Packard Bell

Packard Bell Electronics, Inc.
Company type	Private (originally)
Industry	Personal computers
Founded	January 1, 1986; 40 years ago in Los Angeles, California, United States
Founder	Beny Alagem, Jason Barzilay, Alex Sandel
Headquarters	Nijmegen (Europe headquarters from 1993), Netherlands (Europe headquarters); originally Los Angeles, California, United States
Area served	United States, Europe, Africa, Middle East
Key people	Beny Alagem (founder)
Products	Personal computers, portable media players (later)
Parent	NEC (from 1998), later Acer (from 2008)

Packard Bell is a brand specializing in personal computer hardware, originally established as Packard Bell Electronics, Inc., an independent American computer firm founded in Los Angeles in 1986 by Israeli-American entrepreneurs who secured the trademark rights from Teledyne. Despite its name, Packard Bell is not affiliated with Hewlett-Packard or Bell System.

The company was among the first to target the U.S. mass market for personal computers by distributing products through major office supply retailers. In the early 1990s, it expanded into the European market, setting up its regional headquarters in Wijchen, Netherlands, in 1993. At that time, it ranked as the second-largest original equipment manufacturer (OEM) of IBM PC–compatible computers within the United States. In 1996, Packard Bell merged with NEC, a leading Japanese electronics corporation, creating Packard Bell NEC; by 1998, NEC had acquired majority ownership and converted it into a subsidiary.

When the merger occurred, Packard Bell was the top PC manufacturer in the U.S., overtaking Compaq. However, escalating competition and financial setbacks prompted NEC to halt North American operations by 2000, shifting its focus toward profitable European markets through its Packard Bell Europe division based in the Netherlands. This branch broadened its product range to include portable media players and was renamed NEC Computers International, overseeing all Packard Bell and NEC activities outside Japan and China.

In 2006, entrepreneur Lap Shun Hui purchased Packard Bell from NEC. Following Acer's acquisition of Gateway in 2008, the Taiwanese company also took over the Packard Bell brand. Under Acer’s ownership, Packard Bell BV—located in Nijmegen—continued manufacturing personal computers for markets across Europe, Africa, and the Middle East at least until 2013. Later on, Southern Telecom Inc. obtained rights for North America and reintroduced the brand there in 2018. Moreover, starting in 2019, Universal Exports Group from Hong Kong licensed the brand from Acer for distribution within Taiwan and the Southern African Development Community (SADC) region.

1986–1987: Establishment

Packard Bell was founded in 1986 in Chatsworth, Los Angeles, California, by Israeli-American businessmen Beny Alagem, Jason Barzilay, and Alex Sandel. The company resurrected the Packard Bell name, which originally belonged to an American consumer electronics brand dating back to the 1920s that was known for radios and later television sets. After facing stiff competition from Japanese manufacturers such as Sony and Panasonic, Packard Bell Electronics was acquired by Teledyne Technologies in 1968; subsequently, the brand diminished by the mid-1970s. Alagem purchased the trademark from Teledyne for less than $100,000, recognizing its significant brand awareness—reported at 70 percent among U.S. adults at that time.

Alagem and Barzilay met during the 1970s after Alagem graduated from Cal Poly Pomona. Together they founded a semiconductor distribution business which merged with Sandel’s electronics supply company in 1983 to create Cal Circuit Abco, Inc., achieving annual revenues exceeding $500 million by 1985 through sales of semiconductors and computer peripherals. Foreseeing expansion opportunities within the IBM PC compatible market segment, they renamed Cal Circuit Abco as Packard Bell Electronics in 1986 after acquiring the Packard Bell name. Capitalizing on their business ties in Asia, they partnered with Samsung Electronics to manufacture desktop chassis and motherboards and with Tatung Company for monitors to produce IBM PC clones—establishing a competitive strategy centered on global sourcing and strategic alliances.

1987–1993: Initial Market Entry and Early Achievements

The inaugural Packard Bell personal computer was introduced toward the end of 1986. Featuring mostly minimalistic hardware and free from patent licensing fees, the founders applied their marketing skills from the electronics vending sector to offer competitively priced systems bundled with added value. Their approach focused on delivering complete, budget-friendly computer packages, leveraging the established Packard Bell name, and utilizing mass retail channels for distribution.

