99% and Toshiba at 90%.

Average GAP rating of ‐9% was worst in class, against competitors' average ‐4%.

Declined 3.3%, while Dell and Lenovo positions advanced substantially.

New full competitive weakness issued in 2Q08

Since mid‐2006, MPC/Gateway's mean delivery time satisfaction positions have been progressively declining. The issues dates back to manufacturing and supply chain issues encountered by Gateway Professional and currently being addressed by MPC.

Ease of Doing Business

Scored significantly below the industry average at the 99% confidence level; behind Dell, HP and Lenovo at 99% level.

Just above average

GAP rating of ‐11% was worst in class, against competitors' average ‐2.6%.

Declined 3.6%, while Dell and Lenovo positions advanced significantly. Down steadily for the past five reporting periods; may be a key indicator of current trends.

Converted from historical area of competitive strength to full weakness in 2Q08

Satisfaction positions have been declining steadily for the past five reporting periods and, because the declines started earlier than many of the remaining categories, TBR sees this as the key indicator that Gateway Professional was already experiencing some challenges before MPC acquired the unit. Note as well the strong connection between perceptions of ease of doing business and technical support and supply chain issues, all of which have broadly affected MPC/Gateway in this competition.





MPC/Gateway faces accelerating challenges as the new company attempts to maintain customer confidence (see notes page for explanation of rationale


Citation RationaleMPC/Gateway A B C D E NotesPhone Support Comparable to

industry average but trending lower than Dell and Lenovo

Average GAP ratingof ‐9% was worst in class, against competitors' average ‐1%.

Declined 1.6% while Dell and Lenovo positions increased significantly. Down steadily and substantially for the past three reporting periods.

Remaining neutral; last warning issued in 3Q07; not a leading concern

Unlike the above Watch List items, phone support is not an immediate concern, particularly since it was not cited as such via TBR's Improvements GAP Analysis. Nonetheless, satisfaction positions have been declining steadily during the past three reporting periods and, since this category is connected with perceptions of repair time and parts availability, it is an area at risk.

Hardware Reliability Performed significantly below industry average and each competitor at the 99% confidence level.

Average GAP rating of ‐19% was worst in class, against competitors' average ‐12%.

Declined 4%, one of the areas declining by the largest magnitude in 2Q08. Down substantially for the past two reporting periods and registering a new historic low.

1Q08 competitive warning accelerated to a full competitive weakness in 2Q08

Declining satisfaction relative to hardware reliability has been more recent than the services issues described above. Consequently, it is likely associated with customers' concerns regarding the MPC acquisition. Nonetheless, Gateway Professional had been cited with competitive warnings for notebook reliability from 3Q05 through 4Q06, therefore the challenge had been present in the past, followed by a recovery, only to fall back into a customer concern during the past two reporting periods.

NEW – Product Design Scored significantly below the industry average at the 99% confidence level; behind Toshiba and Lenovo at 99% and HP at 90%.

Above average

GAP rating of ‐2.5% was the only one in negative territory.

Declined 3% and down substantially for the past two reporting periods.

Remaining neutral

A recently emerging issue and, like phone support, not a leading concern at present as it has been overshadowed by more long‐term issues in the areas of support and supply chain/logistical matters. Product design satisfaction is likely being dragged down with the hardware reliability perception, as both have declined for the past two reporting periods and are correlated with one another statistically.





MPC/Gateway faces accelerating challenges as the new company attempts to maintain customer confidence


Challenge Area Developments Likely to Affect Customer Perceptions in Challenge AreasTechnical Support MPC intends to continue servicing clients through its Sioux City, S.D. customer support center. MPC only cut 10 jobs at this facility,

which employs between 400 and 450.

Supply Chain At the end of 3Q07, Gateway Professional was already in the process of improving its manufacturing efficiencies and attempting to cut costs. MPC noted that the inefficiencies were also affecting quality and delivery time, and decided to extend the improvement/cost effectiveness efforts without sacrificing quality or timeliness to deliver. Subsequently, MPC developed an outsourcing contract with Flextronics that involves moving its manufacturing process operations to Mexico. Undoubtedly, the closing of Gateway’s Nashville, Tenn. manufacturing facility caused some disruptions in service, and the effects have lingered in the minds of customers.

Relationships MPC/Gateway is working to maintain customer relationships during the transition of ownership through face-to-face and service staff engagements, while also attempting to make a smooth transition to its single ERP system.

Summary: TBR believes the trouble began at the end of Gateway Professional’s term of ownership, during which negotiations were ongoing and an acquisition was imminent. Much of what TBR has observed relative to customer concerns dates back to 2007 and involves satisfaction with delivery time and replacement parts availability. This suggests that the company’s supply chain, as well as manufacturing efficiencies, were beginning to show weakness as early as 2Q07. When MPC acquired Gateway Professional, there were a number of areas where the company began to make improvement efforts, including supply chain and manufacturing, as well as ordering systems. The resulting service interruptions, combined with some level of anxiety about the new company ownership, likely caused further declines in satisfaction and a spread to additional attribute areas. Improved manufacturing and supply chain/logistical operations, as well as skills focused on restoring customer confidence, will be essential and will likely take some time before TBR begins to observe a turnaround in MPC/Gateway’s performance in the study.





Dell continues to hold the record for number of wins, yet new winners have entered the mix in the past year

• Dell held the No. 1 position firmly from its emergence in 2Q98 through 2Q06, not to be repeated until 2Q08.

• Among Dell’s No. 1 positions for a record 34 reporting periods, 28 were sole No. 1 rankings.

• In a total of six of those reporting periods, Dell shared the position with Lenovo (formerly IBM).

• Half of Lenovo’s wins were pre-2Q98.

Historical Record

The roster for the past 10 reporting periods stands as follows:

• Dell: three wins, including the current reporting period

• Lenovo: four wins, including the past two reporting periods

• HP: three wins, staggered

• MPC/Gateway: five wins, steadily between 4Q06 and 4Q07

CORPORATE NOTEBOOK

VENDOR RANKING POSITION WINS

(Based on 46-reporting-period history, 1Q97 through 2Q08)

34

4

28

6 13 5

05

101520253035

Dell A

ny #1

Dell S

ole #

1Dell

Sha

red #

1

HP #1

Leno

vo #1

MPC/G

atew

ay #1

SOURCE: TBR.

TBR





All competitors present with a mixture of successes and challenges over the years

Historical Record





Among the more recent reporting periods, competition has intensified

Historical Record

Dell competitive strengths were diminished until the 2Q08 resurgence.

Lenovo’s competitive strengths emerged while weaknesses diminished.

Toshiba weaknesses thinned out, then abruptly reemerged.

A new competitor, HP, emerged with key competitive strengths.

MPC/Gateway establishes a string of customer service competitive advantages, yet most recently suffers a setback as strengths diminish, some transforming into weaknesses.

Dell encountered challenges during 2007.

A first‐time, yet fleeting, competitive strength for Toshiba in 1Q08.





2Q08 In-depth Analysis





Understanding the 2Q08 Ranking PositionsIn the following section, TBR details performance differences between select pairs of competitors. For this analysis, we compare the players whose positions have shifted most significantly between

1Q08 and 2Q08.

Understanding the 2Q08 Ranking Positions





Dell creates three new performance advantages over HPTechnical support is where the differences lie between Dell’s and HP’s performances in 2Q08

• Dell’s WSI position advanced by 2.3% from 1Q08 to 2Q08, while HP’s stood still, allowing Dell to move up to a No. 1 ranking position while HP remained at No. 2.

• It was essentially across the areas of technical support that Dell gained a new set of advantages over HP in 2Q08; across the remaining categories, these two players remained well-matched.


• Dell’s parts availability satisfaction position advanced by a sizeable (>4%) margin from 1Q08 to 2Q08, while HP’s remained constant. This created a statistically significant performance advantage for Dell over HP.

• Dell’s repair time rating also advanced significantly in 2Q08 (+3.7%) while HP’s gently declined (-1.4%) enough to drive a significant performance gap between them.

• In the area of phone support, the mean satisfaction positions of Dell and HP moved in opposite directions by about 2%, providing Dell with a lower-confidence competitive win.

DELL TO HP MEAN RATING DISTANCES, 2Q08 VS. 1Q08

(NEGATIVE NUMBERS SHOW HP ADVANTAGE; POSITIVES DELL ADVANTAGE)

-8.0%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

Del

iver

yTi

me/

Ava

ilabi

lity

Pho

ne S

uppo

rt

Rep

lace

men

tP

arts

Ava

ilabi

lity

Tim

e to

Rep

air

Ove

rall

Har

dwar

eQ

ualit

y/R

elia

bilit

y

Ove

rall

Val

ue

Eas

e of

Doi

ngB

usin

ess

Pro

duct

Des

ign

Ove

rall

Sat

isfa

ctio

n

1Q08 Dell to HP Distance 2Q08 Dell to HP Distance

Dell Advantage

HPAdvantage

TBR

SOURCE: TBR.





Dell and Lenovo now share the No. 1 ranking spot, yet their performances are not evenly matched

Dell and Lenovo exhibit their own distinctive strengths in divergent areas• The WSI position of Dell advanced by a more significant margin (+2.3%) than that of Lenovo (+1.3%).• Consequently, Dell gained one ranking position (up from No. 2 to No. 1), while Lenovo held its No. 1 ranking position, now shared in

2Q08.• Dell outperformed Lenovo in the supply chain/logistical areas, while Lenovo continued to outperform Dell relative to customer perceptions

of product quality and design.

• Dell’s mean parts availability rating surged by greater than 4% from 1Q08 to 2Q08 while Lenovo’s position remained constant, driving a substantial performance gap between them.

• Dell’s delivery time satisfaction rating surged (up >5%) from 1Q08 to 2Q08. While Lenovo’s position also improved significantly, it was by a narrower margin (2.5%), providing Dell with a small, yet unsubstantiated via statistical significance testing, advantage.

• Lenovo’s hardware reliability rating advanced by nearly 2% in the past two reporting periods, creating a high-confidence performance gap between its mean position and that of Dell.


DELL TO LENOVO MEAN RATING DISTANCES, 2Q08 VS. 1Q08

(NEGATIVE NUMBERS SHOW LENOVO ADVANTAGE; POSITIVES DELL ADVANTAGE)

-5.0%-4.0%-3.0%-2.0%-1.0%0.0%1.0%2.0%3.0%4.0%5.0%

Del

iver

yTi

me/

Ava

ilabi

lity

Pho

ne S

uppo

rt

Rep

lace

men

tP

arts

Ava

ilabi

lity

Tim

e to

Rep

air

Ove

rall

Har

dwar

eQ

ualit

y/R

elia

bilit

y

Ove

rall

Val

ue

Eas

e of

Doi

ngB

usin

ess

Pro

duct

Des

ign

Ove

rall

Sat

isfa

ctio

n

1Q08 Dell to Lenovo Distance 2Q08 Dell to Lenovo Distance

Dell Advantage

LenovoAdvantage

TBR

SOURCE: TBR.

The mean product design satisfaction positions of Dell and Lenovo shifted only modestly from 1Q08 to 2Q08; Lenovo continues to hold a significant advantage over Dell.





Lenovo continues to add to its arsenal of competitive advantages over HP New competitive wins added: phone support and hardware quality/reliability

• While HP’s WSI remained constant, Lenovo added another 1.3% to its score between 1Q08 and 2Q08. Nonetheless, ranking positions remained intact (Lenovo No. 1, HP No. 2).

