Michael Dell Dismisses Tablet Threat To the PC Market

alphadogg writes with an excerpt from a Network World article: "The PC is not likely to be challenged by the tablet or the smartphone, and many users of the Internet on these devices will turn to the PC for a better experience, Michael Dell said in Bangalore on Monday. If you were going off to college and could only have one device, you would choose the PC over a smartphone or a tablet, said Dell, whose company also sells smartphones. 'If you could have two devices, then you would probably choose the phone before the tablet,' the Dell CEO added."

Comments

Also, if you owned Apple

[Anonymous Coward]

You would probably want to shut it down and return the money to the stock holders.

Re:Also, if you owned Apple

[Anonymous Coward]

And being average is why his company is now sinking.

Re:Also, if you owned Apple

[hairyfeet]

Not to mention how many CEOs had Bill Gates' home number and could call and say "Bill give me a hand" and actually have him do it? Oh Gates wasn't doing it to be nice for sure, he knew if Apple went tits up that antitrust was gonna rip him a new asshole, but despite the fact Apple guys HATE to admit this Gates really helped to calm the market and get developers back on board with Apple. Remember at that time the investors were shitting kittens and the stock was doing lousy thanks to all those "Is this the death of Apple?" stories being run at the time but when Gates showed up and said to the effect 'We believe Apple has a bright future so we are gonna invest in their stock and make sure Microsoft software is available to the Mac" a LOT of developers and investors said "Hey, if Gates thinks there is money to be made there maybe there is!". Of course the money was a pittance compared to what Apple had but it was the act that helped to calm the panicked market.

As for TFA? anybody that says the tablet is gonna wipe out the PC has been slurping too much koolaid, it would be like saying 'This new moped will wipe out the trucking industry!" and is just as dumb. Wanna know why PC sales have slowed? Its because PCs have passed "good enough" several miles back and the simple fact is they are now insanely overpowered compared to most of the jobs folks have. I got rid of my full size laptop for a $350 AMD E-350 netbook, why? Because the full size was frankly overkill and in fact the E-350 is overkill for what i need on the road but its smaller and lighter. Hell my mom has the slowest PC in my family and its a fricking 3.06Ghz Celeron and all she does is play Age Of Empires and look up recipes! In just my family we are up to FIVE desktops and THREE laptops, what would we need more PCs for?

Tablets are selling because they are new and there are still folks that want one that haven't got one, that's all. With PCs the OEMs got used to everyone chunking every 3 years thanks to the MHz wars but the wars are over and even the lowest AMD or Intel dual frankly twiddles its thumbs a good 90% of the time because the things folks are using them for simply doesn't need THAT much power. Hell my kids have been gaming for the past 4 years on Pentium Ds and are just now reaching the point where games need more power, I slap in a $120 AMD triple core bundle and they'll probably get at least another year or two before i need to toss their HD4850 GPUs. There just aren't any killer apps that are requiring folks to chunk and with Windows getting a decade or more of support there just isn't a point tossing before EOL anymore. Name one job your average non gaming Joe Blow is gonna have that is gonna stress even the bottom of the line AMD triple huh? Mafia Wars? Farmville? Their FB page? Most of my customers buying now simply won't replace their PCs again until Win 7 hits EOL in 2020 so no shit PCs aren't gonna sell like tablets, there is too much power as it is!

TL:DR? Give tablets a few more years, to where even the bottom of the line one is a dual core or better and does 1080p and watch how quickly the market slows down. Most of my customers that bought tablets are using them for glorified eReaders simply because they fricking hate writing on the things, nothing beats a keyboard for text.

Re:Also, if you owned Apple

[tlhIngan]

Not to mention how many CEOs had Bill Gates' home number and could call and say "Bill give me a hand" and actually have him do it? Oh Gates wasn't doing it to be nice for sure, he knew if Apple went tits up that antitrust was gonna rip him a new asshole, but despite the fact Apple guys HATE to admit this Gates really helped to calm the market and get developers back on board with Apple. Remember at that time the investors were shitting kittens and the stock was doing lousy thanks to all those "Is this the death of Apple?" stories being run at the time but when Gates showed up and said to the effect 'We believe Apple has a bright future so we are gonna invest in their stock and make sure Microsoft software is available to the Mac" a LOT of developers and investors said "Hey, if Gates thinks there is money to be made there maybe there is!". Of course the money was a pittance compared to what Apple had but it was the act that helped to calm the panicked market.

