Slashdot Mirror
Now That It's Private, Dell Targets High-End PCs, Tablets
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."
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...
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.
Boards are typically appointed by the shareholders. A large proportion of shares (majority?) are held by "Wall Street" as part of mutual funds, etc.
The problem is faceless Wall Street, which will sue if they don't feel the CEO is doing their duty to artificially buoy the stock price in the short term. It most certainly is Wall Street that created this culture of "what have you done for me lately?" that guides the decisions of management. It is Wall Street's fault that executive management expects to be paid a hefty amount of stock instead of simple monetary compensation so that the higher ups making the decisions are all rewarded by taking the short position.
by Mike Buddha -- Someday the mountain might get him, but the law never will.
Meh. Admittedly, I've pretty much ignored all such events since Alienware functionally went a way.
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
Anybody that thinks Dell isn't concerned about profits is fooling themselves. Dell wants a good looking bottom line so that he can take the company public again. IPOs are where the money is.
Not having to appease a multitude of diverse investors does give management more freedom — provided, the company has enough capital without being publicly traded.
Sort of like a tyranny or monarchy — depending on the tyrant/monarch's personal qualities, it can be spectacularly more successful than anything having to answer to the crowd (such as republic or democracy). It can fail spectacularly too, though...
That said, I don't think, Mr. Dell is wrong on this one. There are plenty of people (myself included), who prefer Audi over Volkswagen. They may also prefer a higher-class computer...
But none of us here have any skin in his game, so we can just from aside, while he is busy working.
In Soviet Washington the swamp drains you.
Dude, you're getting a Dell.
Understood.
Yet, for example, Apple is competitive. But Dell is not? The same major 'shareholders' mutual funds, etfs etc hold both companies. I agree that the shareholders elect boards, but each board has a unique momentum and culture despite all being more or less elected by the same people.
Please let this mean the next developer edition XPS is going to be amazing. The current generation is pretty good already but where is my high dpi screen? I hope they are aiming at Apple's turf and I wish them luck.
> "Because they are no longer reporting to Wall Street, they can be more competitive."
Paraphrasing popular song: "If you love your company, do not let it go"
I do not believe in karma. "Funny"=-6. Do good and forbid evil. Yours, Oft-Offtopic Flamebaiting Troll.
In April Google also did a stock split, and started offering Class-C shares that trade under "GOOGL", they have 0 voting rights. Granted you can still purchase class-A shares, as before...but even before this stock split there were still two classes of shares: :: available to the public, and
Class-B :: - primarily held by Larry Page, Sergey Brin, and Eric Schmidt.
Class-A
Class-B shares have 10 times the voting rights of Class-A, and gives the Class-B holders 61%+ of the voting rights.
Apple is somewhat special. See, for example:
Institutional ownership of Apple shares has declined as funds question the company’s ability to increase revenue long term, Morgan Stanley said in a report this week. Apple’s 30 largest shareholders own a record low 30 percent of shares outstanding, down from a peak of 40 percent in 2009, according to the report.
The problem is faceless Wall Street, which will sue if they don't feel the CEO is doing their duty to artificially buoy the stock price in the short term.
They will, huh? When has that happened, exactly?
"Somebody has to do something. It's just incredibly pathetic it has to be us."
--- Jerry Garcia
Dell thinks they can be Apple, but don't have the walled garden that makes it work.
So put your name to your comment, AC. My experience with Dell has been less than 2% failure over 1000's of Optiplex, Latitude and Vostro units. The main cause of warranty claim has been DIMM at > 80%, PSU at ~18%, MB at ~2%.
A lot of folks whinge about Dell, I suspect that's because these folks would rather roll their own PC. That's fine, until you have to roll 1000 in a week.
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.
The tablet mentioned in the summary runs Android.
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!
Those of us who remember the first time Dell hit the market - as a mail-order company with little to no retail presence (except perhaps Sam's Club?) - remember they were the first one to really make a big run at it with all off-the-shelf parts. The earliest Dell PCs even had standard ATX motherboards in them that could be easily upgraded if the owner so desired. This was a huge improvement over the rest of the PCs on the market at the time, which were mostly Packard-Bell systems that were a nightmare to repair and nearly impossible to upgrade beyond adding RAM. If they're going high-end now, it sounds like a return to how they got going.