• While Lenovo continued to outperform HP relative to parts availability and product design satisfaction, some new statistically significant wins emerged in 2Q08 from positions of relative parity in 1Q08: phone support and hardware reliability. In both of these areas, Lenovo earned competitive strength determinations in 2Q08.


• Lenovo’s phone support satisfaction rating increased by nearly 2% from 1Q08 to 2Q08, while HP’s position receded by a similar margin. Consequently, a high-confidence win was established for Lenovo.

• Lenovo’s hardware reliability rating increased by about 2%, while HP’s remained constant. This drove a high-confidence win for Lenovo over HP in this area as well.

• For both players, parts availability and product design satisfaction positions remained relatively unchanged in the past two reporting periods. Consequently, Lenovo retained its competitive advantages over HP in both of these areas.

LENOVO TO HP MEAN RATING DISTANCES, 2Q08 vs. 1Q08

(NEGATIVE NUMBERS SHOW HP ADVANTAGE; POSITIVES LENOVO ADVANTAGE)

-4.0%-3.0%-2.0%-1.0%0.0%1.0%2.0%3.0%4.0%5.0%6.0%7.0%

Del

iver

yTi

me/

Ava

ilabi

lity

Pho

ne S

uppo

rt

Rep

lace

men

tP

arts

Ava

ilabi

lity

Tim

e to

Rep

air

Ove

rall

Har

dwar

eQ

ualit

y/R

elia

bilit

y

Ove

rall

Val

ue

Eas

e of

Doi

ngB

usin

ess

Pro

duct

Des

ign

Ove

rall

Sat

isfa

ctio

n

1Q08 Lenovo to HP Distance 2Q08 Lenovo to HP Distance

Lenovo Advantage

HPAdvantage

SOURCE: TBR.

TBR





The 2Q08 satisfaction positions of MPC/Gateway fall significantly behind Lenovo Just two exceptions: phone support and notebook value, where performance differences were not significant

• Lenovo’s WSI advanced by 1.3% from 1Q08 to 2Q08, against MPC/Gateway’s substantially receding position (-3.4%), creating significant performance differences across most areas.

• The most substantial performance gaps are now evident across the areas of parts availability, repair time and hardware quality/reliability.


• In each of the cases where Lenovo gained stronger advantages over MPC/Gateway, the latter player’s scores declined substantially from 1Q08 to 2Q08 against rising or stable positions of Lenovo.

• Within the two exception areas (phone support and notebook value), the positions of MPC/Gateway and Lenovo also moved in opposite directions. Consequently, performance gaps did emerge, yet were of modest magnitude in contrast to the remaining comparisons.

LENOVO TO MPC/GATEWAY MEAN RATING DISTANCES, 2Q08 vs. 1Q08(NEGATIVE NUM BERS SHOW M PC/GATEWAY ADVANTAGE; POSITIVES LENOVO ADVANTAGE)

-12.0%

-7.0%

-2.0%

3.0%

8.0%

13.0%

Del

iver

yTi

me/

Ava

ilabi

lity

Pho

ne S

uppo

rt

Rep

lace

men

tP

arts

Ava

ilabi

lity

Tim

e to

Rep

air

Ove

rall

Har

dwar

eQ

ualit

y/R

elia

bilit

y

Ove

rall

Val

ue

Eas

e of

Doi

ngB

usin

ess

Pro

duct

Des

ign

Ove

rall

Sat

isfa

ctio

n

1Q08 Lenovo to MPC/Gateway Distance 2Q08 Lenovo to MPC/Gateway Distance

Lenovo Advantage

MPC/GatewayAdvantage

SOURCE: TBR.

TBR





Dell gains additional advantages over Toshiba, particularly relative to technical support concerns

Dell’s jump to a No. 1 ranking is enhanced by parts availability and repair time positions• With Dell’s WSI position advancing by 2.3% in the last two reporting periods, against a 1.7% retreat by Toshiba, multiple

performance advantages have emerged in Dell’s favor in 2Q08.

• Among the most substantially growing Dell advantages are parts availability and repair time.

• The two competitors are now closely aligned relative to satisfaction with hardware reliability and product design.


• Dell’s parts availability satisfaction position advanced by >4% from 1Q08 to 2Q08 while that of Toshiba receded by 2.5%, hence the growing divide between their relative scores in 2Q08.

• A similar condition was evident relative to repair time performances.

• The performance gaps, previously in Toshiba’s favor, for hardware quality and product design were erased due to Toshiba’s declining positions against Dell’s largely stable ones.

TOSHIBA TO DELL MEAN RATING DISTANCES, 2Q08 VS. 1Q08

(NEGATIVE NUMBERS SHOW TOSHIBA ADVANTAGE; POSITIVES DELL ADVANTAGE)

-6.0%

-1.0%

4.0%

9.0%

14.0%

19.0%

Del

iver

yTi

me/

Ava

ilabi

lity

Pho

ne S

uppo

rt

Rep

lace

men

tP

arts

Ava

ilabi

lity

Tim

e to

Rep

air

Ove

rall

Har

dwar

eQ

ualit

y/R

elia

bilit

y

Ove

rall

Val

ue

Eas

e of

Doi

ngB

usin

ess

Pro

duct

Des

ign

Ove

rall

Sat

isfa

ctio

n

1Q08 Toshiba to Dell Distance 2Q08 Toshiba to Dell Distance

DellAdvantage

ToshibaAdvantage

SOURCE: TBR.

TBR





MPC/Gateway and Toshiba WSI trendlines for the year show an overall decline; Dell and Lenovo are most improved, while HP remains constant

• The sizeable 2.3% increase in Dell’s WSI from 1Q08 to 2Q08 helped boost its yearlong trendline well into the black, up a net 0.8%. Dell’s satisfaction positions for the second half of the year have been considerably more positive than those of the first half.

• Lenovo is not far behind, with a net gain of 0.6% for the year, also bolstered by its improving positions of the current reporting period. Like Dell, Lenovo’s positions have improved for the past two reporting periods, against relatively flat positions of the first half of the year.

• HP’s yearlong trendline has been flat; positions have moved only modestly throughout the year, more positively leaning during the first half of the year, against gently declining positions in the second half.

• Toshiba’s trendline registers a net 0.5% loss in position, where performances have been irregular – declining positions at the start and end of the year, with improving positions in between.

• MPC/Gateway completed its second reporting period of substantial losses in position, preceded by relative stability. Its yearlong trendline shows a 1.5% decline in position, making this player the most challenged in the competition.

Analysis of Shifting Current Positions

The figures in the graph to the left represent the percent change between the weighted satisfaction index positions of 2Q08 versus 1Q08, against the average change in position from one reporting period to the next for the past year.

CORPORATE NOTEBOOK WEIGHTED SATISFACTION RATINGS

PERCENTAGE CHANGE CURRENT VS.

PREVIOUS REPORTING PERIOD

(COMPARED TO AVERAGE SHIFTS OF PAST YEAR)

-1.7%

1.3%

-0.3%

-3.4%

2.3%

0.8% 0.6%0.2%

-1.5%-0.5%

-5.0%-4.0%-3.0%-2.0%-1.0%0.0%1.0%2.0%3.0%

Dell MPC/Gateway

HP Lenovo Toshiba

2Q08 Average Reporting Period ShiftSOURCE: TBR.

TBR





2Q08 is unique in the breadth of performance differences observed

Tracking the Satisfaction Indices

From 3Q06 to 1Q08, performance differences across the five players were limited. This pattern broke in 2Q08 due to a number of conditions that had been building over time:

MPC/Gateway WSI positions steadily eroded throughout this time period, its challenges accelerating into the first half of 2008.

Against MPC/Gateway’s declining performances, both Dell and Lenovo gained strength during the first half of 2008. By 2Q08, both Dell and Lenovo had achieved WSI positions that represented a complete recovery from previous challenges.

Meanwhile, HP’s positions have gently eroded over time. They have not yet exhibited the rebound effect observed for Dell and Lenovo.

Toshiba’s positions have also eroded over time, yet at a greater and more continuous pace than those of HP.

From 3Q06 to 1Q08, TBR observed performance gaps between the top‐ and bottom‐ranked players where the gap averaged 2.6%. Consider how this average (with a range from 1.9% to 3.5%) compares to the 2Q08 distance of 6.75%. The diverging performances are accelerating into the preliminary 3Q08 reporting period, where a 10% distance separates the top and bottom performers.

CORPORATE NOTEBOOK WEIGHTED SATISFACTION

SCORES 3Q06 THROUGH 2Q08

76

78

80

82

84

86

3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08


SOURCE: TBR.

TBR





Polynomial distributions show continuing weakening of MPC/Gateway and Toshiba positions against recovering Dell and Lenovo positions


• The polynomial distribution trendline for MPC/Gateway shows a precipitous, unrelenting decline over time.

• Toshiba’s WSI trendline also registered an overall decline of considerable magnitude, yet not of the same caliber as that experienced by MPC/Gateway.

• HP’s trendline has shown steady decline, yet of significantly modest proportions compared to MPC/Gateway and Toshiba. HP’s performances have been largely solid and represent a reasonable foundation from which to mount a recovery effort against the vastly improving performances of Dell and Lenovo.

• Dell and Lenovo trendlines both exhibit steadily declining positions throughout 2007, followed by recovery into the first half of 2008.

CORPORATE NOTEBOOK WEIGHTED SATISFACTION

SCORES 3Q06 THROUGH 2Q08

84

86

76

78

80

82

3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08Poly. (Dell) Poly. (Lenovo)Poly. (HP) Poly. (Toshiba)Poly. (MPC/ Gateway)

SOURCE: TBR.

TBR





Weighted satisfaction indices display much less performance differentiation during 2006 and 2007 than in either the past or present (2Q08)

Dell’s weighted satisfaction index positions move in waves. Its positions are currently in the midst of a third historical improvement cycle.

HP’s positions also move in waves. Its WSI is now in a correction phase following an extended period of declining satisfaction.

Lenovo’s positions have improved over a greater timeframe, yet the overall trend has been choppy. Lenovo is currently in a strong improvement cycle.

Toshiba’s positions show strong improvement beginning in early 2005 that appear to have topped out during late 2006. Its subsequent positions have been declining steadily.

Since TBR began coverage, MPC/Gateway’s entire trendline had essentially been one of improvement until the current, more challenging period. Its most recent position reached a point significantly lower than its start.The above graph illustrates the cycles through which the industry moves as competitors

grapple, with varying levels of success, with the evolving needs of their customer bases in a highly dynamic market sector. An overall decline in corporate notebook satisfaction affected all players in 2007. Today, some are rebounding more quickly than others from the challenges created by a greater dependence on mobility.


CORPORATE NOTEBOOK LONG-TERM WEIGHTED SATISFACTION SCORES

1Q03 THROUGH 2Q08

75

77

79

81

83

85

87

1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08


SOURCE: TBR.

TBR






MOVING AVERAGES, 1Q03 THROUGH 2Q08

75

77

79

81

83

85

87

1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08

2 per. Mov. Avg. (Dell) 2 per. Mov. Avg. (Lenovo) 2 per. Mov. Avg. (HP)2 per. Mov. Avg. (Toshiba) 2 per. Mov. Avg. (MPC/ Gateway)

SOURCE: TBR.

TBR

The long-term view shows the convergence of WSI positions followed by what may or may not be a new era of perceived performance differentiation (2Q08)


The 2Q08 study results form a unique pattern, starkly offset by the smaller number of performance differences observed from late 2006 through 2007.