Exactly. That's the ENTIRE purpose of Microsoft's $150M "investment" in Apple. It was an investor confidence move, and not a move that was to save Apple. (Remember, Apple paid $430M for NeXT. Surely if Apple needed, Jobs could've found $150M in spare change from that).

Microsoft sold that stock when they could a few years later for 3 times as much money.

Steve Jobs knew he needed to calm the markets, and what better way than going after the world's largest software manufacturer to make some investments. The money was trivial. The biggest news was development of Microsoft Office for Mac and IE. (The Mac Business Unit at Microsoft at one point had a nicer version of Office than Windows' Office).

Of course, a Microsoft-hating Apple user wouldn't admit it, but they wouldn't admit that Apple "needed" that $150M either. In the end, that whole $150M was just an investor confidence thing, coupled with Microsoft's commitment for at least 5 years of developing Office for Mac.

Jobs just reached out to one of this oldest associates knowing they both had problems - Microsoft and antitrust, Apple and investor confidence, and cunningly engaged in a plan that mutually benefits both.

He's probably right.

[icebike]

Trying to do much REAL WORK(tm) on a tablet is an exercise in frustration. By the time you add a keyboard and mouse so that you can be even marginally productive you might as well get the tablet so that you can work even where/when there isn't a wireless network.

The tablet's niche is on the couch or the train or the bus.

Re:He's probably right.

[Captain Splendid]

No he's not right. Since the 90s, the "Computer" business has been primarily consumer driven. Which, for the majority of the population, is no longer a desktop, and less and less a laptop.

If Michal Dell wants to ignore the the metrics that made his company a household name in the first place, that's pretty damned stupid.

Re:He's probably right.

[icebike]

Sorry, why are you adding a mouse?

Because keyboard and touch screen is a combination that just doesn't work. I've tried it, and found it just easier to add a bluetooth keyboard and mouse combo rather than reaching across my keyboard to touch the tablet all the time. Touch screen cursor placement is finicky on the best of tablets. And any amount of typing beyond the short email is a hopeless productivity killer.

Re:He's probably right.

[MightyYar]

Trying to do much REAL WORK(tm) on a tablet is an exercise in frustration.

What you say is true, but for most people, "real work" means text editing, taxes, Quicken, maybe some photo organizing. Any computer made since 2006 is more than adequate until XP goes dark in 2014. If people get on an 8-year upgrade cycle for desktops/laptops, Dell is in for a real hard decade.

Re:He's probably right.

[bonch]

The problem is that a very large amount of people don't do what you would consider "real work"--they only want to check email, browse YouTube, and visit Facebook, and they only have PCs because it was the only way they could do those things previously. Michael Dell has a vested interest in telling people that PCs will rule forever, but I have to tell you, having a portable computer that you don't have to spend hours of maintenance on every week is really, really nice, especially in bed or on the couch.

Re:He's probably right.

[the_B0fh]

At work, there's a couple of VPs whose passwords expired because they haven't logged in to their windows PC, but have been using their ipad/iphone for everything.

So, different uses for different people.

Re:He's probably right.

[Grishnakh]

What makes you think he was ever all that smart? Dell didn't get to where it is through innovative products; it got there through, at best, innovative and efficient manufacturing and ordering and low prices. They made it easy to configure a PC or server exactly the way you want it with a large array of options, and purchase it, with a very low price. There's no product innovation there, their products were nothing more than white-box PCs. They just made it easy for people to buy them. Plus, they started with desktop PCs and later added servers and laptops; they followed the market. Did Dell ever create anything innovative or lead the market in any way (I mean, create a new market the way Apple did with the iPad, where many others tried to sell tablets and make them popular and no one cared, but then Apple made one and suddenly it's a whole new market and not some tiny niche)? Nope. They're like Walmart: they see stuff that other people are doing, copy it, and try to do it a little better and more efficiently and with lower prices and profit in the process.

