Dell CEO: Apple can’t just have one product and then say they’re the innovative leader of the world

“It’s fitting that 2005 should be the year Dell is named America’s Most Admired Company. The computer maker turns 21 years old in May, and as it attains the age of majority, it has grown from an industry curio into one of the nation’s most prominent and respected corporations,” Andy Serwer writes for Fortune.

“But Michael Dell has been playing the role of youthful renegade for a long time now, and he’s clearly a little uncomfortable when I break the news in his offices in Round Rock, Texas, that his company is at the top of FORTUNE’s list. He thinks about it for a second and then flashes his ‘I can eat nails’ grin. ‘I know my mom would be proud, but I certainly don’t feel like we’re the most admired company,’ he says,” Serwer writes. “Just to give you an idea of how far Dell has come: 21 years ago (when the company was founded) IBM and HP were voted No. 1 and No. 3 respectively on America’s Most Admired Companies list. (At that point if you had asked the voters, “What’s a Dell?” they probably would have told you it was a small, secluded, wooded valley.) As for PC market share, of course, Dell wasn’t on the radar screen, while Commodore, with about $1.1 billion in PC sales, was the industry leader with a 27% U.S. market share. IBM was No. 2, and Apple and Tandy came in at No. 3 and No. 4.”

“Could Dell ever come up with a PlayStation or an iPod on its own? ‘We could. But I don’t think that’s our strategy,’ Dell CEO Kevin Rollins insists. ‘I think there are those who come up with those products, but frankly, as far as technologies that actually help customers, those two products are a one-product event. You can’t just have one product and then say you’re the innovative leader of the world. I’m a big admirer of everything [Apple’s] done. It’s phenomenal. But then to say it’s the world-beating wonder of forever? No, it’s not.’ Hmm, sounds like a case of Apple envy, which is understandable these days. While Dell is almost six times more profitable than Apple, its market cap is only three times bigger. Of course, thanks to the iPod, Apple is growing faster right now, and Steve Jobs’ company has all the buzz,” Serwer writes.

Full article here.

MacDailyNews Take: Dell’s CEO is turning out to be potentially nuttier than even Microsoft’s CEO/Dancing Monkey, Steve Ballmer. Rollins needs to learn how to keep his mouth shut and stop oozing jealousy towards Apple. Dell should be plenty worried about Apple and the Mac platform’s capacity to take away business from Dell and these continued comments by Rollins show his fear. Dell should also be worried about China, which could soon potentially eat commodity Wintel box assemblers like Dell for lunch, but that’s another story.

Fortune’s survey asked businesspeople to vote for 10 companies that they admired most, from any industry. On the top ten list of “Innovation,” Dell was absent while Apple Computer placed 3rd after Kinder Morgan Energy Partners (1st) and FedEx (2nd). On the top ten “Computers” list, at number 1 (ironically, since they’ve exited the PC business) sits IBM with a score of 7.61, Dell at number 2, with 7.46, and Apple Computer scored 6.84, which was good enough for 3rd place. In computer software, Apple isn’t even included on the list – so, now you know just about everything you need to know why this list is a mess. Apple is one of the top software developers in the world.

Fortune and its survey partner, Hay Group, asked the top managers at 582 companies (the largest by revenues in each sector) to judge their competition. In all, 10,000 executives, directors, and securities analysts rated the companies in their industry on eight attributes (Innovation, Employee talent, Use of corporate assets, Social responsibility, Quality of management, Financial soundness, Long-term investment, Quality of products/services). Fortune then asked voters to name the companies they most admire in any business from a pool that included last year’s top quartile of finishers plus the top two on each industry list.

Related MacDailyNews articles:
BusinessWeek: Rather than dismissing Apple products as fads, Dell should try starting a few – January 31, 2005
Dismissive Dell CEO not impressed with Apple Mac mini, calls iPod a ‘one-product wonder’ and a ‘fad’ – January 17, 2005
Michael Dell owes Apple an apology; Apple up 176 percent vs. Dell’s 13 percent in past 12 months – January 15, 2005

88 Comments

  1. I’ve done surveys like this one, and when it comes to unaided recall of “most admired” or whatever, it all depends on what’s in your head at the time. You might have just read something favorable or unfavorable about any company, and that’s what sticks in your head and then comes out.

    I don’t really take too much stock in any of these surveys, either pro Apple or pro anyone.

  2. Dell has innovated and been copied by many manufacturers. However, it has innovated in the way Wal-Mart has innovated–in finding ways to sell products at lower prices. Both sell commidity goods and the focus of their innovation is in cost-cutting, not in advancing the development of anything they sell.

    Funny, my office got a Dell laptop a few months ago, and as I was turning the thing around (its actually the first PC laptop I’ve handled in many years) what struck me is that the thing looked like an overgrown Powerbook 5300–it was like the previous decade in designing laptops had never happened. Don’t get me wrong, inside the case it has whatever commidity design is popular in the intel world–but otherwise it could have been made anytime in the past ten years.

    The problem with Dell is that it therefore is an entirely parasitic entity–it spits out cheap versions of whatever is current, but development is left to others. As far as products themselves, the next new idea Rollins/Dell has will be his/its first.

  3. It is easy for the guys on top to fall really fast. Case in point – UUNET. Remember, back in ’98 and ’99 when they owned the commercial Internet business? They were the ISP of ISPs. There were reports that over 70% of the world’s Internet traffic at some point hit their network. Leased line connections from them got a premium over Sprint, C&W, AT&T. Now though, Internet connecitivity is a commodity, in perception, if not reality. Now, after being swallowed up by WorldCom, most people have not even heard of them. Go to http://www.uu.net and you are directed to MCI’s home page. When your product becomes a commodity, and China is able to produce it and sell it for seriously reduced prices from yours, you are in a dangerous position. Apple, by doing something different, will continue to go along, if not thrive. But if your only advantage is installed base and a low price, as I believe Dell’s to be, you are a low hanging fruit, ripe for the picking.

  4. Unfortunately, I have to agree with KernalPanic. Dell will be around for a while and we have to get used to it.

    Even so, Dell can’t innovate their way out of a paper bag and their CEO should entertain us for the foreseeable future.

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