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Dell Abandons Its Customization Roots
LiveFreeOrDieInTheGo writes "Dell intends to scale back its build-to-order service model, while increasing sales of prepackaged systems. The goal: $3B USD savings by 2011. The downside: customers expect Dell to build-to-order. The deeper downside: Dell will outsource more production and assembly."
Dell changes its name to "Dull"
I'm a fan of Dell kit, but when HP hae beaten you in sales for 6 successive quarters - as stated in the article - limiting the amount of customizing may save you cash, but it isn't going to get more people buying your kit is it?
The 'fix' doesn't seem to be the solution to the highlighted problem... sure it'll save you money in the short term, but no gains in share there at all. Less customization is never going to make a punter go "oh, I'll buy that because it's not as customizable".
Add to that the outsourcing of manufacture and it all looks like a world of hurt waiting to happen.
*baffled*
When companies seek to recover these kinds of profits, they cut something more important.
Their reputation.
Most likely, they will move their call centers out of India and into a lower paying 3rd world country. The lower techs will be given even less latitude to help fix problems. Along with that, they will reduce access (and numbers) of higher up support, along with "new policies" of the 'not our fault' game.
They will obviously cut their unprofitable programs, such as their IdeaStorms website, all Linux support for low and middle tiers, along with the cheaper customizable options. They will leave customizing available for the higher packages, as all businesses cater to the big spenders.
Yes, our system is based upon a race to the bottom, but depending how you get there means if you survive or not. That really depends on how their deals with Microsoft go, as they are parasites upon MS.
Are you high?
Dell already outsources just about all their manufacturing. All that will happen here is that now they can streamline the supply pipeline because they only ship x different configs instead of 100x. Less work at the (already) outsourced supplier/contract manufacturer, less work on the order fulfillment side.
How it's going to save 3 billion, I don't know. I think they're aiming a little high. Expect support to be outsourced to even crappier Indian call centers....
Be thankful there isn't a deeper deeper downside!
I work for a small (about 100 person) company with a heterogeneous environment (Linux, OS X, Windows). In the past few years the IT team has settled on Dell for quick turnaround of ordering customized systems and consistency (the devil you know). They order Dell laptops, desktops and servers. It has pretty much turned into a "Dell house." The quick turnaround on customized orders is extremely important to meet developer needs. If Dell makes custom ordering take longer or involves increased hassle, I would bet that our IT management would start looking into other vendors.
Dogma - "let's just say we'd like to avoid any empirical entanglements."
Outsourcing lowers the GDP of our country, reducing our buying power. What logically happens is jobs are removed from our country.
Now, tell me how people can afford to buy stuff if they have no job, or one that pays 1/2 as much?
e.g.
1. We will cease customizations through our "Dell Home" program but will continue with it in our "Dell Large Business" program.
2. We will cease customizations for our "Dimension" line but continue customizations for our "Optiplex" and "PowerEdge" lines.
2. We will continue supporting some customizations (e.g. RAM and HD) but cease support for other customizations (e.g. anti-virus software).
3. We will increase the price on customized models and decrease the price on prepackaged models in order to reshape demand.
Ahh...but you see that's 5-15 years down the road. The shareholders (e.g. uber-rich trading firms) all want to meet this years or this QUARTER's financial targets.
You can get rich if you own a politician, but you have to be rich to buy one in the first place.
Ahem.
"Why can't everyone just be straight with me?"
"Because we live in a bendy world, dear."
So, remind me again what I can now get from Dell that I couldn't get from any other manufacturer? Nothing? Oh well then I might just take my business elsewhere. Hrmph!
Remember: The market is steadily moving towards laptops. And laptops are harder to custom-build.
"The deeper downside: Dell will outsource more production and assembly."
Which will result in lower prices which is good for consumers. How is this the deeper downside? Why are Americans, which have one of the highest standards of living in the world, more deserving of these jobs than people in other countries?
Creative Demolition
Well, if you want to talk about 15 years down the road you might as well mention that in 15 years all the demand from our outsourcing will make the Chinese as well off as us, forcing them to charge as much, cancelling out any benefit of outsourcing there.
