“In a move to improve its bottom line, Dell is changing its shipping options for its low-end desktop and notebook computers, ending a promotion that offered free shipping to customers’ homes,” Red Herring reports. “The policy, which goes into effect October 10, encourages buyers of the company’s least expensive computers to go to the post office to pick up the boxes if they still want the free shipping. It is part of a “hold for pickup” program launched by the U.S. Postal Service Thursday.”
“Dell, like many computer makers, has been cutting back on prices to ship more units and grab market share. But the severely reduced prices are cutting into hardware makers’ profit margins,” Red Herring reports. “Dell PCs lately have been suffering in consumer ratings of reliability and service, according to BusinessWeek. Complaints filed with the Better Business Bureau increased 23 percent in 2004 compared to 2003, and rose another 5 percent in 2005. The company’s customer satisfaction rating also fell 6.3 percent to the industry average of 74 in a survey by the University of Michigan.”
Full article here.
MacDailyNews Take: Get free ground shipping on all in-stock orders totaling $50 or more at the Apple Store.
Related MacDailyNews articles:
Apple continues to lead in customer satisfaction, Dell loses more ground – August 16, 2005
Apple Macintosh leads in personal computer customer satisfaction – August 24, 2004
Apple Macs top PC Magazine’s ’17th Annual Reader Satisfaction Survey’ – August 10, 2004
Beleaguered Dell.
DAMN I’ve been wanting to say that!!!
Seriously though, I don’t think Apple makes much profit on Macs either. The difference is, Apple is an innovative company that has several other revenue streams (iPod, software etc) to supplement its Mac sales. Dell is just another box maker with nothing else to fall back on.
to your home to fix your broken Dell (which is likely since Dells break down so much more than Macs).
Or else he’ll charge you because really you just had virus #8567387.
“Seriously though, I don’t think Apple makes much profit on Macs either”
You’re joking, right?
No, not joking. The situation might have changed with the recent sales growth, but before the iPod phenomenon Apple was only turning a profit through some creative accounting. They were breaking even on Macs at best.
in london visiting and of course just went to see the apple store on regent st, its a sunday and the place which is two stories is absolutely packed with people.
the pc store down the road has just a guy picking his nose. and that was the owner.
yup you pc guys really are where its at.
a good side note, at the store they offer free courses on finalcut and imovie etc, with free wireless, its fun to see the guys using dells trying not to look at the presentation and trying not to look like they arnt fully pissed they cant do whats on screen. super funny stuff. hehe.
Um, what’s with all this “Dell is the most successful computer company in the world” crap?
You mean the Wal-Mart model doesn’t work as well as the Costco model?
No wonder Wall Street doesn’t like Apple and Costco. The companies survive and aren’t sucked dry by stockholders? Spreadsheet jockeys don’t win every argument?
Who’d a thunk.
Bozos.
every whooping success in business, whether it be sears, montgomery ward, ford, general motors, sony, microsoft, dell meets its maker when they fail to see the markets of the future and prepare to take a dominant stake in them. apple made the same mistake back in the 80’s before they were a whooping success ( i believe that’s one of the reasons they are still in business). i think at steve jobs has learned this lesson.
the reason most dominant successful companies have such a hard time sustaining their success is the management team and the board stop doing their jobs and start watching quarterly and annual financial performance. these are just metrics of how you executed a plan in past reporting period. they do not speak to the quality of your plan looking forward. analysts are constantly trying to make that assessment, but but most of them fall very short.
cutting you costs to the bone leaves nothing else to cut. that is dell’s dilema. they are not selling innovation they are selling low price and low quality. my take on what’s going to dramatically change the landscape in this market is when computer functionality becomes something more life impacting than email or playing games and you start depending on it for things that are more important to you. then not having your dell work is a much bigger deal. don’t laugh, but when your media center craps out or becomes clogged with trash that you can’t watch the deciding game of the world series, you will toss that cheap device in the dumpster and get one that works.
the only thing saving dell from that today is media center functionality sucks. when sony fixes that, then the light of reliability will shine on the hardware and dell will look pretty bad.
apple’s future looks bright because people have an expectation that the apple procducts will work. hope they are up to the task.
there was also a comment on mac’s not having margin. don’t forget that part of apple’s strategy is not to depend on just one stovepipe for margin. they have the hardware, software and delivery stovepipes to manipulate. no other company can do that. the only company that can come close is google with it’s emerging desktop to replace windows (that will run on anything that will run linux) and huge delivery network. they are apple’s real competitor.