Is this the beginning of a new era of greater performance differentiation? Clearly, most of the divergences are due to MPC/Gateway and Toshiba performances. The three top players remain relatively close in overall placement. Yet, opportunities and threats are clearly laid out in front of each of them.


MOVING AVERAGES, 2Q06 THROUGH 2Q08

75

77

79

81

83

85

87

1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08

2 per. Mov. Avg. (Dell) 2 per. Mov. Avg. (Lenovo) 2 per. Mov. Avg. (HP)2 per. Mov. Avg. (Toshiba) 2 per. Mov. Avg. (MPC/ Gateway)

SOURCE: TBR.

TBR

AREA OF DETAIL





Hardware Reliability/QualityHardware reliability requirements are the stiffest where most systems manufacturers barely make the grade

Reliability gaps tend to run widest due to extremely high expectations. Due to such high requirements, TBR sets the acceptable GAP range at –12% or above.Lenovo has clearly been the most consistent at just meeting the very high expectations of its customers. HP has achieved positions around the acceptable GAP range since 3Q06.Dell’s positions have been variable, with a period of steadily improving positions for the past five reporting periods, ending with GAP positions well within the acceptable range and on par with those of Lenovo, HP and Toshiba.Both Toshiba and MPC/Gateway’s positions improved substantially during 2006, taking them both out of outlying positions. Toshiba’s GAP positions have subsequently retained those improvements.The GAP positions of MPC/Gateway held their improvements until the past two reporting periods. GAP positions have increased substantially during the first half of 2008, returning MPC/Gateway to the status of an outlier.

GAP Analyses: Tracking Expectation Fulfillment

Due to the critical nature of hardware reliability in notebook products, TBR allows for a wider “comfort zone” than we do for the other satisfaction attributes. Any GAP rating above –12% is considered acceptable.

Most consistent performer: Lenovo

Most improved performer: Toshiba

HARDWARE RELIABILITY ANALYSIS

AVERAGES 2Q05 THROUGH 2Q08

-25%

-20%

-15%

-10%

-5%

0%

2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08

Dell HP Lenovo Toshiba MPC/Gateway

TBR

SOURCE: TBR.





Hardware Reliability/QualityIn spite of increasingly high expectations, most business notebook customers note long-term improvement

MAJOR INFLUENCES:Satisfaction with notebook quality/reliability is highly correlated with perceptions of both product design and value.

In today’s marketplace, customer perceptions are influenced by increased mobility and thinner, lighter designs; vendors have been increasing their focus on quality improvements and testing, including a focus on vastly improving durability. Customers are not willing to trade reliability or durability for mobility.

Today, technology innovations include Intel’s Montevina, offering improved performance, energy efficiency and manageability, and innovations in storage (hybrid, flash-augmented and solid state flash) for improved reliability.

Lenovo has clearly been the most consistent performer over the long term. Note the recent uptick in satisfaction, setting a new standard for the competition.

HP’s mean satisfaction positions have occasionally challenged those of historical leader Lenovo.

Dell was performing well-below the levels set by HP and Lenovo for some time until we began to observe some momentum. Satisfaction positions have steadily increased in the past three reporting periods, where Dell is now on par with HP and Toshiba.

Toshiba’s positions have improved significantly over the long term, particularly boosted by its 4Q07 performance, where it achieved parity with previous industry leaders. Note the abrupt dip in its satisfaction position in 2Q08.

MPC/Gateway’s positions were the most improved until 4Q07, at which point positions plummeted, erasing all progress.


HISTORICAL ANALYSIS OF HARDWARE RELIABILITY SATISFACTION

5.20

5.30

5.40

5.50

5.60

5.70

5.80

5.90

6.00

6.10

6.20

3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08

Dell HP Lenovo MPC/Gateway Toshiba

SOURCE: TBR.

TBR

Note: This graph represents the pure mean satisfaction positions for hardware reliability.





Product DesignWhile customer expectations for design tend to be understated, differences in satisfaction perception are common

Note: This graph represents the pure mean satisfaction positions for product design.

Lenovo has frequently outperformed the competition. By recovering its position in 4Q07, the company regained its competitive strength status, carried through into 1Q08 and 2Q08.

Toshiba has been a strong competitor during the past year, yet lacks the consistency of Lenovo. Toshiba earned a competitive strength in 1Q08 that was not held into 2Q08.

Dell has historically been more challenged in creating a strong impression of product design innovation and was cited with five straight competitive warnings (from 4Q06 to 4Q07). Subsequently, there has been a significant improvement, allowing Dell to recover from its warning status in both 1Q08 and 2Q08.

HP’s positions improved during late 2005 and early 2006, followed by a long period of stability. Positions subsequently declined during the first half of 2008.

MPC/Gateway’s satisfaction positions improved significantly during late 2006, followed by a number of setbacks (the most recent of which has been of significant magnitude). Its 2Q08 satisfaction position represents a return to its historical low point of 2Q06.

Because of the understated status of product design, TBR presents the pure mean satisfaction positions only.

Satisfaction with notebook product design is highly correlated with the high-importance attributes of: 1) hardware quality/reliability; and 2) notebook value. Consequently, product design becomes relevant through association.

Recent design efforts by systems manufacturers include updated and broadened wireless connectivity options, extended battery life, security and manageability features, ease of use and deployment features, enhanced reliability/durability features and improved energy efficiency.


HISTORICAL ANALYSIS OF PRODUCT DESIGN SATISFACTION

5.20

5.30

5.40

5.50

5.60

5.70

5.80

5.90

6.00

6.10

3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08


SOURCE: TBR.

TBR





Notebook ValueIt is a rarity for any player to consistently meet customer expectations for notebook value

Dell’s once-substantial lead has steadily diminished since late 2006.

HP’s positions have been irregular, occasionally approaching the acceptable GAP range.

Lenovo has generally struggled to keep pace with customer expectations.

MPC/Gateway’s positions have been the most irregular. While acceptable GAP ratings were achieved during 3Q07 and 4Q07, subsequent positions have drifted far from the goal.

Toshiba has vastly improved its performance, and has been exempt from competitive warnings for the past five reporting periods.


MAJOR INFLUENCES:TBR’s correlation analyses reveal two factors that strongly contribute to perceptions of notebook value today: hardware reliability and product design.

These three elements (reliability, design and value) are intertwined in the minds of customers, reinforcing the new focus in our study on product characteristics (hardware integrity, durability, design elements and features).

Acceptable GAP range

VALUE ANALYSIS


-16%

-14%

-12%

-10%

-8%

-6%

-4%

-2%

0%

2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08


SOURCE: TBR.

TBR





This graph represents the pure mean satisfaction ratings for notebook value, unlike the GAP positions represented in the previous slide.

Notebook ValuePure satisfaction ratings show continued volleying for position

Dell’s satisfaction positions for notebook value have tended to move in cycles, with a few competitive wins along the way. Following its 1Q06 and 2Q06 competitive strength wins, the competition tightened where Dell did not repeat the distinction until the current reporting period.

On the other end of the spectrum, Toshiba was cited with competitive weaknesses or warnings steadily throughout the four reporting periods of 2006. This was followed up by enough of an improvement, and one that was sustained, to keep Toshiba in neutral territory thereafter.

Today, the competition is being dominated by Dell, HP and Lenovo, the latter of which has improved significantly for the past two reporting periods.


HISTORICAL ANALYSIS OF NOTEBOOK VALUE SATISFACTION

5.20

5.30

5.40

5.50

5.60

5.70

5.80

5.90

6.00

3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08


SOURCE: TBR.

TBR





Notebook SupportDell, HP and Lenovo remain the most consistent in expectation fulfillment;

Toshiba’s past success begins to show increasing vulnerability

Once a conspicuous marketplace laggard, Toshiba intentionally rectified its competitive positioning relative to meeting customers’ expectations for notebook support through to 2Q07.

Subsequent to this, however, Toshiba’s GAP positions have returned to the red portion of the graph and remained in a state of pressure for the past four reporting periods.

Dell, HP and Lenovo have all brought in performances safely and consistently within the acceptable GAP range since late 2005.

MPC/Gateway was matching the performances of the above until the first half of 2008, when its GAP positions dropped substantially.



SUPPORT ANALYSIS


-14%

-12%

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08


TBR

SOURCE: TBR.

As would be expected, perceptions of phone support, repair time, and parts availability are all strongly correlated with one another. They are also linked with how customers perceive the relationship with their systems manufacturer.





Notebook SupportPerformances had converged over time,

until the present where differences returned


Until late 2007, wide variations in satisfaction were exhibited for perceived quality of notebook support.

Positions began to converge in late 2007, driven by improving Toshiba positions and declining MPC/Gateway placement.

Performance differences increased in 2008, driven by improving Lenovo and Dell positions while Toshiba and MPC/Gateway positions continue to decline.

Note that Toshiba’s period of recovery ended sometime around late 2006 to early 2007. Subsequently, repeated challenges have presented themselves, particularly with respect to repair time satisfaction.

MPC/Gateway’s positions begin to drop in late 2007 and continued into the current period.

Dell’s phone support ratings positions have been more of a challenge than those relating to repair time. Dell regained its competitive strength for repair time in 2Q08 (its first since 1Q06).

HP’s positions for both support categories have been declining steadily since early 2007.

Lenovo’s satisfaction positions are now recovering from some recent challenges. In 2Q08, Lenovo earned competitive strengths in both categories, its first since 3Q05.

HISTORICAL ANALYSIS OF PHONE SUPPORT SATISFACTION

4.80

5.00

5.20

5.40

5.60

5.80

6.00

3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08


SOURCE: TBR.

TBR

HISTORICAL ANALYSIS OF REPAIR TIME SATISFACTION

4.80

5.00

5.20

5.40

5.60

5.80

6.00

6.20

3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08


SOURCE: TBR.

TBR





Notebook Delivery/AvailabilityDell and HP have been most successful in meeting customer expectations

Note that most GAP performances relative to delivery time have been erratic, influenced by new product introductions and backlogs as well as the availability of various components.

Dell’s leadership position has not always been assured, particularly following an extended period during which GAP positions steadily widened. In 2Q08, Dell regained its first competitive strength since 1Q06.

HP’s successes have been erratic, though competitive strengths were established from 3Q07 to 1Q08.

Lenovo’s GAP positions have generally resided outside of the acceptable GAP range, though its 2Q08 position showed a substantial improvement.

Toshiba has not been as successful in meeting expectations as in pre-2006 but generally makes the grade.

MPC/Gateway’s GAP positions were generally strong until the current reporting period.



PRODUCT DELIVERY/AVAILABILITY ANALYSIS


-12.0%

-10.0%

-8.0%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08


TBR

SOURCE: TBR.

Perceptions of delivery time/product availability are correlated with parts availability satisfaction (both aspects of supply chain effectiveness),

as well as with relationships with systems manufacturers.





Notebook Delivery/AvailabilitySatisfaction positions rebounded in 2008 due to easing supply constraints

HP’s satisfaction positions have been more consistent than those of competitors. HP was arguably alone in its immunity to recent supply constraint issues. Note that HP was unable to continue its run of three competitive strengths (3Q07 to 1Q08) into 2Q08 as it was overshadowed by Dell’s performance.

Dell’s positions declined steadily from late 2006 to the end of 2007, followed by a substantial rebound, representing full recovery by 2Q08 and a returning competitive strength.

Lenovo’s GAP positions have typically run lower than those of industry averages, an historical challenge dating back to the IBM PC Company. GAP positions have improved by significant margins during the past two reporting periods, however.