You're a little capitalist, and you don't even realize it. Want all the jobs to stay in our country? That's greed; the same thing driving those shareholders to make more money. Unfortunately, whining doesn't get much done, so we'll all have to work really hard and offer some kind of advantage to keep the jobs. It's called "competing".
Our system isn't a race to the bottom. It is a race to what people want. People want computers at the cheapest possible price and they do not care about tech centers or even support.
Outsourcing is a good thing for the economy, not a bad thing. If Ford did not outsource, for example, it would have to make everything from the drills for the oil, the refineries for the gasoline, the machines to make the steel and the chips and the plastic, really, recreate the entire economy and in doing so lose the efficiencies that come with shared costs. We can lament outsourcing of some function at a company, to make ourselves feel good, but, if there were no outsourcing, there would be no cars, no tvs, computers, or any of the millions of products, in all their choice and complexity, because those products would not exist without outsourcing.
We ourselves, each and everyone one of us, outsource all of the time. Go ahead can say Dell is terrible because they outsourced a call center to India or the Philippines, but we outsource every time we use a stapler or a printer, or for that matter, even a computer. How many developers recommend using MySql or Postgres or even Linux over some solution developed in-house. That is outsourcing too, and without that outsourcing, it is very likely that there would be less jobs and more economic stagnation. Few products have the margin or merit to justify the creation of a custom database server or operating system solely for them.
In that vein, outsourcing a call center might actually result in -better- customer service. If a place in India has 200,000 people answering the phones, they are going to get the economies of scale that even Dell could not possibly get.
Outsourcing actually -creates- opportunity. Any time you see more than one company engaged in a similar practice, that is an opportunity for a product or a service than can be outsourced to someone else, and that person might as well be you. If outsourcing did not exist, then, there would be no opportunity, the companies that could have benefited from outsourcing would stagnate, and products would remain more expensive, rather than less.
Bottom line is, outsourcing is a good deal, rather than a bad once, and the dramatic increase in the standard of living in much of the world - from the skyscrapers in China, the surge of wealth in India, to the internet of south korea and the massive works in Dubai, the world is getting richer and better off for it. Even in the USA, where outsourcing has been the subject of much debate, everyone has benefited from outsourcing.
This is my sig.
Ah yes, but you see, working for your living instead of getting the money by playing the stock market or owning Dell is so Middle-ages, and people who depend on it should really move on or die off. By removing menial jobs from the country the Big Boys are actually helping people to transition to pure royalties-based industry, and get the money the way it's meant to be had - by sitting in leather armchairs and smoking Cuban cigars while reading the stock market reports, not something as vulgar as working in an office.
(If you don't see Alien-grade sarcasm dripping from the above words, get yourself new glasses.)
-- Sig down
Thats exactly it: nobody with power cares for the long term maluses by strongly pushing outsourcing.
As long as the quarter looks good, its golden. Another question would be this: Why do the uber rich trading firms want to only see short term gains, and not longer term ones?
What financial disadvantage would there be if companies developed new things and technology, and continued further research going ahead up to 30-100 years? Ma Bell did that and we ended up with the transistor, lasers, Unix, C...
They can't. In the words of Marriner Eccles: Guess where we are right now?
We are all just people.
> But I remember all the old Dell commercials - the main thing they had going for them was customization.
I think the point is that those were the old Dell commercials. If you look at ones today, they're all about price. Features and price, admittedly, but price is the biggest thing.
This is a reflection of the market for PCs. When they represented a substantial capital investment, you wanted to tailor them to your particular needs, and avoid paying for anything you didn't absolutely need. That made customization and U.S.-based assembly locations worthwhile. Now, people don't want that as much. The PC, as a unit, has become increasingly commoditized. I bet a lot of buyers today don't even look at specs; they just buy "a computer" and make a lot of assumptions about what they'll be able to do with it. (Assumptions that are actually pretty safe if you don't plan on doing much beyond typical consumerish tasks with it.)
