What happened to Packard Bell? It ceased operations in the United States in 2000, after a 14-year reign of terror on the consumer market.
But there’s more to the story than that. The Packard Bell story is a brilliant piece of marketing. The computers were terrible, but the marketing was as good as it gets.
In 1986, Packard Bell was the name of a defunct manufacturer of TVs and radios. Founded in 1926 or 1933 depending on how you count it, it survived until 1968 when it sold out to Teledyne.
In the 1980s the brand still had some name recognition on its own. But look at the other names it resembled: Pacific Bell, the telephone company. Hewlett Packard, the computer company. Packard, the defunct maker of luxury cars.
It sounded like an old-line company making quality products, which was what Beny Alagem counted on. He even put the slogan “America grew up listening to us. It still does,” on its early marketing literature.
People always confused them for something they weren’t, and for a time, it helped. “I don’t know about other brands,” one customer said to me when I was selling computers in 1994. “But Packard Bell, that’s an old company.” Even my coworkers routinely thought Packard Bell was related to HP or to Packard, the car maker.
Brand resurrections don’t always work. I think this one worked because there were multiple factors involved.
Unique industrial design
The first Packard Bell PCs were generic-looking clones, but it didn’t take long for them to start changing things up. Packard Bell was one of the first companies to try to make desktop PCs smaller. And by the mid 1990s, when everyone was selling beige boxes, Packard Bell experimented with different colors and even changing form factors including an unorthodox L-shaped corner design.
Was it great design? Ask an industrial designer. But I have to give Packard Bell credit for trying. At the very least, their computers had a distinctive look.
Quality, or lack thereof
Early on, Packard Bell PCs were OK. Their XT- and 286-class PCs lacked pizzazz, but gave average reliability for a low price. By the 386SX era though, they were cheap and unreliable. And they stayed that way.
The price meant they sold well. Typically they cost a couple hundred dollars less than a comparable PC from Hewlett Packard, Compaq (then a separate company), Dell, or IBM. When I worked at Best Buy in the mid 1990s, Packard Bell may have accounted for 50% of our computer sales, on its own.
The problem with Packard Bell was that if there was a corner to cut, they cut it. But since they put Intel CPUs in them, they benefited from Intel’s “Intel Inside” marketing campaign. Even some CIOs thought a Packard Bell with an Intel CPU in it was better than anything with an AMD or Cyrix chip in it. It wasn’t true, but it proves how well those marketing campaigns worked together. Our local Compaq sales rep hated Intel for it, and that was why Compaq gave startup cash to Intel competitors. Compaq made better machines and didn’t appreciate Intel telling everyone otherwise.
Everything else inside a Packard Bell machine was lowest-bidder. Making matters worse, the power supplies tended to be weird form factors so you couldn’t replace them with a $40 off-the-shelf unit when they failed, which was often. A replacement unit from Packard Bell cost $200 and would fail just as quickly as the old one did. Some Packard Bell motherboards were NLX form factor, which was expensive but replaceable. Others were weird form factors with no off the shelf replacement. Part of this was due to Packard Bell’s unique industrial design. The computers looked good, but it limited what parts you could use to fix them.
Poor quality doesn’t have to be a death sentence. Gateway 2000 sold PCs that were below average in quality. People bought them anyway because Gateway had great customer service. Packard Bell had lousy customer service. I personally took a lot of phone calls from Packard Bell buyers. It was easier to call the store for answers than the manufacturer.
I avoided Packard Bell when I sold computers because I wanted to sell solutions that would last. I saw how many Packard Bells came back. Officially, it was 1 in 6 sold. Industry average at the time was 1 in 12.
Sometimes they came back with a good story. Early in the 386 era, computers came with keys. You could lock them to keep someone from turning them on without permission.
Well, someone bought one, brought it home, set it up, and couldn’t make it work. So they brought it back. “I followed the instructions perfectly,” he said. “Then I turned the key and nothing happened!”
It’s a computer, not a lawnmower. The key story remained a running joke for years.
No repeat buyers
Not many people bought a second Packard Bell. They’d get a $1,500 bundle–which was cheap for the time–and when the computer broke, they’d buy a different brand and recycle the monitor and printer and whatever was left in the machine that worked.
Packard Bell got bad ratings from the PC magazines like PC World and from consumer magazines. But the final blow was the 1995 revelation in that Packard Bell routinely sold “new” PCs with recycled parts in them. That year, Packard Bell merged with NEC, the Japanese electronics maker. Some hoped that would mean better quality and lower prices due to the increased volume. The synergy didn’t happen. By 2000, NEC pulled the name off the market.
Packard Bell survives in name only in Europe, now as a division of Acer. In Europe, the name wasn’t as tarnished. Acer also owns the Gateway and Emachines brands. Packard Bell was a notch or two below them.
Of course, some vintage Packard Bells survive today. Not all of them failed early. But relative to the number of machines sold, they’re pretty rare today.
Like I said, Packard Bell was a brilliant stroke of marketing. But since they backed it up with poor quality and poor customer service, it turned into a flash in the pan, even more of a fly-by-night than the low price leader they displaced, Commodore. Low prices and nice design and brand recognition couldn’t overcome the industry-worst quality. So that’s what happened to Packard Bell.