Damn_registrars has no butt-hole. Damn_registrars has no use for a butt-hole.
Isn't that the way it's supposed to be?
If a company fails the owners get paid last.
Wow, sent an e-mail as suggested when clicking on "use classic" banner, and got a fast response that addressed my msg
If a company fails the owners get paid last.
All stock holders are owners by definition, but the way it's generally supposed to go the more say you have in the running of the company the lower on the list for pay out in case of the company being liquidated. Generally employee wages are paid first*, then bond holders, then other debt holders**, followed finally by preferred stock holders then regular stock.
*Often there has to be a bond/insurance that ensures they're paid.
**Secured debt gets the security.
I don't read AC A human right
I want an X51 with Windows 7 Pro 64 Bit (they will not sell it with this OS). So I am holding out until Windows 9 Pro 64 Bit is available. I like Dell a lot and would buy an X51 today if they would offer the OS I want. Maybe now that they are private they will work with us?
If Dell has a reputation in the PC market, it's as the company that got low-end PCs to customers cheaply.
Sure, that may their current reputation but back in the early 90s, Dell earned a reputation as a builder of high quality and well-specced computers. I recall working in the electronics department in a large store and running tests against the Packard Bells, ASTs, and Dells and the Dells always won every single benchmark by a large margin.
In short, they were the kings of the 386/486 world. That is how they started. Perhaps they will return...
"Someone needs to talk to the tree of liberty about its ghoulish drinking problem." by ohnocitizen
If you take your company to the vultures of Wall Street, you find that you have created an extra problem.
Nae king! Nae laird! Nae yurrupiean pressedent! We willna be fooled again!
And of course, none of them pay any dividends, so why any poor sap invests in them is beyond me.
[FUCK BETA]
In terms of laptops, it used to be my policy to stay well away from Dell. My thinkpad X61T has been going strong for o so many years, but the dell laptops from that generation were garbage: http://www.thinkwiki.org/wiki/...
I actually found it cheaper to buy a Dell-outlet-store desktop than to build my own.
Of course that probably doesn't reflect state of affairs today. I am a little annoyed by Dell's inferior Linux offerings. If you want the best deal from Dell, you are paying a Microsoft tax :(
I have been a Dell user since 2001 and have always found their laptops well suited to my needs. Even when they broke down, service would be at my home in 24 hours to fix it.
This past May my university places an order for what I thought would be a very powerful 17" laptop ( I do a lot of statistical modeling). Not only did they send the wrong unit, but after 5 months the unit I finally got is defective. Their 24 hour warranty service took two weeks to replace a defective keyboard with another defective keyboard, and the computer is DOG slow even doing simple things like switching programs or system folders. It crashes and freezes ( running windows 7 pro) and I have given up and told our IT folks the $4000 computer we just bought from Dell is not something I can waste more time on. Dell just lost a 14 year loyal customer. Going private did not improve the company in my experience.
You're right, because no computer company has ever turned itself around from almost going bankrupt to being the most valuable company in the US while still remaining public....
Just because someone else managed a very difficult trick doesn't mean that it is repeatable, likely or a good idea. To use a basketball analogy that's like pointing out that someone else managed to sink a basket from the other side of the court and thinking "why doesn't anyone else do that?" You don't bet the company on trying to replicate the long shot improbable success of another company.
That's not what I remember. I remember everyone in the 90s buying Amazon stock, and their revenue going up and up and up.
Yes it did. However their profits did not. The only reason nobody cared at the time was that everyone else was doing the same thing. The dotcom bubble was a strange little era. Companies with nonsensical business models were going public with ludicrous valuations because everyone was afraid they would miss the Next Big Thing. If you started Amazon today I'm dubious investors would permit the company the same latitude they did back then.
Although the stock did have a little problem around 2000, I wonder what happened then.
The bottom crashed out of the stock market and they nearly got dragged under. If you were of a gambling mind you could have gotten Amazon stock for a very very low price at that time.