As a result, the goal is no longer "build me a PC to my exact specifications," it's "build me as much PC as possible for $500". Or $300, or $250. I suspect before too long it'll be $99.
That doesn't favor having a lot of assembly points close to consumers; it favors doing all your assembly in a quasi-slave-labor camp somewhere, to better keep costs down, and then shipping tons and tons of identical boxes in bulk to wherever the consumers are. 'Who cares if it's not exactly what you want? It's $500 and it's more power/features/speed than you'll probably need, so just buy it,' is the message.
It's easy to blame Dell here, but it's buyers of technology that are driving it. Not enough people want essentially bespoke computers (or the ones that do aren't buying them from Dell), and Dell is going to eliminate the facilities that provide that service.
"Ladies and gentlemen, my killbot features Lotus Notes and a machine gun. It is the finest available."
My experience is that customizing a Dell always costs an arm and three legs. Upgrading RAM costs twice what it would to buy retail, and please don't tell me that a 320 GB hard drive costs $100 more than a lowly $160 GB model. They make money hand over fist when small/medium business purchase customized machines (I've seen co-workers add on $1000 in not-so-necessary option), but the company has a much harder time with price-sensitive customers. I've purchased three Dells for home use over the past six years, and in each case I waited until they offered an extremely good deal and bought a minimally configured system and added my own memory, second hard drive and video card.
Dell has been losing ground against other manufacturers, and one often sees off-the-shelf machines at Best Buy that offer better value and immediate availability. Part of the reason is that more and more buyers are opting for notebook PCs that are made in China alongside machines from HP, Acer and countless other competitors. In essence, Dell adds an extra layer of complexity to their manufacturing process by allowing customization of these laptops to occur once they arrive in North America. In the meantime, Acer is able to ship preconfigured systems directly to retail outlets without additional expense. The days of the big beige box are coming to an end, and much of Dell's business advantage centered on getting people to buy overpriced (and often unnecessary) upgrades that simply aren't feasible in a notebook form factor.
Outsourcing lowers the GDP of our country
Can you please explain how that is so? Reading countless economics text books about the benefits of division of labor have confused me.
Not a chance; not with the population they have. Maybe in a century, but fifteen years? That's ridiculous. There are millions upon millions of people in China (and India, and quite a few other places) who have grown up and are used to far cheaper standards of living than the average person in the U.S. That translates into dramatically lower labor costs for the foreseeable future, since they're going to be willing to work for less. Someone who remembers life in a mud-and-thatch hut on a rice paddy is probably going to have a markedly different bar for 'success' than someone who grew up in the U.S.'s heyday and expects to be able to do better than that.Well, if you want to talk about 15 years down the road you might as well mention that in 15 years all the demand from our outsourcing will make the Chinese as well off as us, forcing them to charge as much, canceling out any benefit of outsourcing there.
That's a great thought but it's a little lacking in substance. What do you propose the U.S. ought to specialize in? I'm quite honestly interested, and I've asked this question over and over to a lot of fairly intelligent people and have yet to get a satisfactory answer back. I'm not sure there is one. Do we try to go the Neal Stephenson route? Music, movies, microcode, and pizza? Other parts of the world are chipping into 'software' already, and there's no reason to think that we have some kind of automatic, natural, competitive advantage in any of those.You're a little capitalist, and you don't even realize it. Want all the jobs to stay in our country? That's greed; the same thing driving those shareholders to make more money. Unfortunately, whining doesn't get much done, so we'll all have to work really hard and offer some kind of advantage to keep the jobs. It's called "competing".
About the only thing we do have here in the U.S., at least at the moment, is a hell of a consumer market. Until we figure out exactly how we're going to keep ourselves going, I don't think it's necessarily illogical to want to carefully manage access to the one thing of value we have left. I'm not proposing or advocating for complete isolationism, just a careful analysis of exactly who we're allowing access, and to which markets, and what the effects are.
