1986–1987: Foundation
The Packard Bell computer company was incorporated in Chatsworth, Los Angeles, California, in 1986 by Beny Alagem, Jason Barzilay, and Alex Sandel, three Israeli-born United States businessmen based in California. Packard Bell was previously the namesake of an American consumer electronics company founded in the 1920s, Packard Bell Electronics. The latter made a name for itself for its radios before branching out to television sets in the 1950s.
In the 1960s, as with many American consumer electronics companies, Packard Bell encountered difficulty in the marketplace due to increasing competition from Japanese companies like Sony, Sanyo, and Panasonic. In 1968, Packard Bell was acquired by Teledyne Technologies, an electronics conglomerate. Teledyne let the Packard Bell trademark languish in the following years; by the mid-1970s, it was all but retired. Alagem, fascinated by Packard Bell's history as a once-beloved consumer electronics brand, bartered Teledyne for the rights to the trademark for just under $100,000.[11] Alagem later found that brand recognition for Packard Bell was at 70 percent, among a random sampling of adults in the United States.[12]
Alagem and Barzilay met in the 1970s after the former had graduated from Cal Poly. Together, they founded a semiconductor distribution company. In 1983, they merged with another electronics supplier owned by Sandel to form Cal Circuit Abco, Inc., in Woodland Hills, California. Cal Circuit Abco sold computer peripherals on top of semiconductor and had generated over $500 million in annual revenues by 1985. Seeing the increasing commodification of the IBM Personal Computer standard by way of clone makers, or companies that manufactured systems which were plug- and software-compatible with the IBM PC architecture, the three businessmen decided they wanted in and reincorporated Cal Circuit Abco as Packard Bell Electronics in 1986, after Alagem had bought the Packard Bell name from Teledyne. The three leveraged their business connections with Asian electronics companies formed through Cal Circuit Abco to contract the production of an IBM PC clone. They settled on several companies, most prominently Samsung Electronics of Korea and Tatung Company of Taiwan—the former designing and manufacturing the desktop chassis and motherboards and the latter supplying their monitors.[11]
1987–1993: Market launch and early success
The first Packard Bell PC was released to retail in late 1986.[13] As the hardware was largely bare-bones and derivative, the company could not market the computer based on technical merit, nor could they stand to profit from royalties on patents. Instead, the founders were forced to rely on a low price tag for the system, as well as the founders' shared knowledge of marketing and merchandising learned from their electronics vending businesses. In selling the computer it developed three core strategies: equipping its computer systems with various value-adds while selling the complete bundle at a low cost, leaning on the history of the Packard Bell name, and vending the computers at mass retailers.[11] Packard Bell was the first PC clone manufacturer to have the MS-DOS operating system and various pack-in applications preinstalled onto the computers' hard drives, saving customers the hassle of formatting the hard drive with a functional file system, while providing novices basic software to get a running start on the PC paradigm.[11] The hard drives of Packard Bell's low-end line-up of computers were larger than the competition's hard-drive-equipped offerings, at 40 MB, while sold at a lower price.[11] Packard Bell was one of the first PC vendors to offer systems with both 3.5-inch and 5.25-inch floppy disk drives, providing a bridge to the newer 3.5-inch floppy format—the use of which in the PC world was being accelerated by
1993–1995: Increasing market share and expansion in Europe
After clocking annual sales of over $900 million in 1992, Packard Bell passed the $1-billion mark in 1993, with annual sales that year of nearly $1.25 billion, at which point the company employed over 700 workers in the United States. Packard Bell's American market share among PC manufacturers likewise grew from 5.3 percent to 6.7 percent between 1992 and 1993. They were then the fourth-largest personal computer vendor in the United States, trailing IBM, Apple, and Compaq.[11]
As other name-brand competitors began adopting Packard Bell's core strategies of bundling software and expansions, slashing prices, and selling through mass market retailers, Packard Bell responded by offering products at the high-end of the market and moving into Europe, where they were beginning to make inroads. After netting $100 million in sales to Europe in 1992 (10 percent of the company's global sales), Packard Bell constructed a 75,000-square-foot building in the Netherlands and hired 250 workers in the country, including a diverse remote customer service team providing technical support in 12 different languages.[11] By 1993, Packard Bell's products were stocked in 1,500 retail locations across 13 countries, and by 1994, the company was selling 2.1 million product units per year, doubling their previous year's output.[11][21]
1995–2001: Reversal of fortunes and acquisition by NEC
Packard Bell saw gross revenues of $3 billion in 1994 and became the third-largest personal computer vendor in the United States, trailing Compaq and IBM.[11] In 1995, they overtook Compaq for the number one spot in American PC market share, cornering 13 percent of sales in the United States, following a 37-percent rate of growth from the previous year.[11] While the company had seen tremendous growth in the mid-1990s, the long-term efficacy of the company's core strategies were being challenged by mail-order computer vendors such as Dell and Gateway 2000, who were able to shirk the large overheads of warehousing and vending by selling build-to-order. Packard Bell's reliance on retail also imparted a large rate of return on their products, due to the unqualified return and exchange policies most of Packard Bell's retail partners afforded their customers. In 1991 alone, the company deducted $143 million in customer returns on $819 million in gross sales that year.[11] By the end of 1995, Packard Bell saw their profit drop, and they dropped to the number two spot in American PC market share, behind Compaq. The company's reputation around this time was also beginning to be marred by quality control issues and subpar customer service.[36]
2001–2006: NEC Computers
Packard Bell operated as NEC Computers,[53] a division of NEC created to consolidate the company’s personal computer business outside of Japan and China. This structure followed NEC's earlier acquisition of Packard Bell NEC in 1998. During this period, the brand concentrated its efforts in the European market, where it maintained consumer presence after discontinuing its operations in North America around 2000 due to financial challenges and market competition.[54]
By 2003, Packard Bell had offices in 24 countries, excluding the United States.[49] The company reported growth in several European markets during the early 2000s. In 2006, NEC sold Packard Bell to Lap Shun Hui, founder of eMachines, as part of a strategic shift to focus on enterprise-oriented technologies.[55]
2006–2009: Divestiture from NEC and acquisition by Acer
In 2006, the chairman of the California-based Clifford Holdings, Lap Shun Hui, acquired the rights to the Packard Bell name from NEC for an undisclosed sum, establishing PB Holdings in the process. Hui was in talks with Lenovo Group of China to sell the rights to the Packard Bell name to the latter in early 2007. However, Acer of Taiwan ultimately intervened, making a binding offer to acquire PB Holdings in October 2007. Acer's acquisition of Packard Bell occurred in the aftermath of its recent takeover of Gateway in August 2007 and was said to be a strategic deal to prevent Lenovo's expansion into Europe, where Acer had a strong presence.[56] The deal was finalized between January and February 2008, Hui receiving $48.5 million in cash.[57][58]
With the purchases of Packard Bell and Gateway, Acer arranged its marketing strategy so that Gateway products were sold in the Americas and Asia, while Packard Bell products were sold in Africa, Europe and the Middle East; Acer-branded products meanwhile were sold worldwide.[59]
2018–present: Revival in North America
In 2015 Southern Telecom, a Brooklyn-based manufacturer of consumer electronics acquired the Packard Bell brand in North America.[60] In 2018, the company announced the release of new Packard Bell-branded computers.[10]
2019–present: Revival in Africa
Since 2019 Packard Bell has been manufactured under license by Universal Exports Group Limited from Acer Taiwan in the SADC region, Universal has released new models of Phones, Tablets and Laptops which are most prominently available in South Africa.
