“Projected sales and earnings shortfalls are the latest signs that Dell’s heady days of outpacing its rivals are ending. And investors aren’t happy,” Louise Lee reports for BusinessWeek. “On the surface, the Oct. 31 news out of Round Rock, Tex., is bad: On Oct. 31, Dell said it would fall short of both revenue and earnings expectations for its fiscal third quarter. Look beyond the surface, and the long-term situation at the world’s largest PC maker may be even worse.”
“After years of heady growth, Dell may be coming back to earth. As the computer giant approaches $60 billion a year in sales, it has now missed expectations for two consecutive quarters. The shortfalls are a sign it may be struggling to manage costs while it tries to sell enough computers to maintain a lofty revenue-growth rate, and keep gaining market share,” Lee reports. “Meantime, companies with more innovative products and better support, such as Apple, are growing at a faster pace.”
Lee reports, “Dell ‘is too much of a one-trick pony,’ says a former high-ranking Dell executive. ‘They’re not innovating, or building enough new businesses. They’ve executed flawlessly for 10 years, but that’s kind of an impossible thing to continue.'”
Full article here.
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can we start calling them “beleaguered” yet?
It couldn’t have happened to a better company or CEO. It’s no coincidence that Mikey Dill has been keeping quite a low profile lately. He realizes his days are numbered.
There may come a time when Apple faces the same dilemma as Dell, but that time is way off into the future. There’s still 90% of the computer market that uses Windows left.
This is why Jobs (and I) think it is so important that Apple does NOT license MacOSX. Dell would love to, as it would give him something to sell that is not losing marketshare. Sure he could switch a lot of Windows users faster than Apple can, but he would be taking sales away from Apple, just like he did from Packard/Bell, Gateway, Singer, Olivetti, ATT and a host of others.
The decline in Dell’s growth rate was inevitable, Apple just hastened it.
The minute Dell said they were going after Compaq and market share I knew they were doomed.
Sooner or later, you run out of people to sell cheap low margin machines to. This is what is happening to Dell. They are also being hit with quality control issues that hurt the bottom line, damage reputation and is directly related to having to cut costs to maintain revenue and profits.
It’s taken a few years but now Dell is hurting.
“isnt apple just a box assembler too? i mean..both companies assemble computers, one just happens to make them way better. what’s the diff., besides how they look?”
Well george, if you have to ask this question, then you arent a Mac user, that’s for certain. Dell is JUST a box assembler. That’s all they do. Apple makes a computing experience, of which, the box is just a part of. Dell doesnt do this. They don’t make an OS, they don’t write compelling and easy to use software. Apple does. They offer their users a value that Dell cannot, beyond the initial sticker price. But, you DO get what you pay for. And Apple users may feel like they pay more, but what they get in return is much more than what they would get if they saved 100 bucks buying a soulless Dell box.