“A Dell notebook computer that burst into flames last month in Osaka, Japan, has damaged more than just the conference table where it sat smoldering. The incident, publicized in photos on the Internet, has also hurt Dell’s recent attempts to improve its image,” Damon Darlin reports for The New York Times.

“A photo of the burning notebook computer from the Inquirer’s Web site. For a company with earlier public relations issues, the wide publicity generated proved harmful,” Darlin reports.

“The company said the incident got more publicity than such incidents usually do when they happen to other manufacturers. In part, that is because Dell’s reputation for responsive customer service was already under attack after the company, the world’s largest PC manufacturer, started to cut costs at its call centers last year. Dell, reacting to the savaging it has received on blogs and Web sites over the cuts, recently responded with a program to spend more than $100 million to improve service,” Darlin reports.

Darlin reports, “Two days later, Cindy Shaw, a securities analyst with Moors & Cabot, notified her clients about the publicity. Last Thursday, citing reports of a second smoking laptop, this one in Pennsylvania, she advised them that ‘should this story also hit the mainstream press, we believe there is headline risk and potentially negative demand ramifications for Dell.’ Bob Pearson, vice president for corporate group communications at Dell, called Ms. Shaw’s reaction ‘somewhat irresponsible.’ Ms. Shaw said neither she nor her firm had made any financial bets that the company’s stock would fall. She does, however, recommend that clients sell the shares.”

Full article here.

MacDailyNews Take: Does The New York Times count as ‘mainstream press?” wink What would we do if we were in charge of Dell? We’re so glad you asked: We’d shut it down and give the money back to the shareholders.

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