More bluntly, I don't see any reason why the U.S. ought to open any market to foreign competition unless there's a clear indication that opening it results in a net benefit to the United States. Now, it may be that fully-open markets are the best (or least-worst) policy for Americans in general, but I haven't seen any of the politicians pushing for open markets really going out of their way to demonstrate this. And from where I'm sitting, it looks a lot like we're just letting ourselves go bankrupt on imports without much of a thought towards the long-term sustainability of this situation.
Even if by restricting imports it increased the cost of non-essential goods to consumers, but in doing so bought us a few more years or decades of solvency in which to work on our comparative advantage (or for the Chinese and other developing markets to bring their labor force's standards of living, and thus costs, closer to par), I can't see why that would necessarily be bad.
National governments have a mandate to serve the best interests of the people they represent. If free trade and open borders are demonstrably the best path, I'd be more supportive, but right now they look suspiciously like a path that leads off a cliff.
"Ladies and gentlemen, my killbot features Lotus Notes and a machine gun. It is the finest available."
The market is steadily moving towards laptops. And laptops are harder to custom-build.
Not only that; people want to see, touch, and hold laptops before making a purchase decision.
I'll leave the conclusion up to the reader.
---Maybe you're not seeing the long term gains of outsourcing.
I understand all right. It raises the whole world out of poverty by spreading the money where labor is cheap until they're equal with everybody else. That that means for me, my generation, and my children is that it effectively lowers our wages. I dont like that, and I think its fairly easy to see why.
Selling out our ability to create is just a bad idea altogether. It weakens our military and our ability to protect us.
---Maybe you failed to consider all the new factories that the outsourcing companies will have to build to handle the increased load? And what about all the people who will get new, higher paying jobs in those factories? And what about the the standard of living increase those people and their families get because of this? Oh wait, all those people will live in a different country. Racist much?
Smart much? Cause you aren't showing it. It's called nationalism, and yes. I have it. Since our world has no real idea of free travel and migrating citizenship (what Adam Smith believed), we are bound to our country. Because of that, I will attempt to make this country good to live in, and that means having jobs and money abound.
---In that case, maybe you're forgetting the poor people in our country that will be able to afford new computers now? And what about all the money that will be saved by people/companies who buy Dells?
If the poor people worked HERE instead of over there out of our territories, they could afford to buy them now. And pray tell, dont we see what the quality is when we seek the bottom? Or do you think lead is safe for children?
---If nothing else, look at it this way: Now that Dell has fewer employees doing manual labor, they'll be able to hire more people to design new, better machines.
In actuality, they will spend more on advertising, along with paying more to their top execs. The stock prices might go up some.
You should have been looking into alternatives years ago.
Anyone can build and sell a server - supporting it is where the company wins or loses.
I call IBM at 3am when a server up and dies. Tech is onsite in two hours, new parts arrive 45 mins later... a bad power regulator fried all 16 sticks of ram. They didn't have enough on hand, so three other couriers were dispatch from two other states with more than enough ram to get the server up and running.
Three hours later the box was back up.
Dell - will argue to the enth degree about predicted drive failures alarms from their raid controllers... we just call them dead now so they'll send replacements. The drives take about two days to show up which is about enough time for the drive to finally fail.
Can you please explain how that is so? Reading countless economics text books about the benefits of division of labor have confused me. Try at least a little harder than that.
Imagine a widget factory. The factory takes in raw materials, and produces finished widgets. The widgets are sold on the market for some price that exceeds costs, resulting in profit. The workers are paid a salary, which they can use to buy widgets. With the exception of possibly exhausting whatever raw materials are used to create the widgets, you can repeat this wealth-generating cycle forever. (I.e. it's not some sort of closed system, and it's not zero-sum; you're creating wealth by adding value via the raw-materials-to-finished-products process. There are other processes that create wealth, this is just the most obvious.)
Now, we outsource that factory to Somewhere Else, but continue to import the widgets to satisfy domestic demand, perhaps at a lower price. Now, consumers buy their widgets from Somewhere Else, meaning that wealth flows over there. At the same time, all the people who work at the widget factory are unemployed.