Toshiba basically recovered from an extended period of declining satisfaction positions by 1Q08, yet the long term pattern does show an overall decline.

Satisfaction positions for MPC/Gateway have exhibited a long and steady state of decline, accelerated in 2Q08 and resulting in a competitive weakness determination.


This graph represents the pure mean satisfaction ratings for notebook value, unlike the GAP positions represented in the previous slide.

HISTORICAL ANALYSIS OF DELIVERY TIME SATISFACTION

5.20

5.30

5.40

5.50

5.60

5.70

5.80

5.90

6.00

3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08


SOURCE: TBR.

TBR





Notebook Delivery/AvailabilityPast component shortages were affecting satisfaction levels; most systems manufacturers have recovered


TBR sees the struggles of Toshiba and MPC/Gateway as going beyond the recent components shortages. Toshiba has historically experienced issues with parts availability and this experience often colors customers’ratings for delivery time. For MPC/Gateway, we are observing a systemic decline in satisfaction that has affected every category, this being more of a response to changes in company ownership (note: TBR has seen this in the past, e.g., HP/Compaq merger).

Vendor % Change in Delivery Time Satisfaction, Past 3 Calendar Quarters

Dell +11%MPC/Gateway -6.5%HP +1%Lenovo +5%Toshiba -1%

The calendar quarter trendlines for delivery time satisfaction clearly display the challenges faced in the industry. Only HP was able to weather the storm effectively, though even here there were signs of a more modest struggle.

Dell and Lenovo have both effectively recovered from recent challenges, with Dell actually reclaiming its competitive strength status in 2Q08 and displacing HP after holding the distinction for the previous three reporting periods. Note the cumulative momentum of Dell and Lenovo’s mean satisfaction positions for the past three calendar quarters.

DELIVERY TIME SATISFACTION - PAST NINE CALENDAR QUARTERS

5.25.35.45.55.65.75.85.96.06.1

Apr-Jun06

Jul-Sep06

Oct-Dec06

Jan-Mar07

Apr-Jun07

Jul-Sep07

Oct -Dec07

Jan-Mar08

Apr-Jun08


TBR





REPLACEMENT PARTS DELIVERY/AVAILABILITY


-25%

-20%

-15%

-10%

-5%

0%

2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08


TBR

SOURCE: TBR.

Replacement Parts AvailabilityParts availability concerns of 1H07 appear to be correcting for Dell and Lenovo


Note the sudden onset of widening GAP positions for all players in 1H07, undoubtedly the result of an industrywide component shortage.


Dell recovered from GAP positions that extended as wide as -20% in 2Q07, marking the greatest-magnitude improvement of the competitors.

Lenovo’s positions moved back to the acceptable GAP range by 2Q08.

HP’s GAP ratings were only modestly affected back in mid-2007. Current positions remain close to the acceptable GAP range.

Toshiba’s GAP positions improved over the long term, reaching its first acceptable position in 4Q07 only to have dipped back into an outlying position by 2Q08.

MPC/Gateway GAP positions staged a remarkable recovery from mid-2005 to late-2006, sustained until the current trend toward substantially widening GAP positions.





Replacement Parts AvailabilitySignificant events affecting components supplies influenced ratings positions in 1H07;

a subsequent turnaround has taken effect for most systems manufacturers


Industrywide supply concerns emerge in early 2007

An analysis of satisfaction positions by calendar quarter suggests that customers were experiencing (or recollecting) supply constraints during 1Q07, specifically. By 2Q07, things began to improve and have either continued to improve or stabilized thereafter.During the first quarter of 2008, however, two systems manufacturers were continuing to struggle with supply constraints: Toshiba and MPC/Gateway. It would appear that the largest market share manufacturers (within these markets, e.g., midmarket and large enterprise) are faring better in negotiating components supplies, particularly batteries.

Industrywide supply constraints that may have emerged in 2007 to explain abrupt dips in customer satisfaction:

Battery supply shortages were extended through 2007 for most players.

First to recover: Dell, Lenovo, and HP

Still waiting for recovery: Toshiba

In the midst of heightened competitive challenges: MPC/Gateway

REPLACEMENT PARTS AVAILABILITY SATISFACTION -

PAST 10 CALENDAR QUARTERS

5.0

5.2

5.4

5.6

5.8

6.0

6.2

Jan-Mar 06 Apr-Jun 06 Jul-Sep 06 Oct-Dec06

Jan-Mar 07 Apr-Jun 07 Jul-Sep 07 Oct -Dec07

Jan-Mar 08 Apr-Jun 08


SOURCE: TBR.

TBR

Dell, Lenovo and HP recovered in 2008

HISTORICAL ANALYSIS OF PARTS AVAILABILITY SATISFACTION

5.10

5.20

5.30

5.40

5.50

5.60

5.70

5.80

5.90

6.00

6.10

3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08


SOURCE: TBR.

TBR





Ease of Doing BusinessRelationship issues remain indirectly powerful; most vendors are effectively meeting expectations

Dell’s GAP positions have strayed from exceeding to meeting expectations over time, a reasonable trendline in that over-serving customers can be seen as overkill.

HP’s positions improved in late 2006 and have subsequently been sustained right at the meeting-expectation mark.

Lenovo has consistently achieved GAP ratings just within the acceptable range.

Toshiba began in unacceptable territory, followed by substantial improvement that was basically held until the current reporting period. Toshiba’s 2Q08 position dropped out of the acceptable GAP range.

MPC/Gateway’s progress toward reaching and achieving 0% GAP positions fell apart in 2008.


Satisfaction with ease of doing business is highly correlated with how customers perceive supply chain efficiencies (delivery time, parts availability) and technical support.

HP’s competitive strength for 2Q08 is likely associated with supply chain operations, as HP’s phone support ratings have been among its least successful performances. Lenovo also earned a competitive strength, in this case likely associated with its two additional competitive strengths for repair time and phone support. The association is also evident with Dell, earning a competitive strength alongside HP and Lenovo in 2Q08.

Toshiba gained a new competitive warning, clearly associated with both parts availability and technical support challenges.

The competitive weakness assigned to MPC/Gateway likely holds the key to its significantly compromised positions across the measured attributes. Ease of doing business perceptions are a direct line to how customers feel about the acquisition and this, in turn, affects everything else.


EASE OF DOING BUSINESS


-12%

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08


TBR

SOURCE: TBR.





Ease of Doing BusinessRelationship issues remain indirectly powerful; most vendors are effectively meeting expectations

Dell’s positions were on a declining course from late 2006 to late 2007, after which they fully recovered.

HP’s long-term trendline shows steady improvement. HP has earned competitive strengths for the past two reporting periods.

Lenovo’s positions have improved only recently, enough to ensure its first ease of doing business competitive strength.

Toshiba’s positions have been on a steadily declining course since late 2006.

MPC/Gateway positions began declining long before we observed the cumulative downturn (1Q08, 2Q08) for the remaining attributes that was clearly influenced by the acquisition of Gateway Professional by MPC. TBR sees declining ease of doing business ratings as the first indicator of what was to follow – the collective collapse of positions. Yet, the fact that ease of doing business satisfaction was already in decline before news of the acquisition suggests customers were already observing changes at Gateway.


This graph represents the pure mean satisfaction ratings for notebook ease of doing business, unlike the GAP positions represented in the previous slide.

HISTORICAL ANALYSIS OF EASE OF DOING BUSINESS SATISFACTION

5.20

5.30

5.40

5.50

5.60

5.70

5.80

5.90

6.00

6.10

6.20

3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08


SOURCE: TBR.

TBR





Analysis of the Past Four Reporting PeriodsFor the most part, Dell’s satisfaction positions are now at their highest levels of the year,

driving home its return to No. 1 ranking statusDell’s WSI position increased 2.3% from 1Q08 to 2Q08, driven by substantial increases in the delivery time, parts availability and repair time metrics; this follows the 1.1% increase in its WSI positions between the two previous reporting periods.

Current positions are now at or above their high points of the year across all but phone support and product design. Here, Dell has not made the necessary progress to achieve comparable positions to competitors, mainly Lenovo.

Due to 1H08 performances, Dell gained three new competitive strengths in 2Q08: delivery time, repair time and notebook value.

Two areas exhibit substantial progress throughout the year: parts availability and repair time, no doubt relating to easing of supply constraints and Dell’s ability to weather the difficult times effectively.

Trends of the Reporting Period

Dell has made remarkable progress this past year, essentially during the first half of 2008. Of particular note are Dell’s parts availability, repair time and delivery time

ratings in 2Q08. These are all related concerns, pertaining to components availability and Dell’s ability to meet customer expectations far more effectively than during the second half of 2007. Two areas show additional need for improvement – product

design and phone support, both areas where Lenovo outperforms Dell.

DELL NOTEBOOK CUSTOMER SATISFACTION TREND ANALYSIS

3Q07 TO 2Q08

5.1

5.3

5.5

5.7

5.9

6.1

6.3

Del

iver

y/A

vaila

bilit

y

Pho

ne S

uppo

rt

Rep

lace

men

tP

arts

Ava

ilabi

lity

Tim

e to

Rep

air

Har

dwar

e Q

ualit

y

Val

ue

Ove

rall

Eas

e of

Doi

ng B

usin

ess

Pro

duct

Des

ign/

Spe

cial

Feat

ures

Ove

rall

Sat

isfa

ctio

n

3Q07 4Q07 1Q08 2Q08SOURCE: TBR.

TBR





Analysis of the Past Four Reporting PeriodsHP positions have exhibited little variability this past year, with the exception of

some challenges relative to technical support

HP’s weighted satisfaction index remained constant from 1Q08 to 2Q08, with most individual positions also remaining stable. There were two exceptions: phone support and repair time, where satisfaction positions declined 2% and 1.4%, respectively.

Throughout this past year, there has been little variability in satisfaction positions, with the exception of phone support, which is now at its low point for the year.

Modest progress has been established this year relative to satisfaction with notebook value and ease of doing business.


In contrast to the surging positions of Dell and Lenovo, HP’s satisfaction positions have been tempered. HP has retained its competitive strength status for three consecutive reporting periods relative to ease of doing business. Areas where TBR sees the greatest need for some momentum include phone support, repair time, and product design, all

areas where Lenovo outperformed industry averages in 2Q08.

HP NOTEBOOK CUSTOMER SATISFACTION TREND ANALYSIS

3Q07 TO 2Q08

5.1

5.3

5.5

5.7

5.9

6.1

6.3

Del

iver

y/A

vaila

bilit

y

Pho

ne S

uppo

rt

Rep

lace

men

tP

arts

Ava

ilabi

lity

Tim

e to

Rep

air

Har

dwar

e Q

ualit

y

Val

ue

Ove

rall

Eas

e of

Doi

ng B

usin

ess

Pro

duct

Des

ign/

Spe

cial

Feat

ures

Ove

rall

Sat

isfa

ctio

n

3Q07 4Q07 1Q08 2Q08

SOURCE: TBR.

TBR





Analysis of the Past Four Reporting PeriodsLenovo holds its No. 1 ranking status by establishing several new competitive strengths

The 1.3% rise in Lenovo’s WSI positions from 1Q08 to 2Q08 was driven by significantly improving positions across a number of areas – hardware reliability, notebook value, delivery time, ease of doing business and phone support.

Current positions are at or above their high points of the year across every category; the most noteworthy progress has been established across the areas of delivery time, parts availability, notebook value and ease of doing business.