Now it looks like they're getting a little set in their ways. Or, maybe he has the right idea: maybe he knows that if he tries to make a copycat tablet and sell it, that it's just going to bomb, since it seems that for whatever reason, only the iPad is actually selling like gangbusters in the tablet market. Part of this may be the tie-in to the Apple app store, which effectively locks out competition since you can't run iOS apps on non-Apple machines. So instead of trying to do a me-too product and fail, or just ignoring it altogether, he's trying to downplay it and convince people to stick with the products his company is good at. Remember, part of the job of a CEO is lying to people just like a salesman, to try to sell his company's shit, except worse since a CEO's public remarks can have huge effects on both his own company and the marketplace.

Re:He's probably right.

[artor3]

You're assuming consumers never do real work, which is not a good assumption. Lots of people need to work from home now and then. And not just the people in techie professions, but teachers and reporters and managers and so on. None of those people will choose a tablet in place of a PC. And then there are the tens of millions of people who play video games like WoW or CoD. And there's the ever growing blogging world, whose members would likely prefer to write up their posts with a real keyboard.

Tablets represent a real threat to the laptop market, and may outright kill the netbook. But the PC has some major advantages that will allow it to remain the top choice for most people (who may also buy a tablet to go along with it!), at least until we get a sufficiently good docking system that can allow a tablet double as a PC.

Re:He's probably right.

[hey!]

Real work? Depends on what you mean. A new tool often *redefines* what "real" work is, although we'll have to wait and see. I certainly see tablets taking over much of the information *consumption* tasks done on a desktop computer.

This is how it has always worked. We didn't stop using mainframes when minicomputers came along; some of the tasks that used to be done in major datacenters were moved out to smaller installations and big iron actually bifurcated into two new market segments, each larger than the parent: high performance computing for weather prediction and such, and mainframes for moving vast volumes of data around ultra-reliably.

When PCs came along people stopped doing most interactive work directly on mini-computers via dumb terminals. We renamed "minicomputers" "servers" and focused them on providing data services to personal computers. The market for servers is certainly far larger than the mini-computer market was in 1981 when IBM introduced the PC (or in 1977 when Apple introduced the Apple II).

What happens when a new product category is created is that it becomes an area of fast growth, which sucks *attention*, but not necessarily profit from the old ones. It may in some cases spur growth, as desktops spurred the growth of the server business. The days of almost guaranteed exponential growth are long gone in the PC business, but it is possible that tablets rather than cannibalizing the PC business, will re-focus it.

At least probably. Predicting the future is hard, especially since we're dealing with *two* emergent techologies: really capable mobile devices and cloud services over ubiquitous networks. But *historically* when a class of smaller, cheaper, more convenient computing devices is created, what *had* been the low end segment doesn't really suffer. On the other hand individual firms (like DEC or Wang) *do* suffer when they fail to adapt to changes in the markets they were successful in.

Re:He's probably right.

[aristotle-dude]

Trying to do much REAL WORK(tm) on a tablet is an exercise in frustration.

Do you mean like a doctor at a hospital looking at CTC scan or chart? Do you mean like a plant of warehouse working checking inventory? A meeting attendee reviewing meetings notes/annotating those notes? Is it not real work for someone to show their client a prospectus on a tablet and being able to make quick alterations on the device while meeting with them? What do you define as "real work"?

I would think that it would be equally frustrating to work with a laptop without a wireless connection. Many tablets like the iPad 2 come in 3G cellular data models so that takes care of the lack of "wireless".

Re:He's probably right.

[mjwx]

And this information comes from...?

Personal histories, mine and thousands of other geeks I've talked to over the decades. Thousands of articles and editorials over the same span, etc.

Seriously, this is not a [citation needed] occasion. If you've been in the biz long enough, this is basic stuff.

No it isn't a [citation needed] moment, Dell and HP are the worlds biggest PC manufacturers because they are big in the business world. The consumer world is tiny compared to that.