I think Dell is going to have bigger issues once Xbox 360 hits the market … not because I am a fan of MS (I am most definitely not) … however, I can see that the Xbox will have some functions beyond gaming that I am pretty sure M$ will be able to market to many as a computer replacement.
Attention People: Dell does offer free shipping! You just have to go to the PostOffice to pick it up – so what is the big deal???
It is a new program started by the Post Office.
And in the price of your Mac or iPod you are paying for shipping. If you don´t think so then you are the fool.
So next time when you go buy your Apple product at the Apple store or some other retail place and pay the same price as me who buys online through Apple you are paying for delivery because you went and got it (paying over $2 a gallon for gas), plus paid the same price as me who gets it delivered to my door.
If Apple did away with its “free shipping” and did what Dell is doing all the same people here that make snide remarks about Dell would be applauding and praising Apple´s wise move to try to cut costs to boost its bottom line and increase its stock price.
And for all you accountants that think Apple makes big profits, read Apple´s balance sheet – it is amazing how much interest and revenue one generates from having $6Billion sitting in the bank – which is what makes up a good percentage of Apple´s profits.
Apple makes good margins on all it’s products, or it just doesn’t sell them. Market share is important to them, but so is also getting repeat buisness and staying in buisness.
I have bought Mac’s all these years, they are worth my cash.
I have used Win PC’s, but never will spend the money on one.
Apple financial reports are publicly available. Go and have a look. Nope, I am not doing you the favor to directly provide you the link: learn to search and do research by yourself.
Apple makes quite a profit on Macs and it is the largest voice of their income, beating iPods and related music products and interests from existing cash.
Shees some people
I really doubt that ‘Hippo Crittz’. Personally, I’d rather have the product come to my house than have to go out of my way to go to the Post Office.
Just because it’s Dell doesn’t mean Mac users will blindly bash them. Honestly, I think the new XPS Notebook has some good specs (nVIDIA GeForce Go 7800 GTX – DROOL!!) Too bad the computer itself sucks (design-wise).
As far as Dell and design go (I can’t believe I used those two words in the same sentence), one only has to go to http://dellditty.com to see why people make fun of Dell.
You’ve got to be either in poverty or a loser to buy a Dell.
iPodder: Macs still make up the bulk of Apple’s REVENUE, but not PROFIT. They might have decent margins but there are still operating costs to consider. Plus the prices have been forced down in recent years by the overall PC industry price wars. Apple has only been making hefty profits since the iPod boom.
Apple’s CFO is on the record as saying the company wants to become less reliant on hardware sales for its profits (iPods notwithstanding). That’s why I think it’s inevitable that Mac OS X will one day be licensed out.
Alas you won’t be able to run it on a Dell because there may no longer be any around …
Sure MacJack, but Apple is the one hw manufacturer with the highest margins. iPod has been fantastic but on it alone Apple has no legs. HW sales rose over 30% and are no less than profit from iPod.
Dell does sell good monitors. I brought one to go with my mini. Apples monitors look good but cost way to much.
I agree, although Dell isn’t running specials anywhere near as good as they were a few months ago. The same 20″ widescreen LCD I bought from Dell in April is $130 more now, even when it’s on sale.
Hopefully Mac sales will continue to rise at the current price points. I guess the fact Apple is opening so many retail stores means it intends making computers for quite a few years to come.
NoFreeLunch:
“And Apple offer´s “free shipping”? Attention Macwidgetheads – there is no such thing as “free” anything. You are paying for it one way or another.”
If I go to my local Compusa and buy a 20 Gig iPod, i pay $249 plus TAX (about $20). If I buy it on-line from Apple.com, I pay JUST $249. Let’s see, $249… $269… HMMM… APPLE pays for shipping, not me.