“In recent weeks, Dell has held a virtual fire sale, offering many PCs at rock-bottom prices. That may be a bonanza for the tightwad consumer, but the super-low pricing once again is taking its toll on the world’s largest computer seller,” Louise Lee reports for BusinessWeek online. “On May 8, Dell said it would post fiscal first-quarter revenue of $14.2 billion, at the low end of its earlier projection of $14.2 billion to $14.6 billion. Worse, Dell said it expects earnings of about 33 cents a share, falling short of a projected range of 36 cents to 38 cents, including an estimated three cents of stock-based compensation. The announcement sent shares down by almost 6% in extended trading.”
“The earnings warning is the latest in a year-long string of financial disappointments for the Round Rock (Tex.) company. Just two years ago, Dell was posting quarterly sales growth rates of more than 18%. By contrast, the current $14.2 billion projection represents a growth rate of only 6% over the year-ago level,” Lee reports. “And analysts don’t believe Dell’s strategy of bargain-basement pricing will change any time soon. ‘We expect more of the same, limiting the near-term upside in margins and profits,’ says Brent Bracelin, analyst at Pacific Crest Securities.”
“The trouble for Dell is that unit volumes aren’t compensating for price reductions. Besides hurting Dell’s sales and profit, sluggish unit growth is also eroding market share, another key measure of overall health,” Lee reports. “Dell’s key rivals, including Hewlett-Packard and Acer, meanwhile, saw market shares increase, according to IDC. The gains reflect competitors’ growing appeal as they’re increasingly able to match or even beat Dell’s prices to steal sales. ‘Those companies have gotten more price-competitive,’ says Cindy Shaw, analyst at Moors & Cabot Capital Markets. “Dell doesn’t have the price advantage any more.'” Lee reports. “And compared with some of the competition, in particular Apple Computer’s machines, Dell’s products simply don’t stand out, further eroding its appeal to customers. While Dell’s computers are mostly still plain, neutral-colored boxes, ‘when you look at an Apple Mac, you want to touch it and bring it home,’ says Shaw. Dell’s big challenge now is getting more shoppers to swoon over its products before its longtime domination over the PC industry slips away more.”
Full article here.
MacDailyNews Take: If you think that we just can’t get enough of this story, well, you’d be right. Dell makes nothing special or unique. Dell assembles dull boxes that try to run Windows, just like everyone else’s dull boxes. Dell’s bait and switch website is a maddening morass of mediocrity with coupon codes. Dell’s high point (like Microsoft Windows’) is in the rear view mirror. Why would anyone in their right mind — or not locked into a contract — buy a Dell when Apple Macintosh runs the world’s most advanced operating system plus Linux and even Windows (if need be), too?
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Down with Dell!
AAPL Market Cap $ 60,276,910,360
DELL Market Cap $ 59,308,754,400
AAPL Earnings/Share $ 1.98
DELL Earnings/Share $ 1.46
Any Questions?
^first post
What’s the market value of Apple vs dell today?
True! Keep it up MDN and going strong.
MDN Word of the day – Dead lol
Thanks Big slide… it wasn’t up when I posted…
Dell should look at what fire-sale pricing did for General Motors (in the US market).
GM lost both money AND market share!
It takes more than pricing to stay alive in business.
The problem for Dell is that they rely solely on a business model: selling large volumes of dirt cheap boxes at low margins. A business model is not protected by patents or copyright laws. Therefore, it is simple and legal for competitors to copy the business model and even undercut Dell’s prices. For innovation, Dell relies on Microsoft and its Windows OS. So basically, they’re f*cked.
Apple, on the other hand, relies on design and innovation, both protectable by copyright laws and patents. To compete, someone would have to out-innovate Apple, and that’s a tough thing these days.
could some one please tell me the point in writting first post? ? ? half the time people who do it come in second and the other half usually have nothing useful to say – very sad
“AAPL Market Cap $ 60,276,910,360
DELL Market Cap $ 59,308,754,400
AAPL Earnings/Share $ 1.98
DELL Earnings/Share $ 1.46
Any Questions?”
Yeah, question: what’s your freakin’ point??
“If I were running Apple, I would milk the Macintosh for all it’s worth — and get busy on the next great thing. The PC wars are over. Done. Microsoft won a long time ago.” — Fortune, Feb. 19, 1996
Hmmmmmmmm
Mackie Dell should “sell all the stocks and return the money to the rightful shareholders”! The quote came from his own mouth years ago when he was being sarcastic to Apple. Eat your own words and foot Mackie!! Ah… haha….
“he problem for Dell is that they rely solely on a business model: selling large volumes of dirt cheap boxes at low margins. A business model is not protected by patents or copyright laws. Therefore, it is simple and legal for competitors to copy the business model and even undercut Dell’s prices. For innovation, Dell relies on Microsoft and its Windows OS. So basically, they’re f*cked.