The consumer is the poor cousin to business, businesses drive sales.

I've been in the Biz long enough to know that, it's basic stuff.

Re:He's probably right.

[evilviper]

The problem is that a very large amount of people don't do what you would consider "real work"--they only want to check email, browse YouTube, and visit Facebook,

That's not everything most people do. That's 95% of what most people do, and all they think of, but losing the other 5% becomes a real killer. Manipulating photos, video, having terabytes of storage, printing out coupons, printing out most anything, audio capture/editing, etc., etc. I've yet to meet someone who doesn't have one major niche purpose for their computers.

but I have to tell you, having a portable computer that you don't have to spend hours of maintenance on every week is really, really nice,

What the hell kind of maintenance are you doing for hours every week? If you're talking about security updates, well you're in for a big surprise when worms for iOS / Android start spreading. If you're talking about disk cleanup, well having a piddly amount of storage is a huge negative, not a positive that you can't do it anymore. Other than that, I can't think of what "maintenance" you need to do all the time.

Re:He's probably right.

[sonicmerlin]

Dude, what you described *is* innovation. It's like the Japanese bringing just-in-time manufacturing to the auto industry. It's just supply side innovation, rather than client-side.

Only a threat in multiple computer households

[pavon]

Agreed. On the other hand, I imagine that a fair number of the tablets sold went to people who were thinking about buying a laptop/netbook as a second computer, but then opted for the tablet instead.

Re:Only a threat in multiple computer households

[realityimpaired]

Michael Dell is usually right about that kind of thing. That's not because I'm any kind of fangirl, or because I used to work for him, just that he's historically been pretty good at predicting market trends. You said it yourself... it's a good replacement to a *second* computer, but you still need a real computer to type documents and actually create content for. Especially at a school.

What I'd like is a modern version of the "tablet" computers that Lenovo was selling 8 years ago. The kind where you could flip the screen around and use the thing as a tablet, or you could open it up and have a working laptop? Couple that with an ultraportable 13" laptop that tips the scales around 3lbs, and they could make a ton of money on it. Wouldn't even be that hard, they'd just have to rearrange the hinge design on the laptop I have right now (a Dell Vostro V130), and replace the LCD with a touchscreen. I'd even be willing to accept one that requires a stylus instead of finger input. It would be hugely useful. I would be willing to accept the extra bulk inherent in that kind of design in exchange for the increased usability, and I'd still have something that's more portable than the heavier 15" or 16" laptops most people buy.

Re:Only a threat in multiple computer households

[iluvcapra]

Michael Dell is usually right about that kind of thing. That's not because I'm any kind of fangirl, or because I used to work for him, just that he's historically been pretty good at predicting market trends.

Michael Dell got ahead of this one: direct-marketing PCs works as a business model, and commoditization makes PC hardware mainly a supply chain management business. That was in 1984 and he rode this insight to victory!

Aside from that, it's been mostly misses, he's been cursed ever since he gave his free advice to Steve Jobs in 1997. He might occasionally prognosticate but he doesn't put his money where his mouth is. Dell completely misread media players and mobile, and its market share and profit margin off PCs has been in decline for years. It has not service or cloud strategy, no content strategy, no real brick and mortar retail, something hardware manufacturers have been getting into over the past decade. It's a mess, it's like they're still in 1997 and have their sights dead-set on Packard Bell.

Re:Only a threat in multiple computer households

[Man On Pink Corner]

Dells primary audience is business, tablets are consumer items and rarely used in businesses.

Yeah, I remember when people around here used to say that about iPhones.

By the same token

[hardtofindanick]

If you were going off to college and could only have one device,

Let's turn that around:
If you were home, which device would be the first to pick?
If you were at the beach, which device would you pick?
If you were on a train which device would you pick?

It is kind of obvious that PC is for work and tablet is for fun. No clear winner here.

Re:By the same token

[fermion]

I believe there was a company named Gateway that built very nice and inexpensive dekstop computer. No one though that laptops would overtake desktops because who would buy a throw away machine the could not be upgraded and was usually slower and less responsive than an equally priced desktop.

