Why beleaguered Dell is doomed

Black Friday/Cyber Monday Apple Blowout“Saturday’s Wall Street Journal contained an interesting, yet frustrating article about Dell. It appears that the company is re-organizing (once again) and is creating a new mobile-devices division headed by Ron Garriques, the former head of mobile devices at Motorola,” Bob Faulkner reports for Minyanville.

“While I’m glad to see the change take place, what remains so frustrating is the glacial-like speed in which the company moves,” Faulkner writes. “Dell makes turtles look like world-class sprinters.”

“Garriques has been at Dell for nearly two years (since February 2007). That was one month after Apple rocked the world with the introduction of the first iPhone. Several months later, Michael Dell could see consumers lining up at retailers, sometimes days in advance, to be one of the first to acquire a new iPhone,” Faulkner reports. “So what was Dell doing in response? Nothing!”

Faulkner reports, “”[Finally], the company launched two Android-based smartphones last month: one in China with China Mobile and the second in Brazil with America Movil. Despite the fact that China Mobile is the world’s largest cellular provider, Dell’s Mini 3i is one of several Android-based smartphones vying for attention on the network. What’s to differentiate? Nothing!”

“Dell would appear to be planning to use its scale to compete on price,” Faulkner writes. “However, competitors such as LG and Samsung have more than enough scale on their own and are vertically integrated in some components that Dell must purchase. So much for that strategy.”

“The decision to enter a market after it has taken off is a risk adverse strategy that appears to dominate the thought process in Round Rock, Texas, and that’s troubling… Any expectations that “Dell is back” should be expunged from the thought processes. The scenery only changes for the lead dog and Dell has demonstrated once again that it’s not leading anything.”

Full article here.

MacDailyNews Take: SIDAGTMBTTS before there’s nothing left to give.

Oh, by the way:
Apple now worth sextuple Dell’s market value – October 20, 2009
Apple now worth quintuple Dell’s market value – February 12, 2009
Apple now worth quadruple Dell’s market value – May 01, 2008
Apple now worth triple Dell’s market value – December 06, 2007
Apple now worth double Dell’s market value – July 27, 2007
Apple now worth more than Dell – January 13, 2006

44 Comments

  1. If you’ll recall, Dell was right on top of this whole thing. Remember, they hired noted expert / industry analyst / pundit / generally incredibly brilliant guy Rob Enderle to consult with them on what their new Dell phone should look like.

    So, while the WSJ claims that Dell did nothing, he’s clearly wrong. By hiring Enderle, Dell didn’t just stand still. They actively handicapped themselves. They dug a hole, climbed in, then kept digging. Way to go!

  2. gives steve a stiffy

    apple should just team up with goldsacks and short this bitch to ZERO!!!!!

    turn that 30 billion into 90 billion on dells back

    it would be more but you have to give GS major kick backs to make it happen

    come on Apple short dell!!!!!!

  3. Apple doesn’t actually move faster, but they are anticipating or creating new trends much earlier.

    Apple probably needs at least as long to bring their products to market (tablet, anyone?), but they’re already on the next future track when the others are still fully possessed by the past.

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  4. Dell has optimized the heck out of their operations to the point they have zero innovation. Yes, they’re basically an assembler … but competing solely on price is a dangerous game, and they’re losing.

    BTW, I have a friend who went to high school with Michael Dell in Texas. He asked her out but she thought he was a “dork” (her words). She jokes that she should have taken him more seriously… but I thinks he’s out to prove her right after all these years.

  5. The current generation of brilliant baby boomer employees at the “mot” wireless (Plantation and Libertyville) division have destroyed one of the most successful microelectronics companies of all time. This guy is going to bury Dell. Good riddance Mikey!

    just my $0.02

  6. Why is Dell creating a mobile division, anyway?

    My guess is they will use this newly formed division as a launch pad for a newly focused Dell.

    In the mobile space race, they wouldn’t have to compete with Apple to be successful, they could place third and still make a boatload of money. Before that can happen though, two things must occur.

    First, they need a smartphone. Any phone will do, even a rebranded one would be good enough to compete. But, they have to focus their energy, time and money, in developing a synergy using the best mobile products they have to offer, including laptops et. al.

    Secondly, they need to get out of the desktop PC space altogether.

    Their current business model created a consumer desktop PC market that is no longer sustainable. They passed the point of diminished returns in a race to the bottom over price years ago, as evidenced by the fact that their customer service is overwhelmed by the sheer volume of questions, complaints, and returns of both good and defective merchandise.

    Dell can no longer pretend its sales force isn’t choking the life out of the company.

    They should shut down the PC division or sell it off and use the capital to reinvent themselves.

  7. Dell’s only worth is in keeping UPS guys busy.

    @G4Dualie:

    How would Dell getting into the smartphone race be any different from their PC business?

    Since they’re new to the smartphone business, how could they hope to compete against the likes of Nokia or Motorola or even Palm, who all have long track records in the phone/smartphone space?

    Dell’s only innovation was in their customized computer assembly and shipping systems, which really did change those aspects of many industries, Apple included. Otherwise, their products’ only truly compelling feature has been low price. Sony, Toshiba and HP (and now I suppose Asus) beat them everywhere else.

    So, how does a glorified shipping company ever hope to compete with companies where packaging and shipping are the LAST items on the list?

    The day Dell closes it’s doors will be a day that EVERY seasoned Mac user rejoices!

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