“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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Paul Thurrott is not in the office at the moment, he’ll try to respond if you leave a name and number after the beep.
Well….
Michael Dell better refund his shareholder’s money while he has some left.
Maybe Mike Dell can become the VP of Hardware Sales and Distribution at Apple.
Mugwump: Maybe Mike Dell can become the VP of Hardware Sales and Distribution at Apple.
LOL!!!!!
Time for a garage sale to sell the company’s assets and return it to shareholders, eh Michael?
“Michael Dell better refund his shareholder’s money while he has some left.”
Right on, MacSmiley.
While Dill is at it, he might as well refund his customers their money for those sh*t boxes he’s peddled to them all these years, masquerading as computers.
Of course, Dill will never follow his own sage investment advice, because he has no business ethics whatsoever.
Go on Mikey Dill, prove me wrong, I dare ya…
Dell can only wish it were a one-trick pony. In reality, it is a lame pony.
They shoot horses, don’t they?
Maybe Dell should start selling toasters, refridgerators etc., as their core competencies apparantly lie in box-building…
microsoft won’t be at all happy at this news…
I can see the trickle down the legs of ballmer AND gates now…
Business 101, Dell can’t even build boxes. Apple can build boxes, no Dell pc box will ever send shivers of anticipation and awe down my spine the way an apple iPod, Powerbook, etc will.
Dell have nobody to copy no more and you can only fool the public for so long with those $300 computers. And they know this but they kept pumping out junk.
They fool only the poeple who don’t know nothing about computers and have them buy and then tell them later that they need all this other stuff to get the computer to run right. Mike Dell you are a bottom feeder and need to get off your rich ass a pay the people back, who work so hard to get to where you are now.
How by the way Dell this week is laying off 450 people, that is really sad. They work so hard for the asshole and some of them kiss the ground he walk on. Man I’m glad I don’t work for them. While back these same people was so big about themself and now I bet they are sitting in that room and thinking I kiss ass for so many years for what NOTHING. I’m enjoy this moment now. Apple you go and kick some Dell ass
Very seldom do the basic commodity box sellers thrive beyond the initial stages though in all honesty that first stage can be quite drawn out. But that of course is where lies the problem. When something so basic works for so long and creates such growth it is very difficult to see the fall coming, know how to stop it or even if you see it know, WHEN to make the changes to avoid it, assuming you can. It has to be after all and sundry question why you are changing a winning formula but before the decline in your strategy and business is so great that it can no longer be turned around without drastic intervention. Often (indeed almost always) those 2 time zones overlap in the middle.
That is why Steve Jobs is so good, people simply expect him to prove his critics wrong so their influence made impotent and he can act sooner than most and he has such self belief and charisma that even when things are going wrong he has the willpower to convince his critics that he can turn it around. Thats why replacing him will be so tough. The Michael Dells of this world on the other hand are ten a penny even if they are good at selling wash powder.
In Britain we had a similar figure to him in Alan Sugar who achieved very similar impact in the 80s with cheap computers and hi fi but of course on a tiny scale by comparison to Dell. The one thing I admire about this bloke is that he had enough sense to see that what was once the market leader here had no future selling cheap computers in Europe and he simply closed it down, moved on and held on to his fortune which he has invested elsewhere, mostly in set top boxes. Funny that people here still think he is a ‘bigwig’ when these days, his only real presence is as Britains answer to Donald Trump on the Apprentice. Yep thats how far the British economy has been downsized, but you never know when Donald hangs up his big wig Michael may be around to take over the role himself. Now that would be irony.
Lenova – the chinese computer maker that took over IBM. That is Dell´s problem.
When you go cheap, the new cheaper manufacturer will beat you.
Dell is now trying to move back upscale.
Dell is not a computer company per se, but a well-oiled marketing distribution machine.
Basic business mottos:
1. Find a need and fill it.
2. Innovate… or die!
Dell loses on both.
Apple wins on both.
It’s happening!
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?
how they run
I think the title of this story is backwards. Dell is a one trick pony while Apple growing faster with more inovative products and better support.
The way the title reads now it sounds like the writer is saying that Apple is growing faster but Dell is the inovator and has better support.
george: ask the same question comparing Lexus and Kia, or Rolex and Timex, or anything you want to save up for compared to the version sold in WalMart, and I think you’ll know the answer.
Dell taught all PC manufacturers how to do it better. They raised the bar on quality, service and lowered the price. They did for computers what Walmart did to retail.
Dell’s problem was inevitable, you can only grow so fast for so long. They are such a big company that the only way to keep the revenue growth rate would be to revolutionize other industries, but they’ve failed at that. Dell has a good display market, but bad MP3 player marketshare.
Don’t discount Dell for being crappy just because they aren’t Apple. Dell weeded out the computer companies with bad policies and a poor buisiness plan and made it easier for consumers. Dell made it a much simpler choice for consumers because there are now fewer choices.
Come next year there will be even fewer choices as Apple encrouches on the PC market even faster with better PPC machines and new Intel machines.
Don’t expect Apple to advertise the Machintosh. These are expensive machines with high margins. Apple doesn’t want to commoditize them. Apple want to keep inventory down, but make it easy to forcast production requirements. That is much harder with triple-digit growth rates.
George Said,
“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?”
Apple sells Operating Systems, software, online services, music & video. All of these are areas of growth for Apple and sources of contiued income after the initial sale of hardware. Dell sells computers. After they have sold you the computer they are done with you until you want to buy another computer.
So the the difference is Apple keeps making money after the sale. Dell makes it and then moves.
Apple
the executioner
Why compare Mercedes with Kia? It’s a no brainer, stupid.
The faltering revenues are why Dell introduced their “hi-end” line of the same cheap components used across the entire board. If anyone actually believes that Dell used better components and a better build process for those new computers of theirs is lacking a brain cell or two. All Dell did was change the case and mark up the price to try and hoodwink consumers into thinking they are buying a high-end product, when in fact they are buying a bunch of junk while lining the pockets of Dell.