Do you start to see a problem here? If you can't find something else for your former widgetmakers to do, you end up just draining money out of your economy. If you have modern finance at your disposal, you can conveniently spend more wealth than you actually have, issuing debt and importing stuff; at least you can until people stop wanting to buy your debt. This isn't sustainable. Eventually you either literally run out of hard currency (the case if you use gold or something else that can't be created), or people decide to stop buying your debt. And then you have a bunch of angry, unemployed ex-widgetmakers who can't afford to buy widgets anymore. Problem.
Of course, there are cute responses to this. You could argue that this is just the way things are supposed to work -- if the widgetmakers couldn't compete, they deserved to go out of business. Fair enough, and that actually makes a certain amount of sense.
But suppose you have an entire nation of widgetmakers? An entire nation of people who have built themselves a nice lifestyle (oh, and by the way, a huge fucking quantity of nuclear weapons) for themselves, making widgets, and suddenly end up unemployed? What do you expect them to do, calmly and rationally reduce their standard of living so that they can compete better on price? I don't think so; not when they have the ability to go and take a lot of wealth via brute force.
"Ladies and gentlemen, my killbot features Lotus Notes and a machine gun. It is the finest available."
Amen to Kadin2048 whoever you are. I work in the computers department of a popular retail store, and what you have said I see and almost have to argue against 40 hours a week with customers when trying to give them a tailored, customized fit for their needs. It is very true that PEOPLE ONLY CARE ABOUT THE PRICE. Instead of "What's the best computer to fit my lifestyle?", a lot of the questions and comments I get are, "What's the best deal on the best computer you got?", or "Why spend over $500 when it's going to be outdated tomorrow?", or "I don't care what it does or doesn't do or what it has or hasn't got, I just like the price." or "Computers are pretty much disposable nowadays anyway. So why pay more?" and etc, etc, etc.
In this non-tech-savvy society that we live in, I can understand that people are hesitant to make a "large" purchase on something they know very little about, i.e., the specs of a computer. However, the biggest obstacle I think computer companies face is the fear consumers have: the fear of their next or first computer purchase being a waste of their money. I think everyone of us has had or know someone who has had a bad experience purchasing a computer. Be it because of the poor customer service we received before our purchase or the product itself after we purchased it. And no doubt no one wants to waste their money, but it happens to everyone of us everyday be it knowingly or unknowingly. Instead consumers rely on a "good brand" second (which there is no such thing by the way. I hear, read, and see negative things about every brand where I work. In fact on more than one occasion, I've even seen Apple computers returned to my store. Believe it or not.) and a "good price" first and foremost, which is any computer within their means. So, I'm not surprised Dell is making this move. Why pay more for a customized option when you can get the same or nearly the same and more for less?
Buying a computer has now become like buying a pair of socks to your everyday consumer. In their mind: Who cares if the more expensive socks are the best fit for my lifestyle? I'll try to stretch and make an eMachines or Compaq Presario pair play video games, stream and download video, photos, and music for my family of 4 or more because it fits my wallet right now before I'll even think about purchasing the Dell pair. Absolutely no fault of Dell's on this move folks, we've got ourselves to blame for this one.
Oh, and by the way, we also sell Dell computers at the retail where I work too. Thank you and have a blessed day.
all you have done is grossly over simplified the whole process and picked out the little bits that suit you. the money doesn't just flow in one direction to the widget makers, the widget makers need people from widget land to show them how to build the factories and train them, they need someone to design and market the widgets for them in the first place. In short the clever widget makers who started the whole industry get to specialise at a different part of the supply chain, and don't have to spend all their time subsidising work that can be done better/cheaper else where.
if your idea's really did work, why does communism and protectionism fail?
If you mod me down, I will become more powerful than you can imagine....
Dell unfortunately is a victim of its own success too. They sold a crapload of computers during the boom years and had phenomenal growth. The problem is that there's no way to sustain that growth. They'd have to sell like 10 billion computers a year. But Wall Street hits them hard when they can't the market's predictions. So they have focus on making more profits. Which means cutting costs by getting cheaper parts, labor, etc. All the while, the margins are shrinking. It's a bad cycle.
