Biting words on Apple come back to haunt Dell

“Michael Dell offered up some harsh advice a decade ago on how to fix struggling Apple Computer, words that now provide an ironic sting for the newly minted CEO of his own slumping company. ‘What would I do? I’d shut it down and give the money back to the shareholders,’ he said at a technology conference in the fall of 1997,” Rachel Beck reports for Associated Press.

Beck reports, “Of course, Apple’s investors and Chief Executive Steve Jobs have gotten the last laugh. Back then, Jobs had just returned to lead the company he had founded, beginning what would become an exceptional transformation. Dell, on the other hand, has watched its business go the other way, and Michael Dell has been recalled to the helm to get it back on track.”

“His successor — and now predecessor — Kevin Rollins had a tough run. Under his tenure, the Round Rock, Texas-based company faced a string of disappointing earnings, while its market share slipped — it lost its No. 1 position in the PC industry to Palo Alto-based Hewlett-Packard last year,” Beck reports.

“Dell also faces an ongoing federal accounting probe and was just named in a class-action lawsuit that alleges its profits were inflated by secret payments of about $1 billion a year from chip maker Intel,” Beck reports. “Since topping $50 a share at the height of the dot-com boom, its stock hasn’t rallied as high since and today trades below $24.”

Beck reports, “With Apple on the upswing, and Dell certainly not, maybe it is time for Jobs to return the favor and give Michael Dell some advice. Chances are it won’t be something he would want to hear.”

Full article here.

[Thanks to MacDailyNews Reader “Dion” for the heads up.]

MacDailyNews Take: On November 10, 1997, Apple’s then-interim CEO Steve Jobs, in response to Dell’s harsh advice spoke in front of an image of Michael Dell’s bulls-eye covered face and stated, “We’re coming after you, you’re in our sights.” He wasn’t kidding.

Dell is a dime-a-dozen PC box assembler. They offer nothing unique or innovative and their price advantage evaporated some time ago. If the company disappeared this afternoon, nobody outside of Dell employees and shareholders would care.

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Fortune: Michael Dell reiterates he’d love to sell Apple’s Mac OS X if only Jobs would license – January 22, 2007
Total eclipse of Michael Dell goes off as predicted – January 10, 2007
SEC starts formal probe of beleaguered Dell – November 16, 2006
Apple does it again: New Macbook Pros much cheaper than Dell – October 25, 2006
Dell feels the heat from Apple – October 04, 2006
The Motley Fool: ‘Intel to Dell: you guys stink’ – September 28, 2006
Beleaguered Dell’s OS-limited PC sales ‘declining rapidly below expectations’ – analyst – September 21, 2006
Fortune compares Mac vs. Dell: ‘you’ll get more for your money with Apple’ – September 11, 2006
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AP: Time to think different, Apple Mac beats Dell on price, software compatibility, and more – August 23, 2006
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InformationWeek: Apple Mac run Mac OS X, Windows, and Linux; Dell and HP should be concerned – May 01, 2006
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  1. Qka:
    Not from Texas, I can blame the typo on Oakland public schools and the early morning state of mind. I know my spelling is bad because quite often the spell checker can’t figure out what I am writing.

  2. What I love is that this really points out the lack of forwarding thinking of Michael Dell. Hiring ultra-cheap labor and having a build-to-order foreign assembly line is all he has as a claim to fame. No actual product development, as the products have all been same-as-same-as – always taking queues from Apple as to what to copy (like everyone else). Their half-ass attempts at offering alternative operating systems have been just that, with no promotion or education around why folks should opt out of the 150+ extra for a Windows (pro/consumer/whatever) and save some money in the short and long term (don’t need to buy all the extra security software for life that Windows requires, infinite tech-support, etc.).

    Frankly, all and all, I see Michael Dell as someone who built and sold a lot of widgets. It could have been anything, nuts, bolts, etc. No product development, no class. They even fired that actor who played “Dell Dude” because he was caught with some pot. Real forward thinking, the folks at Dell are, get ready for them to swap over to selling something else soon, like brake pads, when people demand more than imitation with a second-rate OS.

  3. Dell is doomed. They are box shifters and nothing more. HP makes profits from the ink and toner it makes for its printers. Dell has no “unfair advantage” as the economists like to call it. Dell’s competitors have over the years been forced to copy Dell’s cost squeezing ways and now Dell is left with no way to really distinguish itself.

    The only thing that stops Dell’s stock from collapsing now is that the corrupt Wall Street firms manipulate the market so as to get their institutional customers out of Dell without driving the price down to salvage value levels. These crooks keep touting Dell to sucker the small investors to take the giant losses that Dell will face once the Wall Street crooks — particularly, the hedge funds — escape their positions in DELL. Then, it’s game over Michael, game over.

  4. Dell needs to merge with Wal-Mart, and have their products prominently featured in the electronics section. Right next to the $29 DVD players and the bargain video shelf.

    Give Mike a seat on WM’s board, at least a senior VP. Both cultures of unsustainable growth-via-price-cuts should mix very well.

  5. @Linux Guy

    I am interested in your comment about wall street firms touting Dell. Do you have any examples of this? Its not that i don’t believe you, but it would make for a far more interesting post if you could give examples, with links if possible.

    It seems to me that there is not much “blue sky” for Dell. Except that they could be the target for a takeover if the share price falls. Lenovo might buy them for their corporate market share.

  6. It is always unfortunate when a company of this size starts to flounder. Despite one person’s opinion above, the tax base in Austin is supported by the taxes paid by the employees and suppliers. It should not be supported by also taxing the company. That is an extra burden that negatively affect even the largest of American companies.

    Even though I have no love of Dell computers, that is largely because they are tied to a crappy OS and not because it is such a terrible thing that are a commodity box maker. Heck, we buy commodities all the time and we all benefit because they are commodities. Let’s hope that Dell can pick itself up and improve its product. Good products will never go out of style.

  7. Dell is a PC assembler that basically only designs and manufactures their own cases. While Apple does not manufacturer all their hardware, they design both hardware and software. Its actually not fair to compare Dell to Apple, Apple creates far more value. Dell hands down does less and never anything new. Not ideal and not cool, but they are still filthy rich while doing so much less – satisfying what people need (but not desire.)

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