What happened to Packard Bell?

Last Updated on March 11, 2024 by Dave Farquhar

What happened to Packard Bell computers? The firm 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. And that’s one of the reasons people remember it as one of the more prominent of the 90s computer brands, even if many who remember it don’t remember it fondly.

Packard Bell thrived on brand confusion

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, pointing at Compaq and Dell. “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. But this one was one of the more successful ones in history, better than Atari but not quite as good as DeWalt. I think this one worked because there were multiple factors involved.

Packard Bell’s industrial design

For about the first seven years, Packard Bell computers were generic-looking clones, but in 1994 they started changing things up. They had been one of the first companies to try to make desktop PCs smaller. And in 1994 when everyone was selling beige boxes, they brought in a firm called Frog Design to revamp their cases 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 them credit for trying. At the very least, their computers had a distinctive look. I will say my graphic design professor in college, Dr. Birgit Wassmuth, who was a huge admirer of Apple and SGI, called out Packard Bell by name for trying to make computers that weren’t boring beige boxes. At the time, their designs were more bold than anything even Apple dared. From her perspective, here was a firm giving SGI-like designs at a rock-bottom price.

But it takes more than industrial design to make great computers. What happened to Packard Bell? One of my classmates answered Dr. Wassmuth: “Packard BELL? They make the lowest quality computers you can buy!”

Dr. Wassmuth said she could only comment on the industrial design. She was a professor of design, not electrical engineering.

It would have been a brilliant move, but instead, it was more like a last hurrah before their quality issues started catching up with them.

Quality, or lack thereof

Early on, Packard Bell PCs were OK. Their XT- and 286-class PCs lacked pizzazz, but by and large gave average reliability for a low price. That was largely because they were rebadged machines made by other OEMs, such as Samsung. By the 386SX era though, they were cheap and unreliable. And they stayed that way.

The price meant they sold well. Very well, well enough to overtake Tandy as the best-selling brand of computer in North America. 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 was that if there was a corner to cut, they cut it. With exactly one exception. Since they put Intel CPUs in their PCs, they benefited from Intel’s “Intel Inside” marketing campaign. Even some CIOs thought a Packard Bell computer 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 computer 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 OEM unit cost $200 and would fail just as quickly as the old one did. Some of their 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 combined below-average quality with 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. We got more repeat customers than Packard Bell did.

Packard Bell’s many sad returns

I avoided Packard Bell when I sold computers because I wanted to sell solutions that would last. I saw how many of their computers 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.

But more often than not, there was no humorous story involved. Just an unhappy customer who got buyer’s remorse in less than four weeks. The hope was that customer service could talk them into an exchange rather than a refund.

Stores’ policies toward Packard Bell

I worked at Best Buy for a couple of years. Our main competitor, Circuit City, also carried them. The two stores’ attitudes toward Packard Bell was very different. Circuit City would advertise Packard Bell computers in the Sunday papers, but if you came into the store, they trashed talked Packard Bell, in hopes of getting you to buy an AST instead. And truthfully? They didn’t have to lie. They could honestly say you were twice as likely to have a major problem with a Packard Bell computer than any other brand.

Best Buy’s policy was to position Packard Bell in a good-better-best lineup. Packard Bell was (allegedly) good. Acer was better. Compaq, Dell (or HP), and IBM were best.

I pushed other brands because I wanted to sleep at night. If a customer came in with their mind set on Packard Bell, I’d load one up on a cart for them. But if they wanted to talk about it, I directed them toward better brands. I never said anything bad about Packard Bell, but I gave nonverbal cues. I sold a lot of computers, but very few Packard Bells. Some of my coworkers flat out lied about Packard Bell quality. I’m not sure if they knew they were lying or were just repeating what they’d heard someone else say. But I wouldn’t do that.

What happened to Packard Bell was that eventually, the lies didn’t work anymore. Once Compaq found ways to lower prices to compete and narrowed the price difference, there was little reason to buy the lower quality machine.

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 reuse the monitor and printer and whatever was left in the machine that still 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 Bell computers survive today. Not all of them failed early. And to be fair, if they survived the warranty period, they were likely to be just fine. 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.