Well, there's spam egg sausage and spam, that's not got much spam in it.
Why exactly is that assumption false? We are creating a country of ownership of ideas and not of production. That in of itself is a loss of power if we ever have a military action against those countries of of an ally of them.
This is the time you're supposed to prove me wrong... not show me maps of "not accounting for inflation" pretty graphs. Didn't you even read the comments below the graph, or did you just go "goo goo gaga pretty"? Erik Koht poignantly said that if we were to apply EU standards of living to the USA, 40% are in poverty level.. But even that tells not the whole story.
What I would venture is happening in our country is a ever-widening gulf between those who get paid to do and those who get paid to think. Our idea is we can just outsource it and sweep it under the rig, so to say. We have jobs that routinely get paid 100k+, and then we have 35k jobs. Those are the 2 working parent family households.. Manufacturing traditionally held that role of between intellectual and manual labor that a family could progress to higher socioeconomic ladders if they so chose.
I also have been told stories by the older generation that college could be paid off each year by working 40 hr/wk on summers. No more. Instead, we have corporations that demand we all have college, even traditionally they did not require it. Now, college has turned into a sorts of a new high school in which we pay to learn what once they would train on the job.
Unless we rebuild our nation, starting with our currency, then to manufacturing, and on, I can see us economically dying to countries like China and India that have almost 2 billion between them. Even during the Cold War, the USSR only had 200m civilians. That's a drop in the bucket compared to what China and India can do.. I wonder how high the Chinese could push oil? 200$ a barrel? 300$ a barrel? Or even our worst nightmare of switching OPEC to the Euro?
I'll leave the conclusion up to the reader. You're not going to meet a girlfriend over the Internet?
Hail Eris, full of mischief...
E pluribus sanguinem
That assumes that the people down the supply chain don't decide to take your knowledge and compete with you.
I read an interesting story awhile back about Schwinn bicycles. From what I read, Schwinn had various techniques that they used in assembling their bicycles that made them more reliable. But they were losing sales to cheaper foreign-made bicycles which weren't as reliable but were considerably cheaper.
Well, they moved their assembly to China. They went over and taught Chinese workers their techniques for making making a reliable bicycle. So now they had less expensive bicycles which were just as reliable.
Until the bicycle factory took these techniques and started producing their own bicycles using those techniques and competing against Schwinn.
So even if you "specialize at a different part of the supply chain," the stuff still has to be assembled and whatever unique knowledge you have brought to the product will be taken by your competitors.
The problem is unions and government regulations. Try firing someone. You have a union to deal with. Try building something really innovative, say a nice new nuclear power plant. Your kids will be grown before you get a single hole dug; you'll still be waiting for the next mountain of papers to be filled out and processed.
The Canadian automotive industry died because it has even more regulations and unions than the US. China kills US manufacturing because it has less regulation than the US plants. Can you believe that a US plant has to not only pay property tax but a tool tax on the machines? Ol' Patrick Henry would roll over in his grave.
There are two solutions to this problem:
1. Protective tariffs: historically a bad idea (recall the Civil War).
2. Deregulate and deunionize: historically a good idea (think the Iron Lady salvaging Britain).
Unfortunately, the US is rapidly adopting Hillary's favorite idea: the government can save you! Guess how?
But then, I don't know of any candidates who don't subscribe to that idea. Republicans just aren't what they used to be. It seems the only differences are on social issues. Economically, all the big candidates look the same. It's so frustrating to talk to people who like what Ron Paul says but dismiss him offhand with a sickly smile and say "But he's not electable."
The only way to save our economy is to somehow break through people's thick heads. Unfortunately, we are living a generation that thinks in a herd mentality, usually delivered by rich morons like Oprah.
I only hope the generation now at college (that like Paul so well) will learn something from the current disaster and do something about it.
(Wow, I this post is all over the map. I feel better after just saying it all though.)
The government can't save you.