Hopefully this will result in more laptops with better displays... I'm boggled that manufacturers like Dell are still selling 15+" laptops with 1366x768 displays and have the gall to call them "beautiful" and "high-resolution" in their marketing. WTF.
When I was looking for a new laptop a year and a half ago, I had to look very hard to find 15" laptops with decent ('full HD', 1920x1080) resolutions.
Stop the madness!
- chrish
In short, the analyst should have said "Because they are no longer reporting to Wall Street, they can take more risk."
"Because they are no longer reporting to Wall Street, they can be more competitive."
Now that they don't have to impress shareholders, they can make money and be successful? What?
When if you want a notebook PC?
In other words, Apple has managed to get rid of investors who are in it for the money and instead get a bunch of investors who are investing because they believe in the company and its vision.
Remember, institutional investors are great for instant cash, but they demand things that can be quite harmful for the company like short term profits over long term growth.
Anyhow. Dell always had a higher end brand - they called it XPS and it was supposed to offer premium products (higher end products) and services - including technical support where they shunted you to special XPS reps who can get your issue resolved quicker. Of course, that was a few years ago and now it's just more of a marketing thing that offers nothing over the cheap PCs.
I read something about that recently, but I don't know its veracity --- that the way capital gains taxes were done (or changed) made it better for companies to play the overseas shell games and focus on stock growth than to pay dividends. Of course the stock growth aspect isn't always necessarily "real value" and when it auto-corrects/adjusts you can be left holding a bag oh shit.
Dell targets people with more money than sense.
Makes sense.
You are aware that Volkswagen and Audi are the same company? That A3 you covet is a Polo with different sheet metal.
That was precisely his point.
I want an A3 sized car. Do I buy a Skoda (cheap and functional), a Volkswagen (moderately expensive and nice inside), a Seat (moderately inexpensive and interesting) or an Audi (expensive and luxurious).
I want a laptop. Do I buy a Dell (business focussed, cheap, functional), an Alienware (gamer focussed, fucking expensive, garish) or a (rich people focussed, expensive, uses carbon fibre, titanium and solid mahogany keys)..
Same company, same product, very different options.
Yes, two-share types (or multiple share types) are much more common now.
Similiar to what was mentioned in regards to Alibaba, except I think it's only one share type - of which the "Alibaba shares" are actually in a holding company with no voting rights.
I wish more founders kept control of their companies -- they tend to give a shit about "the company" and "the employees" compared to need-to-be-more-rich Board's of Directors.
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!
As I have written earlier, short term profits and long term growth are not mutually exclusive events. Quarterly financial reports gives a snapshot into the operations of a company. Think of quarterly financial reports as a performance measurement. A bigger issue is tying CEO salaries to earnings but that is a different topic. If companies are not selling premium products at premium prices that means it's not profitable (or not profitable enough) to do so. I have news for you, companies love making money, and they would gladly sell you a premium product at premium prices if they will make a profit. For example, Samsung sells a 4K television for $100,000. That's is a premium product at a premium price. That is one example of a company selling a premium product that fulfills a need.
I can't believe this. My company buys Dells by the dozen and we've never ever received a dud.
"When information is power, privacy is freedom" - Jah-Wren Ryel
After I stopped building computers for family members I started referring them all to dell.
The reason I did this is that dell seemed to have a minimum quality unlike other companies.
Until they started selling netbooks, the cheapest computers on dell were always midrange
computer at a decent price with decent reliability. Walmart on the other hand tended to sell
stuff that was 3 years old technology and practically obsolete before you unboxed it and
sometimes had horrible reliability issues and zero customer support.
Yes, basically if you reinvest all your profit in growing your business you minimise your tax bill which is in some sense beneficial for shareholders. The overseas thing just multiplies the effect slightly. However, at the end of the day the only reason to own part of a company is to receive profits from it and if you're not receiving profits and have no expectation of receiving profits any time soon, you're putting an awful lot of faith in capital growth. This is Warren Buffet's great trick: he buys companies that pay strong dividend streams and reinvests the lot. Berkshire has never paid a dividend (well, once, in 1967).
[FUCK BETA]