New high points were established in 2Q08 across each of these areas (identified above) along with phone support, repair time and hardware reliability.


Lenovo’s progress this past year has been impressive, particularly during the 2Q08 reporting period, when new competitive strengths were established across the areas of

hardware reliability, phone support, repair time and ease of doing business. Nonetheless, Lenovo continues to trail Dell across the areas of delivery time and notebook value.

LENOVO NOTEBOOK CUSTOMER SATISFACTION TREND ANALYSIS

3Q07 TO 2Q08

5.1

5.3

5.5

5.7

5.9

6.1

6.3

Del

iver

y/A

vaila

bilit

y

Pho

ne S

uppo

rt

Rep

lace

men

tP

arts

Ava

ilabi

lity

Tim

e to

Rep

air

Har

dwar

e Q

ualit

y

Val

ue

Ove

rall

Eas

e of

Doi

ng B

usin

ess

Pro

duct

Des

ign/

Spe

cial

Feat

ures

Ove

rall

Sat

isfa

ctio

n

3Q07 4Q07 1Q08 2Q08

SOURCE: TBR.

TBR





Analysis of the Past Four Reporting PeriodsFor Toshiba, technical support and supply chain challenges remain

Toshiba’s WSI rating declined 1.7% from 1Q08 to 2Q08. All positions receded, led by hardware reliability, parts availability and repair time metrics.

Consequently, current positions are at or below their low points of the year across all but the delivery time metric.

Weaknesses in 2Q08 led to new competitive warnings for repair time and ease of doing business, as well as a full weakness (from a previous warning) for parts availability.

Toshiba lost possession of its previous competitive strength for product design.


Toshiba needs to revisit its technical support and supply chain/logistical mechanisms, as both areas are exhibiting recent weakness.

TOSHIBA NOTEBOOK CUSTOMER SATISFACTION TREND ANALYSIS

3Q07 TO 2Q08

5.1

5.3

5.5

5.7

5.9

6.1

6.3

Del

iver

y/A

vaila

bilit

y

Pho

ne S

uppo

rt

Rep

lace

men

tP

arts

Ava

ilabi

lity

Tim

e to

Rep

air

Har

dwar

e Q

ualit

y

Val

ue

Ove

rall

Eas

e of

Doi

ng B

usin

ess

Pro

duct

Des

ign/

Spe

cial

Feat

ures

Ove

rall

Sat

isfa

ctio

n

3Q07 4Q07 1Q08 2Q08SOURCE: TBR.

TBR





Analysis of the Past Four Reporting PeriodsMPC/Gateway’s position declines of late accelerate over time

The 3.4% decline in MPC/Gateway’s WSI positions from 1Q08 to 2Q08 was driven collectively, and massively, by receding positions across every area.

This came on top of the 2.3% decline in its WSI positions between the two previous reporting periods. Note the extremely wide recession of positions throughout this past year, setting new low points across the board by 2Q08.

Consequently, new competitive weaknesses were issued in 2Q08 across four areas: delivery time, parts availability, repair time and ease of doing business.


MPC/Gateway is continuing to feel the effects of increasing competitive pressures and industrywide supply constraints, and it represents the group most in need of improving customer confidence in the areas of technical support and logistical/supply chain. The

company’s hardware quality/reliability satisfaction position also declined precipitously in 1H08, strongly influencing MPC/Gateway’s drop to a No. 4 ranking position.

MPC/GATEWAY NOTEBOOK CUSTOMER SATISFACTION TREND ANALYSIS

3Q07 TO 2Q08

5.1

5.3

5.5

5.7

5.9

6.1

6.3

Del

iver

y/A

vaila

bilit

y

Pho

ne S

uppo

rt

Rep

lace

men

tP

arts

Ava

ilabi

lity

Tim

e to

Rep

air

Har

dwar

e Q

ualit

y

Val

ue

Ove

rall

Eas

e of

Doi

ng B

usin

ess

Pro

duct

Des

ign/

Spe

cial

Feat

ures

Ove

rall

Sat

isfa

ctio

n

3Q07 4Q07 1Q08 2Q08

SOURCE: TBR.

TBR





Dell Improvements GAP Analysis points to phone support

Primary Area Requiring Improvement Efforts: Phone support

Secondary Areas Requiring Improvement Efforts: None

Areas of Competency: Parts availability

Standard GAP Analysis Comparisons: Dell’s phone support GAP position in the standard analysis was actually among the best: +0.5%, exceeded only by Lenovo’s +0.7%. Yet the Improvements GAP Analysis continues to point to this metric as requiring further improvement efforts simply by virtue of the fact customers rate this metric lower than all others. The only other area with a GAP rating outside the acceptable range was notebook value, where Dell earned a -7% rating in spite of its renewed competitive strength status in2Q08. Competitors’ GAP ratings (except for HP, at -6%) were considerably wider.

Improvements GAP Analyses

Note that Dell’s hardware reliability GAP rating in the Improvements GAP Analysis is only average, while those of Lenovo, HP and Toshiba show them as performing well above expectations.

Also note that parts availability, a concern during 2H07, has been transformed into an area where Dell is now exceeding expectations.

SUGGESTED AREAS OF IMPROVEMENT FOR DELL 2Q08

40

60

80

100

120

140

160

Del

iver

y/A

vaila

bilit

y

Pho

ne S

uppo

rt

Rep

lace

men

tP

arts

Ava

ilabi

lity

Tim

e to

Rep

air

Har

dwar

e Q

ualit

y

Val

ue

Eas

e of

Doi

ngB

usin

ess

Pro

duct

Des

ign

Feat

ures

Hold Back/Exploit

Maintain

TargetR

eco

mm

en

ded

Acti

on

s

SOURCE: TBR.

TBR





HP remains affected by recent concerns with technical support

Primary Area Requiring Improvement Efforts: Phone support, repair time

Secondary Area Requiring Improvement Efforts: None

Areas of Competency: Ease of doing business, hardware quality/reliability, product design

Standard GAP Analysis Comparisons: HP’s phone support standard GAP rating was among the best of the competitive field, yet slightly negative (-1%) in contrast to positive positions of Dell and Lenovo. HP’s mean satisfaction position trailed Lenovo in 2Q08. Its repair time GAP rating of -5.3% was just outside the acceptable range and is competitively challenged against both Dell and Lenovo, each earning competitive strength determinations in 2Q08.

Note the Improvements GAP Analysis points to hardware reliability, product design and ease of doing business, as areas where HP currently excels in meeting customers’ expectations. HP has earned a competitive strength for ease of doing business for the past three reporting periods.


SUGGESTED AREAS OF IMPROVEMENT FOR HP 2Q08

40

60

80

100

120

140

160

Del

iver

y/A

vaila

bilit

y

Pho

ne S

uppo

rt

Rep

lace

men

tP

arts

Ava

ilabi

lity

Tim

e to

Rep

air

Har

dwar

e Q

ualit

y

Val

ue

Eas

e of

Doi

ngB

usin

ess

Pro

duct

Des

ign

Feat

ures

Hold Back/Exploit

Maintain

Target

Reco

mm

en

ded

Acti

on

s

TBR

SOURCE: TBR.





Delivery time and repair time remain areas of focus for LenovoPrimary Area Requiring Improvement Efforts: Repair time

Secondary Areas Requiring Improvement Efforts: Delivery time

Areas of Competency: Hardware reliability, product design, ease of doing business

Standard GAP Analysis Comparisons: Lenovo’s standard GAP position for repair time, at -6.3% was wider than those of either HP or Dell. Nonetheless, Lenovo earned a competitive strength determination (along with Dell) for this metric. The Improvements GAP Analysis was focusing on the higher-than-average expectations of Lenovo customers. Lenovo’s delivery time GAP in the standard test was the widest (at -6.25%) next to that of MPC/Gateway. While the Improvements GAP Analysis did not point to notebook value as an area of concern, the standard test GAP of -10% was as wide as those of Toshiba and MPC/Gateway. It was driven by heightened expectations in the 2Q08 reporting period.


Lenovo was determined to have exceeded expectations in the same areas as HP –hardware reliability, product design, and ease of doing business. Unlike HP (earning just one competitive strength, for ease of doing business), Lenovo stacked up competitive strengths across all three areas.

SUGGESTED AREAS OF IMPROVEMENT FOR LENOVO 2Q08

40

60

80

100

120

140

160

Del

iver

y/A

vaila

bilit

y

Pho

ne S

uppo

rt

Rep

lace

men

tP

arts

Ava

ilabi

lity

Tim

e to

Rep

air

Har

dwar

e Q

ualit

y

Val

ue

Eas

e of

Doi

ngB

usin

ess

Pro

duct

Des

ign

Feat

ures

Hold Back/Exploit

Maintain

TargetR

eco

mm

en

ded

Acti

on

s

SOURCE: TBR.

TBR





Technical support and parts availability are identified as leading concerns for Toshiba

Primary Area Requiring Improvement Efforts: Repair time, parts availability

Secondary Areas Requiring Improvement Efforts: Phone support

Areas of Competency: Hardware quality/reliability, product design

Standard GAP Analysis Comparisons: Toshiba’s GAP rating in the standard analysis for parts availability (-12%) was substantially wider than those of Dell, HP and Lenovo (averaging -3%). A similar condition was observed relative to repair time, where Toshiba’s -11% GAP was also substantially wider than those of the leading competitors. Toshiba’s phone support GAP (-4%) was within the acceptable range, yet wider than the average 0% GAP of its competitors. The standard GAP analysis also pointed to notebook value where Toshiba’s -11% GAP was the widest of the competitive field along with MPC/Gateway.

Note the Improvements GAP Analysis points to both aspects of product integrity – reliability and design – as areas where Toshiba currently excels at meeting its customers’ expectations. Nonetheless, it was Lenovo that earned competitive strength determinations in these two areas in 2Q08.


SUGGESTED AREAS OF IMPROVEMENT FOR TOSHIBA 2Q08

40

60

80

100

120

140

160

Del

iver

y/A

vaila

bilit

y

Pho

ne S

uppo

rt

Rep

lace

men

tP

arts

Ava

ilabi

lity

Tim

e to

Rep

air

Har

dwar

e Q

ualit

y

Val

ue

Eas

e of

Doi

ngB

usin

ess

Pro

duct

Des

ign

Feat

ures

Hold Back/Exploit

Maintain

Target

Reco

mm

en

ded

Acti

on

s

SOURCE: TBR.

TBR





MPC/Gateway’s current challenges are led by supply chain and support issuesPrimary Areas Requiring Improvement Efforts: Repair time, parts availability

Secondary Areas Requiring Improvement Efforts: None

Areas of Competency: Nothing specific

Standard GAP Analysis Comparisons: MPC/Gateway’s standard GAP positions for parts availability and repair time (-19% and -17%, respectively) were substantially wider than those of its competitors, particularly Dell, HP and Lenovo (averaging -3% and -4%, respectively). These were among the widest GAP areas of the covered metrics, though MPC/Gateway’s hardware reliability GAP (-19%) was of equal compromise competitively.


MPC/Gateway no longer excels in the area of ease of doing business, a distinguishing characteristic during this company’s reign as a No. 1‐ranked notebook PC supplier in TBR’s studies.

SUGGESTED AREAS OF IMPROVEMENT FOR MPC/GATEWAY 2Q08

40

60

80

100

120

140

160

Del

iver

y/A

vaila

bilit

y

Pho

ne S

uppo

rt

Rep

lace

men

tP

arts

Ava

ilabi

lity

Tim

e to

Rep

air

Har

dwar

e Q

ualit

y

Val

ue

Ove

rall

Eas

e of

Doi

ng B

usin

ess

Pro

duct

Des

ign

Feat

ures

Hold Back/Exploit

Maintain

Target

Reco

mm

en

ded

Acti

on

s

TBR

SOURCE: TBR.





