To make up for my NFP rant, I am going to radically switch gears and pay a compliment:
I give Dell a lot of crap for all the things they do wrong: Customer service, crapware, default installs. My Dell 3100-cn printer has been nagging me to replace the toner for 6 months now — and it prints just fine.
For a change, let me give them credit for something they are doing right.
The new commercial (Dell for You) is a smart pitch to consumers. Given that the majority of their sales are to corporate customers, we can certainly argue whether Dell even wants to appeal to individuals, and small/home offices. I assume that given their corporate penetration, they have more room for growth in the individual market. They simply don’t want to let HP get a toehold in any market that might lead to the corporate side.
Anyway, this is a pretty decent appeal to the average PC buyer. Not as clever or amusing as Apple’s ads, but certainly one of the better outings by Dell.
Incidentally, the song in the commercial is Catch My Disease by Ben Lee. You can see the full commercials here. It is an ear worm — a musical virus — and it definitely gets in your head. As much as I like Jazz, Funk, Blues and Rock, I have to admit I’m a sucker for hook-laden melodic pop (how can you not love the toy piano riff?).
Its worth comparing Dell’s musical approach with that of Apple. The latter has broken acts — certainly introduced them to a much wider audience — with their iPod commercials. Dell’s approach instead was to use music that fit into the theme of the commercial. They went back to the early 2005 release Awake is the New Sleep. The song’s first line — "my head is a box filled with nothing" — plays right into the "Built for only one — Purely you" theme.
I have no position in Dell, but since I bust on them so much, I thought it was only fair to praise a nicely done advert.
Incidentally, the video for the song on You Tube below.
If they spent more than $100 on that they got ripped off . . .
Now wasn’t that easy? Do you still feel ok after saying something decent about Dell?
They are addressing much of their issues. Bolder on design. Going after the “cool” with Alienware acquisition. Scaling back the debacle of offshore call centers with native tongued support. Addressing customer service in general. Addressing their shortcomings with admissions in their messages. Touting their support including the ability to log onto your PC to help you fix problems remotely. Nothing new in any of these but a refocusing seems to be taking place.
They still have a long way to go but they’ve got $10 billion in cash, no debt and the status of the second largest hardware manufacturer on the globe to get there.
The stock on was a buy on the reactonary low of $18sih IMO. I wouldn’t buy it here. A retest or failure at $18 is likely IMO.
Time to hit the links and enjoy a long weekend. Don’t work too much.
Speaking as an ancient 35 year old, I watched that video. Kids are so freaking harmless and well-behaved nowadays.
Dell’s foray into the high-end PC world looks to be a problem. I bought an Alienware laptop and it is a pig. I got it with all the bells and whistles: AMD Dual Core, 2 Gigs of Ram, Nvidia Quadro video, 2 SATA drives in Raid 0. I got it for video editing and number crunching. Paid extra for same day onsite service for three years. The first week I had it, I had a problem. A cooling fan went out. They would not come out to fix it. I had to send it in. It took three weeks to get it back. Now the drives are going bad. System files got corrupted. I called tech support and they tried to walk me through the process. I ended up having to coach the tech support guy. He didn’t even know how to type in the right instructions from the Restore Console! After an all night of restoring the backup to a three year old HP laptop, I tried to call Alienware support again. Again I had to correct the tech support rep. When I asked to speak with a supervisor I was told no one else could help me! I need to send it back again! Looks like DELL and Alienware are a perfect fit. No ad is going to help. BE FOREWARNED! Alienware’s support is even worse than DELL’s!!
Mine too!!!
I’m not associated with mwave.com and hope not to spur too much other “spam” like this post. But, I feel inclined to share that that I’ve bought most of my computer hardware through that website (mwave.com) over the past 10 years. They’ve been consistently cheaper on most items by about 10-20%, provided you buy whitebox or private label items. I also like picking individual highly-rated components (after looking at a site like Tom’s Hardware for rating) and then combining those into the PC, instead of relying on Dell’s or HP’s component selection.
I didn’t buy my laptop from them though. CircuitCity had some pretty good clearance items at the time I was looking for my last one. So…
What a great day!
The market is great, gas prices are down, BBQ weekend, unemployment is great, mild huricanes…
Life couldn’t be better!…Let’s keep on buying ’em.