U.S. PC market share by revenue, 1991
Company	% Market Share
IBM	18.6
Apple	14.0
Packard Bell	5.7
Tandy	4.1
Gateway 2000	3.6
Compaq	3.5
Everex	3.0
Toshiba	3.6

Packard Bell distinguished itself as the first clone PC maker to ship systems with MS-DOS and essential software pre-installed on hard drives, easing the setup process for buyers. Their entry-level models boasted larger 40 MB hard drives at prices below competitors and included both 3.5-inch and 5.25-inch floppy disk drives, accommodating both older and newer formats popularized by IBM's PS/2 series.

The brand's tagline—"America grew up listening to us. It still does"—capitalized on consumer nostalgia and brand familiarity, occasionally benefiting from confusion with more prominent names such as Hewlett-Packard and Bell Labs.

A cornerstone of Packard Bell’s strategy was its reliance on mass-market retail outlets like Sears, wholesale clubs, and electronics chains—venues largely bypassed by established PC manufacturers who preferred direct sales or specialty retailers. This approach contributed to a tripling of PC sales through mass retailers from 4% to 12% between 1987 and 1992, with Packard Bell dominating this segment.

By 1989, the company achieved $600 million in annual sales, growing to $700 million by 1991 despite economic recession; however, it recorded a net loss of $1 million that year. Expansion into enterprise local area network solutions and advanced CPU cards for power users fueled growth, supported by Infinitech—a comprehensive customer service program offering around-the-clock technical assistance via phone and online bulletin boards.

In 1992, Packard Bell intended to launch an initial public offering aimed at retiring $93 million in debt through a sale of 5.2 million shares priced between $13.50 and $15.50 each. Yet due to a challenging PC market environment and intensifying competition from Compaq, Dell, and AST Research, the IPO was delayed and ultimately cancelled, leaving the company privately held throughout its history.

1993–1995: Market Share Growth and European Expansion

After exceeding $900 million in sales in 1992, Packard Bell surpassed the $1 billion revenue mark in 1993 with nearly $1.25 billion in turnover, employing over 700 staff members in the United States. Its domestic market share rose from 5.3% to 6.7%, positioning it as the fourth-largest PC manufacturer behind IBM, Apple, and Compaq.

As rivals adopted similar tactics—such as software bundling, aggressive pricing, and mass retail distribution—Packard Bell redirected focus toward premium product lines while expanding its presence in Europe. European revenues reached $100 million in 1992 (accounting for 10% of global sales), prompting construction of a 75,000-square-foot facility in the Netherlands staffed by 250 employees providing support in twelve languages. By 1993, its products were available at approximately 1,500 retail outlets across thirteen countries; by 1994 annual unit shipments had doubled to 2.1 million.

In terms of product development, Packard Bell launched Navigator in 1993—a Windows shell replacement tailored for novice users featuring large icons for intuitive application access. The subsequent Navigator 2 (1994) introduced an enhanced hyper-skeuomorphic interface modeled as a three-dimensional house environment. In May 1994, the company acquired Ark Interface, the developer behind Navigator. Later that year it also purchased Active Imagination, Inc., broadening its portfolio into standalone edutainment software distribution—a strategic diversification move.

For industrial design innovation, Packard Bell collaborated with Frog Design in 1994 to refresh its PC lineup with customizable cases featuring removable colored panels and introduced color-coded external connectors aimed at simplifying peripheral installation—a concept that anticipated later PC System Design Guide standards.

The January 1994 Northridge earthquake caused severe damage to Packard Bell's Chatsworth headquarters near the quake’s epicenter, disrupting operations and impacting approximately 1,500 employees. The disaster destroyed equipment and water-damaged documents; consequently, sales offices and parts of manufacturing temporarily relocated to a Westlake Village facility. By summer 1995, headquarters had moved to a new site in Sacramento (the former Sacramento Army Depot), while customer support functions were transferred to Utah.

This era was marked by significant business expansion through increased market share, strategic development of European operations, innovative product introductions, acquisitions enhancing software offerings, and resilient operational adjustments following natural disaster challenges.