Toshiba customer loyalty ratings continue to lag

Customer loyalty ratings of Toshiba and MPC/Gateway were determined to have run significantly lower than the industry average in 2Q08. Meanwhile, Lenovo and Dell positions were significantly higher than the industry average.

The Loyalty Factor

2Q08 CORPORATE NOTEBOOK BRAND LOYALTY

3.54

3.83

4.13

3.41

4.15

2.80

3.00

3.20

3.40

3.60

3.80

4.00

4.20

4.40


SOURCE: TBR.

TBR





Customer loyalty ratings tend to show the expected favoritism toward market share leaders

The customer loyalty trendlines for Dell and Lenovo have been the most consistent over time.

HP customer loyalty spiked in 4Q06, followed by a slowdown. Subsequently, HP loyalty positions remained in the proximity of Dell’s and Lenovo’s for the following five reporting periods. In 2Q08, HP’s rating fell back.

Meanwhile, the customer loyalty positions of MPC/Gateway and Toshiba improved from early 2006 to around year’s end and have subsequently eroded considerably over time.

The Loyalty Factor

NOTEBOOK LOYALTY 2Q05 THROUGH 2Q08

3.20

3.40

3.60

3.80

4.00

4.20

4.40

2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08

Dell HP IBM Toshiba MPC/Gateway

TBR

SOURCE: TBR.





Brand Switching ActivityA renewed focus on product integrity/reliability may be contributing to brand defection decisions

The Loyalty Factor

Of responding companies, 15% reported having switched corporate notebook brands in the past 12 months.

HP and Dell were the principal benefactors of brand defections.

While pricing remains a driver of brand switching decisions, a growing tendency of customers to cite issues with hardware reliability continues. Support and availability are also factors.

DRIVERS OF BRAND SWITCHING:

Pricing/Costs (39%)

Reliability (28%)

Technical support (17%)

Availability/Delivery (17%)

Corporate mandate (16%)

CORPORATE NOTEBOOK BRAND SWITCHING - 2Q08

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

Dell MPC/Gateway

HP Lenovo Toshiba

Replaced Added

TBR

SOURCE: TBR.





Brand Switching ActivityThe Switching Index trendline shows HP most likely to have gained new account wins

The Loyalty Factor

HP has continually moved up to the “black” portion of the Switching Index graph, showing the vendor is now gaining more new accounts than it has lost. In 3Q07, we observed a sharp uptick in new account wins that has thus far been sustained.

Lenovo remained relatively stable in its ability to stay in the black until the second half of 2007, when we observed a decline in new account wins.

Dell’s Switching Index trendline has been more erratic. Dell recently experienced a decline in new account wins but is now in a process of gaining.

MPC/Gateway and Toshiba remain largely in the “red” portion of the graph.

SWITCHING INDEX = PERCENT REPLACED - PERCENT ADDED

2Q05 THROUGH 2Q08

-4.0%

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08


TBR

SOURCE: TBR.





One in three customers perceive brand differentiation

Notebook PC Differentiation

It is likely that corporate customers are beginning to open themselves up to experiences with more brands than in the past, and they are perceiving greater differences across the brands than we might have expected.

Whether the expectation and the reality are complementary, however, is arguable.

TBR’s study results point to a long list of performance differentiators based on customer perceptions of product reliability, design and services.

A solid number of corporate notebook customers perceive brand differentiation: greater than one‐third.

OUTSIDE OF PRICE, DO YOU SEE ANY OF

THE CORPORATE NOTEBOOK VENDORS AS

HAVING DIFFERENTIATED THEMSELVES IN

THE MARKETPLACE?

No, 62.7%

Yes, 37.3%

TBR

SOURCE: TBR.





Customers fairly equally cite the top tier as most differentiated notebook brands

Dell moved slightly ahead of Lenovo as the brand most likely to be associated with differentiation in the corporate notebook space in 2Q08.

Mentions of HP ran slightly behind those of Lenovo, but certainly much higher than observed in past studies.

Less than 10% of customers identified either MPC/Gateway or Toshiba as differentiated notebook PC brands.


IF YES, WHICH ONE?

Dell, 26.0%

HP, 19.8%

Lenovo, 23.3%

Toshiba, 5.3%

MPC/Gateway,

7.6%Other, 19.1%

SOURCE: TBR.

TBR





HP continues to keep pace with Dell and Lenovo as most differentiated corporate notebook brands

Mentions of Dell as the most differentiated notebook vendor have declined over time –from a high of 38% in 2Q06 to its current 26%.

Mentions of Lenovo have also been declining, from 32% in 4Q06 to 23% in 2Q08.

The difference has largely been made up by an increase in mentions of the HP brand since 4Q06. Mentions of HP have increased gradually over time, from a low of around 15% in mid-2006 to its current 20%.


NOTEBOOK VENDOR IDENTIFICATION AS MOST DIFFERENTIATED

0%

5%

10%

15%

20%

25%

30%

35%

40%

4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08

Dell Lenovo HP MPC/Gateway Toshiba

TBR

SOURCE: TBR.





Hardware reliability, design and services are most often cited as sources of brand differentiation

Reasons for selecting Dell: Hardware reliability as primary mention yet support received nearly as many mentions. Customer services and features as secondary mentions.

Reasons for selecting Lenovo: Hardware reliability as primary mention. Secondary factors include product design and support services.

Reasons for selecting HP: Hardware reliability as primary mention. Secondary factors include product design and support services.


Customers citing Dell as the most differentiated corporate notebook brand were the most likely to cite services and support as the reasons. Those citing Lenovo as most differentiated were the least likely to do so; these customers were highly focused on product integrity and design issues over services. A similar perspective exists among HP customers.

REASONS CITED FOR SELECTING BRANDS AS DIFFERENTIATED

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Hardware Quality/Reliability

Features/ Design

Support Services Availability/ delivery

Performance Tools Relationships Consistency/ Stability

Dell Lenovo MPC/Gateway HP Toshiba

SOURCE: TBR.

TBR





Appendix A: Analytical Graphs & Tables





Stated relevance of satisfaction attributes continues to focus on product integrity and overall value

Critical: Hardware reliability

Very Important: Overall value

Also Important: Parts availability, ease of doing business, delivery time, repair time

Less Important: Product design, phone support

Differences:

MPC/Gateway customers indicated a significantly higher requirement for technical support, parts availability and ease of doing business than competitors’ customers.

Lenovo customers increased their expectations of their systems manufacturer in 2Q08, particularly around hardware quality and design as well as notebook value.

HP customers continue to downplay the importance of technical support, including parts availability.

Emerging Trends: Ease of doing business has moved up a few rungs on the priority ladder, driven by the correlation between this and supply chain and technical support issues.

Relative Importance of the Attributes

CORPORATE NOTEBOOK IMPORTANCE RATINGS BY PRIMARY VENDOR

2.5 3.0 3.5 4.0 4.5 5.0

Phone Support

Product Design Features

Time to Repair

Delivery/Availability


Replacement PartsAvailability

Value

Hardware Quality


TBR





Multiple, highly correlated influences affect overall satisfaction positionsHardware quality, support, and ease of doing business are the unifying factors

The multiple regression analysis shows the influence of satisfaction attributes on perceptions of vendors overall.

Most of the selected attributes pointed to areas where sector leaders earned competitive strength determinations in 2Q08 – Dell, Lenovo, and HP.

MPC/Gateway, however, was adversely affected by lower-than-average satisfaction positions across a number of critical areas.

Derived Importance

Broad Influences: The multiple regression for all notebook customers points to the following order of influences: hardware reliability, repair time, ease of doing business, value, delivery time, phone support, and product design.

Attributes in BOLD text indicate competitive strength areas with positive effects on the overall satisfaction rating. Those in red text indicate competitive weaknesses having a negative effect on the overall satisfaction rating.





Statistical significance test No. 1 reveals that all measured attributes are performance differentiators in 2Q08

This test compares each player’s performances against the sum of its competitors’ using standard test

Statistical Significance Tests

The 2Q08 reporting period has been unique in that every category exhibited significant performance differences. Most of these were influenced by significantly declining positions on the part of MPC/Gateway for the past two reporting periods. When removing MPC/Gateway from the equation, the following strong performance differences remain:

The comparative strength of Dell and Lenovo versus Toshiba’s weakening performance for parts availability and repair time.

The comparative strength of HP and Lenovo against Toshiba’s weakening performance for ease of doing business.

Lenovo’s distinctively powerful performances relative to hardware reliability, product design, and phone support.

Dell’s standout performances for delivery time and value.

An additional rationale for the No. 1 ranking positions of Dell and Lenovo and the No. 3 and No. 4 positions of Toshiba and MPC/Gateway: the cumulative effect of satisfaction positions across all attributes, as

indicated by the “Grand Mean” satisfaction positions.





Statistical significance test No. 2 elaborates on the findings of test No. 1This test exhibits paired comparisons using the standard test


The band of distinguishing performances covers all measured attributes, some with a greater number of significantly differing performances than others. Some noteworthy successes include:

Dell outperformed each competitor at statistically significant, high-confidence levels relative to parts availability satisfaction. Dell outperformed all but Lenovo at similar levels relative to repair time satisfaction.

Lenovo significantly outperformed each competitor, at high levels of confidence, for hardware reliability satisfaction. Lenovo also outperformed three out of four competitors for product design; however, its win over HP was of lower confidence.

HP significantly outperformed both MPC/Gateway and Toshiba at high levels of confidence relative to ease of doing business satisfaction.





Statistical significance test No. 3 confirms most performance difference areas of the standard tests

The Bonferroni correction test is the most stringent of TBR’s applied tests


The bonferroni correction test confirmed statistically significant performance differences across all but the phone support and notebook value satisfaction categories.

Among the categories with confirmed performance differences, there were some paired comparisons that could not be confirmed (see“Confirmation” column in the table above).

In the end, Dell earned 11 separate wins against competitors, while Lenovo earned 10.5. HP earned four such wins. MPC/Gateway came up short in 19.5 incidences to Toshiba’s six.





The Competitive GAP Analysis exhibits several examples of expectation fulfillment exceeding or falling short of the industry averages

Competitive GAP Analysis

Examples of exceeding, or nearly exceeding, customer expectations:

Dell: Parts availability, repair time, delivery time.

Lenovo: Hardware reliability, product design, phone support, parts availability.

HP: Ease of doing business.

Examples of nearly or completely failing to meet customer expectations:

Toshiba: Parts availability, repair time.

MPC/Gateway: All but phone support and notebook value. Marks most seriously missed relative to hardware reliability and parts availability.

NOTEBOOK VENDOR COMPETITIVE GAP ANALYSIS 2Q08

40

60

80

100

120

140

160

Del

iver

y/A

vaila

bilit

y

Pho

ne S

uppo

rt

Rep

lace

men

tP

arts

Ava

ilabi

lity

Tim

e to

Rep

air

Har

dwar

e Q

ualit

y

Val

ue

Ove

rall

Eas

e of

Doi

ng B

usin

ess

Pro

duct

Des

ign

Feat

ures


Exceeds

Fully Meets

Short of

Exp

ecta

tio

n F

ulf

illm

en

t

SOURCE: TBR.