There was an interesting article on Dell and how they are getting crushed in the laptop markets. We build our own desktops and servers using Debian Linux for the servers, and dual-boot WinXP/Linux for the desktops. But I don’t want to get into the laptop construction business, so I buy mine from the store too. I’ve purchased 4 HPs, a MacBook Pro (Intel) and the Alienware. Every computer has problems sometime or another, although the HPs have been extraordinarily reliable. Only one gives me unfixable fits.
At any rate (sorry for the rant), the crux of the article was that people buy are willing to buy desktops over the phone, but laptops are a different animal. People want to hold them first. Until I read that article, I didn’t realize how true it is. Dell may have good ads, but they are going to have a very difficult time persuading people to buy laptops. On the other hand, if MSFT ever delivers Vista, they may get a corporate desktop pop.
Dell should have partnered with AMD two years ago when AMD had the best chips.
I question the timing of developing a relationship with AMD now that Intel has the best chips and AMD won’t match them for at least a year. If this warming up to AMD reduces Dell’s chip allocation from Intel it’s a boner move since Conroes and Meroms (Core 2 Duos) are in very short supply.
Dell needs an edge over Hewlett and getting the best allocations from Intel going into this winter would be a real coup.
Does Dell still get the love from Intel?
I think Dell is a WalMart of computers. The business model is that of WalMart.
They have practically no R&D. They do not make any advanced desktops or servers.
What they do is just ordering boats of cheap chineese computers with Dell label on it. They have very little understanding of what’s inside, they are same users as we are, so asking them for tech support is just like asking your friends for tech support. Or asking a WalMart guys to fix your TV. What do they know about TVs?
Both HP and IBM have totally different business model. They are actually designing and making stuff. That doesn’t mean that they design better than chineese do, but at least they know what they sell.
“the crux of the article was that people buy are willing to buy desktops over the phone, but laptops are a different animal. People want to hold them first.”
Good point. Dell does suffer from not having their laptops in stores for people to check out.
I’m interested in getting an HPQ laptop, and I’ll probably order a customized one from their website instead of buying one of the pre-configured models the stores carry, but I’ve already checked out the model that interests me at the local stores to make sure I like the keyboard and screen, etc…
bob – I don’t care if Dell has R&D, they shouldn’t need a lot of R&D, they aren’t reinventing the wheel or shouldn’t be… that’s for their suppliers to do for them.
:::::
What Dell needs to do is develop solid product configurations from existing technology, build it fast & service them well. They do (1) plenty well enough, (2) great but (3) not so well.
I’m a small biz guy, home office w/ dog underfoot & Dell works for me fine. I generally need a lot of horse power to operate CAD & graphics systems but nothing terribly cuttin edge and some the networking but nothing ‘ERP-like’… say of a real corp.
Plus I need part of it ‘mobile’ as I’m on the road alot.
Dell’s offering is perfect. I configure to my taste & they mostly support me. Mostly.
If they were smart they would have sample systems out and about in some sort of store front venue for people to try BUT then order there online or later & have it delivered FAST. Make to order in minutes, load software, test & ship. On your doorstep in a few days.
Then use the storefronts as portals to ‘manage’ service calls if needed and to massage customers for future business – sort of like the Apple does – similar to how Gateway did it a few years ago only do it well & not corny (Gateway had a good idea just a sucky implementation).
I used to buy Gateway’s EXACTLY for that reason – I could get emergency support face-to-face in every city in the US as needed. I didn’t use it a lot but it was there. I wish Dell had the same thing, I’d even pay extra to get it.
I could be an addition source of revenue if done properly.
Dell is like Home Depot, they aren’t coming back anytime soon.
per dryfly:
“What Dell needs to do is develop solid product configurations from existing technology, build it fast & service them well. They do (1) plenty well enough, (2) great but (3) not so well.”
I agree about what they need to do, but would say that they’ve never done any of it especially well. As it stands now, even as a corporate customer, you will likely wind up with a) something that fails 20% out of the box b) comes in 5 days late and c) has no meaningful real time support.
Ten years ago, any decent consumer computer vendor put its product thru a 24-hr burn test before shipping. That quaint notion went away about 6 years ago which is why Best Buy sells extended warranties based on the idea that what you are buying has a good chance of failing.
Now Dell ships out 64bit, dual/quad processor systems to coporate customers that don’t have any burn-in either as far as I know. The fact that Corporate Amerika will accept that kind of shoddiness just goes back to the basic notion that corporate management is broken.