Alienware is owned by Dell, but that doesn't mean that they act like Dell.
My wife recently bought a nice (though low-end, by Alienware standards) desktop computer from them. Though the ordering screens are similar (as well they should be - Dell's web-based ordering is rather slick), and credit for both companies is through Dell Financial Services, the similarities ends there.
The Alienware case is a regular ATX case, with a regular ATX backplate and regular ATX mounting holes, and is large enough to accept bloody any motherboard, whereas Dell uses a strange-ish quasi-Micro ATX design without a removable backplate. The motherboard itself is an off-the-shelf model (Foxconn, in this case), not some weird Dell special. The front panel connectors (including those for the large number of fancy LEDs) are compatible with regular ATX boards, instead of Dell's non-standard monolithic connector. There's a plethora of drive bays, with all of the hardware needed to use them included, whereas Dell seems to take great joy in including only as much hardware as is needed to assemble that particular system (on the low end of things, at least - Dimension 2350 and 2400 machines have provision to hold a number of 3.5" hard drives, but there's only enough hardware included to mount exactly one. The other bays are physically absent.). The price was very reasonable - about $100 more than equivalent parts from Newegg.
We had weird issues with the Alienware's extra LEDs on day 1. Called tech support, and without waiting in queue got a real human (in America!), who spoke real American English, had a real name, and who actually had at least half a clue. They sent a new part, which didn't fix the problem. Called back, again immediately got a real human, who dispatched both more parts and a warm body to install them. Problem solved.
And, sure, it'd have been better if the system didn't need any service, but I did feel pretty good about the whole process. It seemed that Alienware wanted to solve my problem, instead of just force me to jump through hoops.
Meanwhile, I loathe to call Dell support. One of the hinges on my laptop broke (which was reasonable enough after 2 years of hard use), and I had to wait for 20 minutes before some girl in Bangalore came on the line who only wanted to talk to me about reinstalling Windows XP. I had to fight with her for about 15 more minutes in order to get transferred to someone with enough clue to understand the simple problem and dispatch parts. And this with their premium support package!
So, yeah: They're the same company in that they're owned by the same people. But that heterogeneous ownership doesn't mean that they're at all similar in operation or quality.
Kid-proof tablet..
Yeah, but where does all the food end up. And what's your friend going to spend all that money on, anyway? not food from you, that's for sure, because your friend's cheap food resulted in you abandoning your food-growing efforts.
People forget that money and wealth are not the same thing. This is one of the things that makes economics harder than it looks. You have to take a holistic approach to understanding, and it's extremely easy to get caught up in one aspect and misunderstand its overall effects on public welfare.
Can you be Even More Awesome?!
Profit, remaining the difference between income and costs however, isn't as simple as "reduce costs, increase profit"... you stop selling things, you stop getting the income too.
Speaking as a manager who purchases regularly... Dell's god awful love of non standard components to try and drive customers back to them for upgrades is next to inexcusable. I tolerate it because office machines can be bought to the spec I need without cracking the case. To now be told, "Oh? You need a high end processor and ram but don't care about the rest of the system? Sorry, that only comes in our high end system and you now have to pay for media burners, graphics cards, hard drives and Vista Ultimate that you don't want."... Especially when I can't buy a lower end system and swap out the processor because the old motherboard won't support it and can't swap out the motherboard because the case uses non standard connectors and fan mounts... I'm going to be going straight to the competition.
So, yes, Dell will cut $3B in costs. Part of that will be the costs of all the systems they used to sell to me. Along with the profits on those systems too. Assuming the same holds true for others, they successfully cut off their $4-5B nose to spite their $3B face.
It seems you're advocating deunionization without knowing what it actually means.
Deunionization as an economic measure means that you plan to solve fundamental problems in the economy by worsening the bargaining power of the lower and middle class, in effect worsening their conditions. Instead of outsourcing, this is bringing conditions from China to the developed world. Newsflash: if an industry fails because it cannot survive unless it has unacceptable working conditions, then that is a good thing.