TBR





The top three competitors, particularly Dell, are meeting customer expectations more effectively than in the past

Dell has generally met the mark for meeting customer expectations across the satisfaction categories. However, its notebook value rating of -6.6% was marginally outside the acceptable (-5%) GAP range due to rising Dell customer expectations in 2Q08.

Lenovo’s notebook value rating (-10%) was considerably wider than that of its leading competitors, also driven by rising customer expectations. Lenovo’s GAP positions were borderline for repair time and delivery time. Its hardware reliability GAP was affected by extremely high expectations, in spite of a substantially higher satisfaction position in 2Q08.

HP successfully met all conditions, though many were borderline determinations (reliability, parts availability, value, and repair time).

Toshiba did not effectively meet its customers expectations for technical support, parts availability, and notebook value positions, while nearly missing the mark for ease of doing business, phone support, and hardware reliability as well.

MPC/Gateway fell short of meeting customers expectations across all categories except for product design.

Standard GAP Analysis

2Q08 STANDARD GAP POSITIONS BY VENDOR

-25%

-20%

-15%

-10%

-5%

0%

5%

HardwareReliability

PartsAvailability

Overall Value Time toRepair

Delivery Time Ease of DoingBusiness

ProductDesign

PhoneSupport


TBR

SOURCE: TBR.





Units Installed, Purchased and Planned

Lenovo, HP, and Dell sites represent the largest installed base and purchase intent for corporate notebook PCs.

MPC/Gateway and Toshiba sites are the smallest in terms of both installed base and purchase intent.

On average, companies have more than 1,600 notebooks installed and plan to purchase 350 in the next 12 months at an average 20% replacement rate.

Notebook PC Buying Behavior





Appendix B: Corporate Notebook Customer Satisfaction Scores:

3Q05 Through 2Q08





3Q05 Through 2Q08

Notebook Customer Satisfaction Scores





Appendix C: Calendar Quarter Movements (Performances of the Past Four Calendar Quarters)




TBRTechnology Business Research, Inc. Calendar Quarter Movements

DELL NOTEBOOK SATISFACTION, PAST FOUR CALENDAR QUARTERS

5.00

5.20

5.40

5.60

5.80

6.00

6.20

6.40

HardwareQuality

ProductDesign

Value Ease ofDoing

Business

DeliveryTime

Repair Time ReplacementParts

Availability

PhoneSupport

OverallSatisfaction

Jul-Sep 07 Oct-Dec 07 Jan-Mar 08 Apr-Jun 08

SOURCE: TBR.

TBR





HP NOTEBOOK SATISFACTION, PAST FOUR CALENDAR QUARTERS

5.00

5.20

5.40

5.60

5.80

6.00

6.20

6.40

HardwareQuality

ProductDesign

Value Ease ofDoing

Business

DeliveryTime


Availability

PhoneSupport

OverallSatisfaction


SOURCE: TBR.

TBR





LENOVO NOTEBOOK SATISFACTION, PAST FOUR CALENDAR QUARTERS

5.00

5.20

5.40

5.60

5.80

6.00

6.20

6.40

HardwareQuality

ProductDesign

Value Ease ofDoing

Business

DeliveryTime

RepairTime

ReplacementParts

Availability

PhoneSupport

OverallSatisfaction


TBR

SOURCE: TBR.





TOSHIBA NOTEBOOK SATISFACTION, PAST FOUR CALENDAR QUARTERS

5.00

5.20

5.40

5.60

5.80

6.00

6.20

6.40

HardwareQuality

ProductDesign

Value Ease ofDoing

Business

DeliveryTime

RepairTime

ReplacementParts

Availability

PhoneSupport

OverallSatisfaction


TBR

SOURCE: TBR.





MPC/GATEWAY NOTEBOOK SATISFACTION, PAST FOUR CALENDAR QUARTERS

5.00

5.20

5.40

5.60

5.80

6.00

6.20

6.40

HardwareQuality

ProductDesign

Value Ease ofDoing

Business

DeliveryTime


Availability

PhoneSupport

OverallSatisfaction


TBR

SOURCE: TBR.





Appendix D: Satisfaction Trends by Competitor





Dell Historical Performances, 1Q07 to 2Q08

Satisfaction Trends

DELL SATISFACTION TRENDLINES, PAST 18 MONTHS

5.00

5.20

5.40

5.60

5.80

6.00

6.20

1Q07 2Q07 3Q07 4Q07 1Q08 2Q08

Delivery Time Phone Support Parts Availability Repair Time

Hardware Reliability Notebook Value Ease of Doing Business Product Design

SOURCE: TBR.

TBR





HP Historical Performances, 1Q07 to 2Q08

Satisfaction Trends

HP SATISFACTION TRENDLINES, PAST 18 MONTHS

5.00

5.20

5.40

5.60

5.80

6.00

6.20

1Q07 2Q07 3Q07 4Q07 1Q08 2Q08

Delivery Time Phone Support Parts Availability Repair Time

Hardware Reliability Notebook Value Ease of Doing Business Product Design

SOURCE: TBR.

TBR





Lenovo Historical Performances, 1Q07 to 2Q08

Satisfaction Trends

LENOVO SATISFACTION TRENDLINES, PAST 18 MONTHS

5.00

5.20

5.40

5.60

5.80

6.00

6.20

6.40

1Q07 2Q07 3Q07 4Q07 1Q08 2Q08

Delivery Time Phone Support Parts Availability Repair TimeHardware Reliability Notebook Value Ease of Doing Business Product Design

SOURCE: TBR.

TBR





Toshiba Historical Performances, 1Q07 to 2Q08

Satisfaction Trends

TOSHIBA SATISFACTION TRENDLINES, PAST 18 MONTHS

5.00

5.20

5.40

5.60

5.80

6.00

6.20

1Q07 2Q07 3Q07 4Q07 1Q08 2Q08


SOURCE: TBR.

TBR





MPC/Gateway Historical Performances, 1Q07 to 2Q08

Satisfaction Trends

MPC/GATEWAY SATISFACTION TRENDLINES, PAST 18 MONTHS

4.60

4.80

5.00

5.20

5.40

5.60

5.80

6.00

6.20

1Q07 2Q07 3Q07 4Q07 1Q08 2Q08


SOURCE: TBR.

TBR





Appendix E: Confidence Graphs





Hardware Quality/Reliability

Confidence Graphs

1Q08 2Q08





Product Design

Confidence Graphs

1Q08 2Q08





Notebook Value

Confidence Graphs

1Q082Q08





Delivery Time

Confidence Graphs

1Q08

2Q08






Confidence Graphs

1Q08 2Q08





Phone Support

Confidence Graphs

1Q082Q08





Repair Time

Confidence Graphs

1Q08 2Q08






Confidence Graphs

1Q08 2Q08





Appendix F: Study Design & Methodology





2Q08 Sample Overview

TBR’s 2Q08 Notebooks: Corporate IT Buying Behavior & Customer Satisfaction Study is based on interviews with qualified respondents at 656 medium and large U.S. and Canadian establishments, primarily MIS/IT, systems management and purchasing managers.

A number of the respondents are responsible for purchasing multiple brands for their company or site and thus were interviewed twice (once for each brand).

Consequently, 7528 interviews were completed for the reporting period.

The corporate notebook segment interviews for the reporting period were distributed as follows: 150 Dell customer interviews; 150 MPC/Gateway customer interviews; 150 HP customer interviews; 152 Lenovo customer interviews and 150 Toshiba customer interviews.

Interviewing took place between Jan. 2 to June 30.

Study Design & Methodology

Methodology & Sample





Demographics: Type of Business/Industry

Study Design & Methodology





Regional Distribution

Demographics

NORTH AMERICAN DISTRIBUTION OF SAMPLE BASE

Canada6%

Central North19%

South Atlantic18%

New England5%

Central West11%

Central South11%

Pacific19%

North Atlantic11%

TBR

SOURCE: TBR.





Number of Employees

Demographics





Job Titles & Functions

Demographics





IT Infrastructure

Demographics

Sample for 2Q08 represents a total of 3.5 million units (desktops, laptops, servers), and represents total purchase intent of 500,000 units.





Appendix G: Analytical Procedures





Satisfaction Ratings

Totally Dissatisfied

(Failure) Mediocre Totally

Satisfied Failure Very Poor Poor Fair Good Very Good Excellent

1 2 3 4 5 6 7

The customer satisfaction analysis was based on several lines of questioning. Respondents were asked to grade their vendor across a series of attributes (listed below) for each brand the surveyed corporations purchased in the most recent buying cycle. At the conclusion of the attribute testing, respondents were asked to provide a rating based on a 7-point Likert scale.

Respondents were also asked to indicate the relative importance of each of the attributes in choosing their brand. These responses were given on a 1- to 5-point scale, with 1 meaning not at all important and 5 meaning very important. These ratings determined the gap between vendor satisfaction and importance, or how well the vendor manages expectations.

Respondents were then asked to indicate on a 1- to 5-point scale the degree of their loyalty toward their primary vendor(s). Finally, respondents were asked whether their corporation switched from one vendor to another during the past 12 months, and if so, which vendors were involved and why a change was made.

Analytical Model





Measured Attributes

Customer satisfaction and relative importance were measured for each of the following attributes.

Analytical Model

Delivery Time/Product Availability Phone Support Replacement Parts Availability Time to Repair Hardware Quality/Reliability Overall Value Ease of Doing Business Product Design/Features Overall Satisfaction





Satisfaction StatisticsA table of satisfaction statistics (including mean, standard deviation, standard error, range around the mean representing 95% confidence interval and standard t-test) describes customer satisfaction for each vendor in each attribute area, with special emphasis on overall satisfaction. A series of t-tests was performed on each vendor against the sum of its competitors, and the attribute areas where significant differences in score were indicated are marked. The t-test is a significance test that compares two means in order to determine if one mean is significantly different than the other, taking variability of response into consideration. The purpose of these tests is to determine if any of the group’s mean differences observed (e.g., a group being a set of customers of one vendor) cannot be entirely explained by random or natural variation within sampled groups of customers. In other words, the observed differences are real. TBR uses an independent sample t-test assuming unequal variances, or the standard student’s t-test. Those attributes with an α level of 0.05 or less are cited as indicating there is a 95% chance that concluding the two means are different is correct. A t-test of the grand mean (the mean of all scores for all attributes combined) serves to determine whether any of the vendors’ scores overall tend to run higher or lower than the competitors’ scores.

As a backup to the above tests, an alternate test (the Bonferroni correction) is used for confirmation purposes (e.g., one-way analysis of variation). The variation within a group of customers is first determined in these one-way ANOVA tests. These variations are then compared to the variability between the groups (e.g., between the Dell, HP and IBM customers). The between-group variation is measured by the sum of the squared differences between the sample mean of each group and the grand mean, which is then weighted by the sample size in each group. The between-group variation will be larger than the within-group variation (variation within each specific customer group) if there are meaningful differences between the means. The attributes that pass this additional test are also cited in the report. While the one-way ANOVA identifies which attributes are affected by differing means according to customer group, further tests such as the Bonferroni identify exactly which means differ from one another.

Analytical Procedures





The competitive GAP analysis measures the gap between a vendor’s customer satisfaction for each attribute area against the expectations (importance ratings) of the market (all respondents). The standard against which each vendor is measured is the average size of that gap for all notebook vendors. The GAP analysis compares vendor satisfaction per attribute against importance per attribute among the vendor’s customer base relative to overall satisfaction for all vendors per attribute against overall importance for all vendors per attribute. The formula for each attribute area independently is as follows:

GAP = ____(Vendor Importance * (7-Vendor Satisfaction)____ * 100(Grand Mean Importance * (7-Grand Mean Satisfaction)

The product for the above is graphed on a scale where values between 40 and 80 are areas where the vendor exceeds customer expectation; values between 81 and 120 are where the vendor fully meets expectation; and values greater than 120 are where the vendor falls short of expectation.