1995–2001: Decline and NEC Acquisition

In 1994, Packard Bell recorded $3 billion in total revenue, ranking as the third-largest PC supplier in the United States after Compaq and IBM. By 1995, it temporarily surpassed Compaq to claim the leading American PC market share at 13%, fueled by a 37% increase in sales. Nevertheless, its reliance on retail distribution was challenged by build-to-order competitors such as Dell and Gateway, which operated with lower overhead expenses. Additionally, elevated return rates strained profitability; for example, in 1991, returns amounted to $143 million out of $819 million in sales. By late 1995, Packard Bell had fallen back to second place behind Compaq, amid shrinking profits and mounting issues related to product quality and customer support.

In April 1995, Compaq initiated legal action against Packard Bell for allegedly concealing the use of refurbished components, accusing the company of unfair business practices. Although refurbishment was common across the industry, Packard Bell’s insufficient warranty disclosures triggered investigations by attorneys general in a dozen states. The company resolved several class-action lawsuits by mid-1995 by providing repair credits and revising warranty terms, ultimately paying $5 million to settle claims in 1996. Later that year, Packard Bell filed a defamation counterclaim against Compaq; both parties reached an out-of-court agreement in early 1996 amid ongoing scrutiny of refurbishment practices.

At the start of 1996, Packard Bell made a significant strategic move by acquiring Zenith Data Systems from Groupe Bull. This transaction increased Groupe Bull’s involvement and led to NEC’s full acquisition of Packard Bell in June 1996, integrating it into NEC’s worldwide PC operations. The combined entity, named Packard Bell NEC, marketed products under both brands and briefly became the largest U.S. PC manufacturer by shipment volume with a 15% market share. Globally, it ranked third in PC sales by year-end 1996 but lost ground to competitors like Compaq and Apple by early 1997.

Between 1997 and 1998, financial results worsened dramatically with losses surpassing $1 billion due to fierce price competition from Compaq and eMachines alongside declining consumer satisfaction ratings. This difficult period prompted founder Alan Alagem to leave in 1998. In response, NEC discontinued the Packard Bell brand in the U.S. market by 1999 while continuing its use in Europe where the brand maintained stronger recognition and fewer quality concerns.

2001–2006: NEC Computers International Era

Following NEC’s acquisition of Packard Bell NEC in 1998, Packard Bell operated under NEC Computers International (NEC CI), a subsidiary managing NEC’s personal computer business outside Japan and China. After withdrawing from North America around 2000 due to financial difficulties and competitive pressures, the brand concentrated on expanding within European markets.

By 2003, Packard Bell maintained offices across 24 countries excluding the U.S., reporting growth across several European regions. In 2006, NEC divested Packard Bell to Lap Shun Hui, founder of eMachines, aligning with a strategic shift toward enterprise technology solutions.

2006–2009: Separation from NEC and Acquisition by Acer Inc.

In 2006, Lap Shun Hui purchased rights to the Packard Bell brand from NEC and established PB Holdings Company. Initial negotiations to sell the brand to Lenovo in 2007 were overtaken when Acer Inc. submitted a binding bid in October that year. Acer completed the acquisition by early 2008 for $48.5 million following its earlier Gateway purchase; this move aimed to prevent Lenovo’s expansion into Europe where Acer held strong market presence.

Afterward, Acer designated Gateway products for distribution in the Americas and Asia while positioning Packard Bell for Africa, Europe, and the Middle East; Acer-branded computers continued to be sold worldwide. In 2013, Acer discontinued the eMachines brand but retained both Packard Bell and Gateway within its portfolio.

2018–present: North American Brand Resurgence

In 2015, Southern Telecom, Inc., a consumer electronics firm located in Brooklyn, took ownership of the Packard Bell trademark for the North American territory. By 2018, the company reintroduced Packard Bell-branded computers, signaling a deliberate effort to rejuvenate the brand's presence in this market.

2019–present: African Market Relaunch

Starting in 2019, Universal Exports Group Limited has been producing Packard Bell devices under license from Acer Taiwan specifically for the SADC region. This licensee has rolled out new lines of smartphones, tablets, and laptops, focusing chiefly on consumers within South Africa.

Noteworthy Products

PB286LP, Packard Bell’s inaugural laptop equipped with a 12-MHz Intel 80286 CPU, 1 MB of RAM, an ISA expansion slot, and initially a CGA display later upgraded to VGA
Packard Bell Statesman, a notebook model built on a Zenith Data Systems platform featuring a Cyrix Cx486SLC processor running at either 33 or 50 MHz and offering passive-matrix monochrome or color screens

External links