It takes a man to suffer ignorance and smile
Be yourself no matter what they say
All great companies ever created were created by engineers and run by engineers.
While many were, there are a significant number that weren't. Apple for example - Woz certainly is a tech guy but not an engineer and Jobs certainly isn't one.
Many great companies have been driven to destruction by control freak managers with zero ability to know technology.
Understanding technology (in an engineering sense) is not necessarily a requirement to do well at running a tech company; I think understanding technology's impact on people and how it can be used effectively is a more important skill.
I'm a consultant - I convert gibberish into cash-flow.
Oh, and all our companies are close to bankruptcy, and no executives and shareholders ever manage to take out huge bonuses and dividends..
Seriously, unions are why you don't still have 12+ hour working days in the US and most of the rest of the world. It took decades of campaigning, strikes that often were illegal and bloodshed when police struck down on strikers for the US unions to get employers to accept the 8 hour working day.
It's a paradox that the rest of the world can thank US unions for the 8 hour day, when your unions have been reduced to festering corpses, and that May Day was established as an international day for the working class to demonstrate directly in response and support of the US unions, while the US working class was quickly subverted into accepting the watered down Labor day.
A huge part of the improvements in working conditions in the latter half of the 1800's and well into the 1900's were a direct result of strong unions in the US.
More and more virus are showing up in computers and parts coming from China. This includes hard disks, bios, and even in chips (including several ASICs, which indicates a more systemic approach is happening; i.e. it is not just a single hired contractor that was able to slip it in). Somebody who creates a manufacturing line that does not utilize these infected parts would go far with western govs. And if done in an automated fashion, it could be much lower cost than what is coming from China.
I suspect that said company could even take over companies like HP and Dell by focusing on Customer Service, in addition, to having lower costs and a SECURED system.
I prefer the "u" in honour as it seems to be missing these days.
In the end, the strength of an economy depends on supply and demand, if the US wants plenty from China but China wants nothing from the US the economy will falter. Imagine as an extreme example that the US was full of hairdressers and China was full of widget makers. The borders are closed so no tourism or working abroad. Selling off ptoperty would be a short-term solution and so ignored. The hairdressers can cut each other's hair creating value internally, but if they want widgets from China they have nothing to offer. There's no supply chain because there's no incentive to supply in the first place. If there were a flow, part of the value would remain in the country but it'd still be a net transfer of value out. The whole theory of comparative advantage assumes there's something both parties want in infinite amount. If China were to say "US goods/services/whatever? Well, actually we're covering domestic demand already so there's nothing we need really..." the US is screwed. Or it can take on debt, which means it's screwed somewhat later.
I see it in my own country, we have oil and so our economy is strong because the world wants oil. Everything else has problems because the input costs are so high, it's difficult to be competitive at anything. In the real-world economy with uncertainty it'll easily happen that in the market you think you'd make money there's overproduction and so your head is first on the block because your costs are the highest. If you do find stable demand, there's always someone out there with an eye to undercut you. In practise, it doesn't work nearly as nicely as in theory.
Live today, because you never know what tomorrow brings
Bullhockey. Niche builders like {pre-Dell} Alienware do well. You work in the computer department of a retail store. You're getting the bargain basement shoppers. They're the ones buying up eMachines at a frantic pace and wonder why it doesn't last/work for a darn. To use the vaunted /. car analogy, sure you had a lot of people buying Yugos SOLELY because of the price, because they didn't know any better. Once the maintenance/safety/reliability record became known, however, people were willing to spend a few more bucks to get a more robust vehicle...
It did take getting burned once for a number of people first, didn't it?
What you don't see is the flip side; the folks that know what they want. Last week, anecdotally speaking, we had a client that wanted a machine for hard-core number-crunching. I spec'd it out, and when she came in we discussed what she was getting and why. When it came time to give her the price, she cut me short and said simply, "When can you have it ready?"
Just because you work at a Yugo dealership, and all you see are people buying Yugos, it does NOT follow that everyone wants a Yugo.
Don't tell me to get a life. I'm a gamer; I have LOTS of lives!