There’s no engineering in a pc. It’s all assembly today. Half the geeks on this board, myself included, could build their own. IBM doesn’t make PCs anymore. The Chinese company that bought IBM’s PC business just moved engineering to China. It’s more important to hire the industrial designers from Pratt or someplace to design the package to be visually appealing. Something which unbelievably no one other than the Japanese and Apple seem to understand. We need a few “hip” people in the senior management positions if these B-to-B companies are going to sell to consumers.
The PC game is one of assembly, logistics, purchasing, marketing and post sale support. Quite frankly, if it weren’t for the intellectual capital of a superior supply chain, Dell could and should outsource their entire manufacturing. It’s no different than building a TV. Btw, do people do 24 hour burn ins on TVs? There are, what, fifty million PCs sold annually? You want to burn in 50 million units for 24 hours at what cost? Burn-ins on standard off the shelf componentry is not necessary. The QA process has taken place at the component manufacturer and all you need to do is make sure you hooked wire A up to wire B properly.
There’s a dozen manufacturerers of every component in a PC and all Dell, HP and others did was buy the parts and slap them together. The motherboards already come manufactured from Intel or some other compatible manufacturer. Dell assembles and so does HP and others. Dell actually outsources their laptop design work as I understand it. Who cares? This is NOT a sign of American technology dominance. Building PCs is like building a sweeper. The value is in the supply chain, logistics and efficient manufacturing processes.
Yes, there’s QA and some minor engineering, much of it outsourced to mostly Taiwanese companies but the engineering is in jamming data through processors at ever increasing speads, or dealing with increasing problems of heat, or designing the manufacturing gear to drop a king size sheet of LCDs onto a substrate with extremely high yields or figuring how to design the head on a disk drive which is equivalent to a 747 flying ten feet off the ground at 500mph or or or or. ie, It’s Intel, Sony, Seagate, Hitachi, NVidia, Applied Materials and others that are doing the engineering.
That’s is why Dell kicked IBM’s ass right out the door in PCs. IBM was in this antiquated model of overly engineering a product that didn’t need it and the prices reflected it. And their supply chain sucked.
If you have problems with disk drives, DVD drives, batteries, LCDs or anything else, all PC manufacturers will likely have a similar problem because they are all buying from the same suppliers.
A few Dell comments:
1) a couple years ago they had 30% of the US consumer market; I don’t know what it is today but it has not fallen much if any.
2) They really are the computer version of Walmart
3) Their lack of R&D really does hurt – by focusing only on supply chain and cost improvements, they have entirely outsourced the construction and development of the entire laptop to Malaysia. The companies which develop the laptops for Dell also develop them for all the other manufacturers so Dell no longer enjoys the cost compression over the competition that they used to.
4) They have NOT brought consumer customer support back from overseas, nor are they likely to. They persist in making it difficult to get consumer support through their phone tree and chat programs.
5) From a people perspective, they have some very questionable leadership in key areas at the company, have been experiencing an enormouse level of attrition in the past year, and offer little in the way of career growth to current and potential employees.
In the face of a slowing world wide market and an inability to maintain significantly lower costs than rivals and issues #3-5 above, I would have to rate the stock a sell.
For laptops, engineering does matter. The casing has to be tough and durable and the components virtually failsafe. While this doesn’t require electronic engineering, it does require high quality work from the industrial designers. HP leads in this area, with a number of laptops that have high performance at reasonable weight.
My first laptop and desktops were Dells. They were great in 1999.
No more. I have seen a few people with them. I call them Yugos.
When I went back to look at laptop technology last year (having not needed one for a few years), I checked out Dell first. The models are either underpowered or so heavy as to not be truly mobile.
As for desktops, just go to a local builder who’ll slap one together cheap and provide face to face service if needed.
“My head is a box filled with nothing”
Its catchy alright. But it does glamorize stoopid. And we’re getting to be a superpower in stoopid. Not for me this dumb and dumber path. I’ll take Dylan and Neil Young. Thank You.
I hope you don’t mind my dropping a (hopefully relevant) link here.
I’ve noticed more and more that advertisements are turning to new artists to help reinvigorate brands. I’ve written about how ad-agencies are proxying as A&R for our culture, etc.
http://www.jeremiahjacobs.com/blog/archives/000211.html
This story seems to bolster what I’ve been observing in the industry.