Apple, on the other hand, relies on design and innovation, both protectable by copyright laws and patents. To compete, someone would have to out-innovate Apple, and that’s a tough thing these days.”
Yeah, and this brilliant strategy has yielded them a whopping 4% market share
Here’s one reason why people might choose Dell:
1) Apple MacBook Pro 17″ standard config – $2799
2) Dell E1705 with same or better specs – $2291
http://configure.us.dell.com/dellstore/config.aspx?c=us&cs=19&l=en&oc=E1705S3&s=dhs
JIM, nothing is forever, windows did win the battle, but the war is never ending. a bloated and insecure operating system like windows will cripple under its own weight! i forsee 1 set of programmes with a variety of operating systems in the future, with osx leading the way, especially if apple makes leopard compatible with windows apps.
Jim,
Jobs said that when he wasn’t running the company, before Apple paid Jobs and NeXT to take them over. That’s quite a big fact that you omitted.
The article says:
“when you look at an Apple Mac, you want to touch it and bring it home.”
It’s true, but what some analysts don’t understand is that a Mac is a beautiful computer in the outside as well as in the inside.
in the outside, the industrial design of Apple is better than a Dell. But some PCs had also a great industrial design, like, for example, the first Sony Vaios. Other computers also came with pretty radical design, like NeXT and Silicon Graphics, but never had the success of the Mac, even though they were amazing computers.
The beauty of the Mac is not only the case, but the operating system. When I looked at the Vaio, is loved the design, but to see Windows running just said what it was: Just a good looking PC, but a PC after all.
So, I don’t think changing the way Dell looks will change anything. Dell is not really an ugly computer. It’s plain, yes, but not ugly. I’ve seen uglier computer cases at computer shops.
But, what makes Apple appealing is the way the computer PLUS the OS look. That’s where the Mac is elegant. A Mac running Windows would be like the Vaio: very good looking, but a PC after all.
It’s not the looks what gives a Mac its value.
Nick,
I’ll take the Apple Mac because the Dell can’t run Mac OS X and Apple Mac-only apps for any price. Yes, I am able to think beyond initial sticker price unlike 80% of Wal-Mart shoppers / Windows users.
No koolaid here:
Marketshare isn’t everything. Comparing the financial health of Dell versus Apple makes that much clear.
The “brilliant strategy” of innovating produces excellent products for the consumer and earns the company enough money to keep innovating and producing great products. Everyone wins. If the other 96% of the computing world doesn’t want in on the fun, who cares? That certainly doesn’t mean Apple has failed.
MDN Magic Word: “Trade” = I would never “trade” bigger marketshare for less innovation and quality.
laugh of the day:
http://www1.us.dell.com/content/products/category.aspx/notebooks?c=us&cs=19&l=en&s=dhs
Nick,
Perhaps, but there’s (again) one thing Dell does not have, and Apple does:
Mac OS X
I read not long ago the definition of a “killer application”: a “killer application” is an application that justifies the purchase of the hardware to run it. The first “killer application” was VisiCalc, which lead to massive purchases of Apple II computers before the IBM PC Era.
Today, Apple’s killer application is Mac OS X. Apparently, some people (like me) finds reasonable to pay more for a laptop, to be able to run Mac OS X. The reasons why Mac OS X instead of Windows are a different story. I have very good reasons to prefer Mac OS X over Windows (and they don’t have to do with looks).
So, again, it’s all about what you can run. If you don’t feel Mac OS X is worth the investment, I would not suggest you to buy a Mac, but go for a Dell.
And the discussion might start out of this I just said, but the fact is, people choose their computers for what they need to run, not for how they look like.
If you are a Windows user, go with Dell. If you don’t like Windows and want a good UNIX station without the lack of drivers headache, go for a Mac. If you like Linux and to experiment with a really cool OS,… well, in that case, any will do, hehe!! And if you like Windows, but would like to see what Mac offers, you can go with a Mac Mini and Boot Camp.
So, the choices are there. The choice is about machine AND applications.
The “whys” based on price and looks are not close to what reality is.
Nick, When I tried configuring the Dell to match the MBP specs I came up to about $2500 and it would not let me put on 802.11g wireless. So the cost differential is not as significant as you proposed. Also, this thing is a large brick and UGLY compared to the MBP. Not to mention that the MBP gives one complete freedom of operating system, while the Dell does not. It is worth $300 more.
“You only live once™” and “Grifterus”:
…so by your logic, the luxury tax of running Mac OS X on a laptop is about $500, right?
@jim:
“Nothing is over! NOTHING! You just don’t turn it off! It wasn’t my war! You asked me, I didn’t ask you! And I did what I had to do to win! But somebody wouldn’t let us win!”
– Rambo
And still Apple only has 3% market share.
30 years now and Apple´s market share is near the lowest it has ever been. 30 years.