Documents show beleaguered Dell was aware of bad components in millions of faulty PCs they peddled

MacBook Pro“After the math department at the University of Texas noticed some of its Dell computers failing, Dell examined the machines. The company came up with an unusual reason for the computers’ demise: the school had overtaxed the machines by making them perform difficult math calculations,” Ashlee Vance reports for The New York Times.

“Dell, however, had actually sent the university, in Austin, desktop PCs riddled with faulty electrical components that were leaking chemicals and causing the malfunctions,” Vance reports. “Dell sold millions of these computers from 2003 to 2005 to major companies like Wal-Mart and Wells Fargo, institutions like the Mayo Clinic and small businesses.”

MacDailyNews Take: Hey, who needs quality computing at the Mayo Clinic? (dripping sarcasm)

Vance reports, “Documents recently unsealed in a three-year-old lawsuit against Dell show that the company’s employees were actually aware that the computers were likely to break. Still, the employees tried to play down the problem to customers and allowed customers to rely on trouble-prone machines, putting their businesses at risk.”

MacDailyNews Take: Wonder if any of those POS Dells that Dell employees knew were faulty ever put anyone’s life at risk?

Vance reports, “Even the firm defending Dell in the lawsuit was affected when Dell balked at fixing 1,000 suspect computers, according to e-mail messages revealed in the dispute.”

MacDailyNews Take: You cut enough corners, you end up like Dell.

Vance reports, “For the last seven years, the company has been plagued by serious problems, including misreading the desires of its customers, poor customer service, suspect product quality and improper accounting. Dell has tried to put those problems behind it. In 2005, it announced it was taking a $300 million charge related, in part, to fixing and replacing the troubled computers. Dell set aside $100 million this month to handle a potential settlement with the Securities and Exchange Commission over a five-year-old investigation into its books, which will most likely result in federal accusations of fraud and misconduct against the company’s founder, Michael S. Dell.”

“A study by Dell found that OptiPlex computers affected by the bad capacitors were expected to cause problems up to 97 percent of the time over a three-year period, according to the lawsuit,” Vance reports. “In other documents about how to handle questions around the faulty OptiPlex systems, Dell salespeople were told, ‘Don’t bring this to customer’s attention proactively’ and ‘Emphasize uncertainty.'”

Vance reports, “In 2007, Dell restated its earnings for 2003 to 2006, as well as the first quarter of 2007, and lowered its sales and net income totals for that period. An audit revealed that Dell employees had manipulated financial results to meet growth targets.”

Read more in the full article here.

MacDailyNews Take: SIDAGTMBTTS.

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

43 Comments

  1. For all those posting, “Apple had the same problem” you seem to be missing the point. Yes this was a widespread issue, but Apple and others acknowledgedmit and made the necessary repairs. Dell attempted to cover it up even going so far as to instruct their support people to try and avoid revealing they knew of the problem.

    That is the issue.

  2. Honestly, was this a surprise to any of us? It was a bit of a surprise to see a NY Times article about it, but the information itself… old news to most folks.

  3. No one is disputing that Apple was plagued by the same problem. What’s at issue here is how it was handled by DELL. During that time period DELL chose to duck the issue, which is no surprise considering their build quality. Apple was always lambasted for their higher price but their build quality and customer service was always superior to DELL and most of the rest of the PC industry. The majority of Apples products. particularly the laptops came with a 1 year warranty. DELL’s warranty was usually 90 days max and you could extend it for a significant fee. DELL engaged in a number of shady practices over the years . Just Google DELL, attorney general and you’ll see the number of run ins that DELL has had with various state’s attorney generals.

  4. @ken1w

    Oh, you mean the WD20EARS drive, like the one I just got from them that failed after 10 hours of usage (with a whole lot of data on it)?

    Yes, I’m stupid to trust a new drive with important data. But, buying it from Dell, it’s unsurprising.

  5. Dell has deservedly slid into irrelevancy and will not be missed. I chide myself for giving in to the temptation to post about it in response to this article.

  6. I have dealt with hundreds of the affected Dell machines over the years, and what angered me the most was that Dell was sending out replacement system boards with EXACTLY THE SAME FUCKING CHINESE SHIT-FOR-CAPACITORS ALL OVER THEM for a very long time. It’s just awesome to repair hundreds of PCs with parts that fail not just once, but two or three or even four times! Eventually, they started replacing the suspect capacitors with those of a different manufacture. Needless to say, we no longer do business with Dell.

  7. That would make me upset too. At least with any of the companies I worked with, the caps were replaced with a different brand and they did not fail after that. When you looked at the original motherboard and the replacement you could tell the replacement caps looked like higher quality parts, not that I would know one by sight, it just seemed that way and was true.

  8. The way that Apple handled this situation was beyond belief….

    I originally purchased an iMac in the States and used it for over 2 year with no problems. I then brought it to Europe and used it with a 230v to 110v transformer, since the original power supply was not auto-sensing and would only work with 110v and not the 230v where I was located. I started experiencing problems with random shutdowns of my machine. Apple had a third-party replace the power supply (free of charge) with an auto-sensing power supply since the original power supply had the ‘faulty capacitor’ issue.

    The machine worked perfectly for about 6 months and then it again began to show random shutdowns. Once again, Apple had a third party replace the motherboard (no charge, and well beyond the warranty period). The system behaved normally for about 6 months and then again started acting strange.

    Long story shorty, Apple Europe decided that my machine should be replaced with a new machine (a machine that I used for close to 3 years and was way beyond any reasonable warranty period). Since my machine was no longer available, they sent me the latest iMac which was being produced at that time (based on screen size). They sent me this machine by local delivery with a return carton to be used to send back the old machine once I (repeat I) was comfortable that my files had been transferred over to the new machine, and that I was comfortable with the operation of the new machine. There were no harassing calls or contacts to send the old machine back. After I was happy, a simple phone call was made and a delivery service came to pick up the old machine. Only after the machine was returned did I ever get any follow-up from Apple… solely to ask if I was satisfied with the support and service which I had been provided.

    I don’t know a SINGLE other company which would have gone to the lengths they did to guarantee my satisfaction…..

    Now please don’t get me started with the unbelievable service related to my son’s 4 year old iPod or my 3 year old MacBook Pro…. (all without Apple’s extended warranty)

  9. I am on my third iphone 3g. I was amazed to find out that they did the warranty work in-store. Both times the phone was broken it took less than a half an hour to receive a new phone, this compared to mailing the phone off in hopes that it might be under warranty, apple cares about its customers. that is why they are surpassing microsoft

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