In 2007 laptops sales were overtaking desktop sales and by late 2008 in the US laptops outsold desktops. The reality was that most people did not want to upgrade machines, that the MS issue made buying machine cheaper than upgrading, and that $400 for 2 or three years of use was not outlandish to many. The simplicity of the machines made the popular. Somethings could not be done on the machine, but enough could. Coincidently, Gateway, who assembled desktops, sold itself at a bargain price around that time, and one unit was defunct by 2009.

Unimaginative and backward thinking business types think consumer attitudes will never change and the way things are done now will always be the way things are done. I don't know if I would ever move to a a tablet for my primary machine, but I do know that several years ago i moved to a laptop as my primary machine, having retired my desktop. Even more interesting is i have almost retired my 17" laptop and use a MacBook Air for the vast majority of my work. All my daily computing resources fit into a case that is about the size of a sunday magazine and a few inches thick.

I would argue that Dell needs to do something creative at this point. It is not doing badly but has seen no real growth since 2009 when it recovered. Essentially two years stagnant. In reality, the stock price, inflation adjusted, is the same as 1997, so that is 14 years of, on average, no growth. Dell, because it is dependent on the whims of MS, cannot really do anything to break out of the death cycle that in plaguing the PC industry, so it claims the cycle does not exist, in much the same way that an addict might deny the effect of the drugs. Something is coming to take over the PC. The PC is not working really well for a lot of people. It may not be tablets, but will be something.

What a coincidence

[symbolset]

Jerry Shen just Announced a Tegra 3 tablet with ICS for $250.

Re:Mr Dell's reality distortion field

[bigstrat2003]

It's insane to say that the PC is dying because people aren't buying new ones. Maybe (just maybe) people are happy with, and are using, the PCs they already have. That's not "dying", that's simply market saturation.

Kodak thought so too...

[Tangential]

From Kodak's 2002 Annual Report:

Our traditional film business is sound as digital imaging continues to evolve.

That was 10 years ago. The typical end-user desktop/notebook world probably has a similar life left. Just as a few specialty photographers still need film, there will always be niche professionals that need high-end desktop or notebooks, but most end users won't.

It's all about the applications

[roc97007]

As soon as the apps I need are available and can be reasonably manipulated on a tablet, the laptop will be dead to me. Moreover, a tablet with sufficient resources could easily take the place of my PC, with *at most* a docking station.

Michael will continue to be right for awhile, but inevitably at some point he will be wrong. Hopefully (in my opinion) soon.

Re:It's all about the applications

[Burning1]

A friend of mine in college made a very good point.

She was watching the tablet owners walk into class.... Set up their tables in their docing stations and folding holders, lay out their bluetooth keyboards, plop down their mice, and prepare to work. Comparably, the laptop owners could set their device down, open it up, and begin talking notes.

The advantage of a tablet is lost when you have to carry around all the acessories you'd expect to see on a full size computer. The laptop will continue to improve. There's a nich for a tablet - some things it's more convenient for than a full size laptop... But also some real disadvantages. i don't see the laptop going away anytime soon.

not the full quote

[larry bagina]

he also continued, "And if you could have three devices, well, let's just say that none of them will be a Dell."

Good bye Dell

[nurb432]

Sounds like he's got the same problem most other giants have had at some point, just before they start gong down hill. They refuse to acknowledge the changing tide around them, and are unable ( unwilling ) to adapt.

The first step is denial.

Re:Mr Dell's reality distortion field

[Ethanol-fueled]

Exactly. As somebody above said, any PC made in 2006 is more than powerful enough to do almost anything other than play the latest bleeding-edge games. Aside from gaming and other extreme-performance, there is no longer a credible excuse to keep shoving the latest specs up the average consumer's ass.

Incidentally, I have 2 Dell computers I bought refurbished originally manufactured in 2004(laptop) and 2005(desktop) that I bought for a couple hundred dollars each, and both with linux installed perform superior to more recent Windows systems with security suites. I love showing off the fancy Compiz effects to Mac users while telling them that my whole desktop setup cost only 400$ including a new name-brand 23" flatscreen.