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Now That It's Private, Dell Targets High-End PCs, Tablets

Posted by Soulskill on from the dude-you're-gettin'-a-weird-looking-tablet dept.

jfruh writes: If Dell has a reputation in the PC market, it's as the company that got low-end PCs to customers cheaply. But after the great drama of founder Michael Dell taking the company private, the company is following a new path, adding higher-quality (and more expensive) products like the Venue 8 7000, the thinnest tablet on the market today, to its lineup. One analyst notes that "Because they are no longer reporting to Wall Street, they can be more competitive."

9 of 167 comments (clear)

  1. Mind boggling by MasseKid · · Score: 1, Interesting

    Statements like these are mindboggling.... "Because they are no longer reporting to Wall Street, they can be more competitive." Your share holders want you to maximize profits and growth, this rarely results in wanting you to be less competitive...

    1. Re: Mind boggling by ShanghaiBill · · Score: 3, Interesting

      They can focus on long term rather than short term profits.

      Wall Street is willing to invest for the long term as long as you have a credible long term strategy. Amazon is a good example. They plow almost everything they earn back into the company, generating very little profit in the short run. The dot com frenzy of the 1990s was an example of long term investing that didn't work out.

    2. Re: Mind boggling by Anonymous Coward · · Score: 2, Interesting

      They can focus on long term rather than short term profits.

      Wall Street is willing to invest for the long term as long as you have a credible long term strategy. Amazon is a good example. They plow almost everything they earn back into the company, generating very little profit in the short run. The dot com frenzy of the 1990s was an example of long term investing that didn't work out.

      No, they really aren't.

      In the 1990s, everything thought Amazon was crazy. People invested in it because they knew 2 things:

      1. Bezos was blunt about the fact that it would be a LONG term investment.

      2. People signed up during the dot com bubble. If you were smart/crazy enough to sign on then, you were smart/crazy enough to stay in (at least as far as the LONG term plan went)

    3. Re: Mind boggling by Anonymous Coward · · Score: 2, Interesting

      Having worked for 15 years in publicly traded companies, I cannot tell you how tired I am of the drumbeat of making our quarterly earnings. I have seen a very consistent and substantial focus on short-term profit to the detriment of long-term growth.

  2. board of directors is the problem not Wall Street by vux984 · · Score: 4, Interesting

    One analyst notes that "Because they are no longer reporting to Wall Street, they can be more competitive."

    The problem isn't Wall Street. Its the board members. And lots of companies thrive just fine as public companies because the board is taking the long view, selects a CEO with vision, and then lets him pursue it.

    While you have a toxic board that is only looking to milk the company, selects weak CEOs, and structures management compensation to incent short-term thinking then you've got a problem.

    I guess taking it private is one way to get rid of a toxic board, and good for Dell if they can reinvent themselves this way. But the problem isn't faceless "wall street".

    Instead, name and shame the Dell board members. They were the ones enforcing the short term outlook.

  3. This sentence from TFA says it all by PapayaSF · · Score: 5, Interesting

    In 2009, Dell caught headlines with its premium Adamo slim laptop, which was considered a competitor to the MacBook Air at the time.

    Yes. "at the time." And remember the Dell competitor to the iPod? There are several problems for Dell here. 1) They are a maker of commodity hardware trying to move upmarket. But the fewer units they sell, the worse their economies of scale, so how to really make something special, without having to charge too much? Apple doesn't have that problem, in part because they sell 6-8 figures of even their high-end products. 2) Sure, Slashdot readers may be an exception, but most people who want Android and Windows machines rarely want expensive ones. So most of their target market will either want a cheaper Android tablet, or, if they want to spend more, they'll get an iPad.

    I think the best Dell can hope for is to be a niche player, a slightly bigger version of their subsidiary Alienware. 15 years ago, Dell and Microsoft both seemed unstoppable, but both have repeatedly stumbled since then. My, how the mighty have fallen.

    --
    Q: What does the "B." in Benoit B. Mandelbrot stand for? A: Benoit B. Mandelbrot
  4. Translation: by SeaFox · · Score: 3, Interesting

    Dell thinks they can be Apple, but don't have the walled garden that makes it work.

  5. Precisely by Sycraft-fu · · Score: 3, Interesting

    They were mad at Dell because Dell wasn't in Apple's market. Apple was exploding with growth, whereas Dell "only" had a stable market that they did well in. They didn't like all the server sales because that wasn't a growth market with huge margins.

    With high end boutique computers would be a similar issue. While margins might be good, volume would be low and would never go up. It will always be a specialty market. Hence not something investors want money being "wasted" on. Doesn't matter there's money to be made, it isn't enough money fast enough with the promise of infinite growth.

    Well, sounds like the private investors that own Dell now are a bit more sensible. They realize that there's something to be said for making money in smaller markets.

  6. I'd be willing to pay by hambone142 · · Score: 3, Interesting

    I'd be willing to pay for a high quality PC or tablet that wasn't made in China by the lowest bidder. I'm frankly sick and tired of poor quality Chinese crap! I once suggested to the CEO of my company (named after two people) to do the same (ignored of course).. To make it in the Yoo Ess but it'd damned better be good quality. I'd pay the premium. Sort of like the "Harley Davidson" of computers with out the T-shirts. I am so tired of supporting CEOs that bet bonuses based on short term quarterly report results at the expense of the long term health of the company. I'd also like too support a company that is truly innovative vs. one that can't even design a product and instead, outsources the crappy design and manufacture. Give me a premium product and I'll pay a premium price. I realize not everyone wants this but dammit! Give us a choice!