A second GAP analysis (the standard GAP analysis) considers how each systems vendor manages the expectations of its own customer base. For each vendor independently and for each attribute area, the mean satisfaction rating is graphed next to the mean importance rating (adjusted from a 5-point scale to the 12-point scale used for customer satisfaction). There are three possible outcomes: satisfaction meets customer expectation (bar graphs are equal or within a range where the gap is not significant); satisfaction falls short of expectation (indicating areas where the systems vendor may want to consider focusing greater efforts on raising satisfaction); and satisfaction exceeds expectation (indicating attribute areas where the systems vendor may be focusing more than is necessary).

Yet another GAP analysis (the Improvements GAP analysis) is focused on determining the areas where the vendors need to set up improvement programs and areas where they may be able to pull back resources. It uses a similar formula to the competitive GAP analysis; however, the denominator becomes the grand mean importance and satisfaction for the vendor across all of the attributes. In this test, TBR compares the gaps for each of the individual attributes against the average gap for the vendor. Areas where the gaps measure wider than the average are areas where the vendor most urgently needs to focus its improvement efforts.


GAP Analyses





A trend analysis compares each vendor’s customer satisfaction scores for the current reporting period separately against those from both the preceding reporting period and the reporting period prior to that. By comparing against both reporting periods, TBR is able to determine if any changes are indicative of a real change in historical pattern. This graph uses a 95% confidence-interval technique; the scores for each vendor are represented with the mean indicated in the middle from which the lines extend in both directions the distance of the standard error around the mean. This analysis is used to determine the reasons a vendor may move up or down in the rankings from previous reporting periods: Is it because the vendor improved or because the competition declined in customer satisfaction? The analysis also is used to pinpoint potential problem areas or areas where marked improvement is evident.

A multiple regression analysis is run for each form factor and for each vendor in order to determine the principal drivers of overall satisfaction. Each of the attributes is specified as independent variables and measured against the dependent variable: overall satisfaction. The attributes selected are the best predictors for overall satisfaction. The analysis uses a stepwise multiple regression with missing values handled in one of two ways: the missing values are replaced by the mean or pair-wise comparisons are made. TBR advises the reader to consider the results of this analysis with a measured amount of caution because many of the attributes are highly correlated with one another and can be as highly correlated with one another as they may be with the overall satisfaction attribute. The smaller sample sizes encountered when broken down by vendor also detract from the reliability of the results.


Trend Analysis & Multiple Regression Analysis





Loyalty ratings are provided by the respondents for their primary vendor(s) on a scale from 1 to 5, where 1 means little to no loyalty and 5 means solid loyalty. The means for each vendor are represented against one another and against the grand mean. The loyalty ratings are becoming less reliable indictors of true customer satisfaction because strong levels of loyalty are often established higher up within an organization as corporation mandates. They are not necessarily related to customer satisfaction as feedback from the actual users within the organization.

Levels of vendor loyalty are confirmed by determining from the respondents whether they have switched from one vendor to another during the past 12 months. In addition to determining the proportion of companies that have switched brands, the study determines which brands were involved and the principal reasons for the switch.


Vendor Loyalty Ratings





Numeric Weighting Model


1. A numeric weighting model is applied in order to provide a ranking of the vendors and a meansfor tracking overall change in customer perception over time. Where N represents the total number of attributes, AI the importance score for each attribute and AS the satisfaction scorefor each attribute, the formula applied for calculating the weighted satisfaction index, on anindividual respondent basis is:

Weighted Satisfaction Index = 100*7/1

1

⎟⎟⎟

⎠

⎞

⎜⎜⎜

⎝

⎛

∑

∑

=

=N

ii

N

iii

AI

AIAS

Note: The total number of attributes for the notebook segment = 8 The above has been calculated for each respondent, with missing values (Don’t Know or Not Applicable responses) having been replaced with the mean value for the attribute for the vendor group. The weighted satisfaction index for each vendor is the mean of the respondents’weighted scores. The calculation for the individual satisfaction index is as follows. Where S = the sum of the satisfaction rating times the corresponding importance rating across the total attributes; and where I = the sum of the importance ratings across the attributes:

Weighted Satisfaction Index = ( )1007∗IS





Vendor Ranking Positions

Vendor ranking positions are determined primarily based on the average weighted satisfaction index positions, with a minimum distance of 1.0% generally required in order for TBR to assign separate ranking positions to any two vendors. The determination of ranking positions does not end here, however. Additional factors such as number of competitive strengths versus weaknesses also play into the final decision, which is a team effort by TBR principals. Consequently, less than a 1% distance can occur between two vendors’weighted satisfaction index positions, yet they may be assigned separate ranking positions based on the additional factors stated above.


A competitive strength and weakness table is the final result of all the above analyses. The table points to the attribute areas that are definite strengths or weaknesses for each vendor. Areas of neutrality are those attributes where the vendor’s customer satisfaction performance is about average. The formula utilized for the determinations is: each attribute receives a score of 0 for neutrality, +1 for a positive and –1 for a negative. Three analyses are reviewed: the t-test analysis (0 for null, +1 for significantly higher scores and –1 for significantly lower scores); the competitive GAP analysis (0 for meeting expectation, +1 for exceeding and –1 for falling short); and the vendor GAP analysis (same as above). The standard t-test results are compared to those of the more stringent “Bonferroni analysis” and those passing both tests are noted with an extra point. The three scores for each attribute are summed up. Any attribute with a total score of +2 or –2 is cited as a strength or weakness; total scores between these ranges are cited as neutral areas. Those with scores of +3 or –3 are areas of particularly strong strength or weakness. Marginal determinations (warnings or marginal strengths) come about when the determination is borderline, e.g., only the first t-test was passed, or the t-test was passed as a potential area of strength but a poor GAP rating negated it.

Competitive Strength & Weakness Table





Appendix H: Survey Instrument





2Q08 Survey Instrument

Survey Instrument

III. LAPTOP/NOTEBOOK SATISFACTION 1. Are you personally involved in evaluating or recommending laptop/notebook personal computers for

your organization? YES [ ] Continue NO [ ] Get referral and Proceed to section IV (Service and Support)

2. Please list all brands of NOTEBOOKS purchased by your company over the past year and what are the

approximate proportions of annual purchases?

1. _____________________________________ ______% 2. _____________________________________ ______% 3. _____________________________________ ______%

TOTAL MUST ADD UP TO 100% SELECT THE LEAST POPULAR BRAND WHENEVER POSSIBLE (Toshiba, Gateway) AND ASK THEM TO RATE THE VENDOR BELOW. 3. For your (VENDOR BEING RATED) notebooks can you specify the approximate number of units

purchased within the past 12 months? VENDOR BEING RATED # UNITS PURCHASED PAST YEAR

Dell [ ]1 ___________ Gateway [ ]2 ___________ HP [ ]3 Lenovo [ ]4 ___________ Toshiba [ ]5 ___________





2Q08 Survey Instrument1. What are your general levels of satisfaction for your (vendor being rated) Notebooks for each of the

following attributes? This is a 1-7 point scale with the following points, where 1 means totally dissatisfied (complete failure on the part of the vendor) 2 is “ very poor”, 3 is “Poor” 4 means Average/Acceptable or fair, 5 means “good”, 6 means “very good” and 7 means totally satisfied or excellent. Please feel free to answer “Don’t Know” for areas where you are not sufficiently involved and “Not Applicable" for services you do not receive or use or if you have not been buying or using the products for a sufficient period of time.

Overall hardware quality and reliability combining out-of-box quality, hardware reliability and hardware durability?

Failure Very Poor Poor Fair Good

Very Good Excellent Don't Know

Not Applicable

Survey Instrument

1 2 3 4 5 6 7 DK NA

Product design and special features?



Not Applicable

1 2 3 4 5 6 7 DK NA

Overall Value including price paid plus short and long term costs?



Not Applicable

1 2 3 4 5 6 7 DK NA

Ease of doing business with vendor?



Not Applicable

1 2 3 4 5 6 7 DK NA





2Q08 Survey InstrumentProduct delivery time/availability?



Not Applicable

Survey Instrument

1 2 3 4 5 6 7 DK NA

Replacement parts availability?



Not Applicable

1 2 3 4 5 6 7 DK NA

Phone Support?



Not Applicable

1 2 3 4 5 6 7 DK NA

Time to repair includes on-site support and depot repair?



Not Applicable

1 2 3 4 5 6 7 DK NA

OVERALL satisfaction?



Not Applicable

1 2 3 4 5 6 7 DK NA






Survey Instrument

1. We’d like to understand how important each of the attributes were in contributing towards your final decision (above). Using a 5-point scale, where 1 means not at all important and 5 means extremely important, please rate each of the attributes according to their influence over your brand selection.

Not

Important Average Importance Extremely

Important

Hardware reliability/quality/durability 1 2 3 4 5

Product design/special features 1 2 3 4 5

Overall Value 1 2 3 4 5

Ease of doing business with vendor 1 2 3 4 5

Delivery time/product availability 1 2 3 4 5

Replacement parts availability 1 2 3 4 5

Phone Support 1 2 3 4 5

Time to Repair 1 2 3 4 5

2. On a scale of 1 to 5 how solid is your loyalty to your (VENDOR BEING RATED) notebook, with 1 being

the least loyal and 5 being the most? Least Most

1 2 3 4 5






Survey Instrument

1. In the past 12 months, has your company switched (either temporarily or permanently) from one notebook vendor to another?

YES NO (IF Yes ) Switched from ___________________to_____________________________ What was the reason for switching? (If the respondent Switched Vendors check off up to three reason why in the table below)

1 [ ] Pricing/Costs

2 [ ] Corporate Mandate

3 [ ] Reliability/Quality

4 [ ] Support

5 [ ] Availability/Delivery

6 [ ] Relationship with vendor

7 [ ] Hardware design

8 [ ] User preferences

9 [ ] Standardization

10 [ ] Performance/features

11 [ ] Project-driven

12 [ ] Replacement parts availability

13 [ ] Trial/test

14 [ ] Other ______________________





2Q08 Survey Instrument1. Outside of pricing, do you see any of the vendors as having differentiated themselves in the

Notebook marketplace based on product, support, or services?

YES

Survey Instrument

NO (If YES) Which vendor?________________________________ and in what manner? (check all that apply)

Code Reason Inclusions

1 Hardware Quality/Reliability Hardware quality, reliability, durability

2 Support Technical support as specified, also including phone support, parts availability

3 Services Any mentions of services in general, but does not include tech support

4 Features/Design

Added features, anything relating to product design such as scalability, screen size; also includes ease of use, advanced technology

5 Tools Added tools, management tools, manageability, software

6 Performance Anything specifically relating to performance, speed

7 Availability/delivery Product delivery, availability

8 Relationships Sales rep relationships, account reps, ease of doing business

9 Consistency/Stability Anything relating to product planning, usually use words consistency or stability

10 Other Please specify reason

2. Is it likely that Acer will be on your approved vendor list for notebook purchases in the next 12 months? Yes

No Undetermined

corporate notebook pc customer satisfaction€¦ · perceived supply chain and repair time...

Documents