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back to article Dell directors foresee unremitting brutality in PC market

The global PC business is in a woeful state, and Dell founder, chairman, and CEO Michael Dell thinks the best way to put his eponymous company back on top is give it reconstructive surgery away from the prying eyes of the public stock market. In a 274-page proxy filing with the SEC on Friday, information trickled out about …

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Silver badge
Pint

IBM got somebody to pay for their PC biz

It was in the run up to Vista. Bright lot, those guys. After years of burning cash buyer Lenovo is happy to get margins of +2.6%. IBM's market cap is back on par with Microsoft's these days. Now that Windows 8 is upon us and PC Biz is a straight loser nobody's going to buy Dell's money pit.

Good luck to them. They're going to need it.

Bottom's up!

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Childcatcher

The Tree is Dead

The odd thing about trees is that they actually die long before showing any visible signs of necrosis, so by the time you finally notice a problem, you're already looking at a long-dead corpse.

That's what's left of today's PC industry, in a nutshell.

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Holmes

Re: The Tree is Dead

Indeed. I've taken the liberty of scanning in some pages from the latest Dell catalog that I think many of you will find amusing: http://imgur.com/a/taplN . The first page is to show you that it is indeed from a recent catalog (no joke / photoshopping) for 2013; the second page is to show you what Dell (the company itself) says about its own machines, and what each particular sub-brand "means"; the third page, in particular the Dell Precision M6700, complete with baseline specs and price, is to show you what is terribly wrong with this company, and possibly with many of the larger OEMs in general.

For those who cannot be troubled for a laugh on par with some of the BOFH's older material, the price / specs are so terrible, that given the choice between buying a half dozen tablets and wiring them up with some esoteric version of linux, or buying this laptop, I might prefer the former. Since I am past the age where spending my weekends recompiling the kernel to get sound working, that should tell you something. The PC industry isn't being tanked because PCs themselves are obsolete; it's because the people who have been running the industry for the past 5 years have done such an outlandishly terrible job that competitors with completely different form factors are actually getting a leg up on them. They've become like GM, Ford, and Chrysler of old, refusing to innovate, letting Apple do all the work, and failing to improve on their products; now they run around wondering why their secure monopoly, like when the Japanese busted open the American market, is disappearing.

Seriously, Dell, 2 GB of RAM, for a top of the line laptop, running Windows 7? What did you do, fire everyone with any tech experience? Did you run a market analysis that said 'people like machines with 2GB of RAM, like their Windows XP machines?' I can see why Michael wants his company back; it has his name on it, and the people running are destroying it.

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Facepalm

Re: The Tree is Dead

Seriously, Dell, 2 GB of RAM, for a top of the line laptop, running Windows 7? What did you do, fire everyone with any tech experience? Did you run a market analysis that said 'people like machines with 2GB of RAM, like their Windows XP machines?'

This is hardly a new thing. Dell have always been mean when it comes to RAM. I've got a Dimension 8300 in front of me with 256Mb RAM. It came from the factory like that. It's ten years old and still running fine, but 256Mb RAM? Come on...

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Re: The Tree is Dead

To be fair to Dell (or at least try to provide an explanation), the 2GB system in the catalog is there to provide a lower price intended to get your attention. If you go online to order the system you will have ample opportunity to upgrade the system in numerous ways, with clearly indicated price adjustments. Even when customized as nice power-user systems, I've found Dell's online prices to be more than competitive vs. similarly configured boxes from HP or Lenovo.

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Re: The Tree is Dead

I actually think it's a good thing being able to buy the computer with 2GB of RAM - I'd always buy the memory aftermarket for less than half the price the manufacturers charge. Same with hard drives...

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Anonymous Coward

Re: The Tree is Dead

Without trying to put to fine a point of it, my experience with two leading companie has been like this

Dell:-

Helllloooooo, my name isss andddrreewww, (Is it bollocks, you can't even pronounce it! Your pissing me off by lying to me before i've said a single word) how can elp you this morning? (it's mid afternoon)

I have a dead hard drive and I need a replacement.

Is light on computer? Maybbe power iss not on?

I'm an IT Professional, the hard drive has failed and I need a replacement.

<... 45 minutes later...>

I think hard drive dead. (No, really...) I sond engiineer to raplace, ok?

I can fit the new Hard dri.... Never mind, that's fine send me an engineer to fit it.

Alternately, HP Support:-

<scottish accent>Your through to Andrew, how can I help?

I... have a dead hard drive and I need a replacement.

Ok, have you got the code from the diagnostic?

Uh, sorry didn't realise I needed one, first time i've called HP for a replacement HDD. How do I get it?

<concise directions from HP chap>

ok, running the diagnostic now. So, uh. Your in Britain?

Aye, our business support is based in the UK. *chuckle* Your used to dealing with "support" from India then?

...If you would describe indian help lines as support, yes. Oh, i've got the diagnostic code *abc-code-123*

ok, just entered that on our support system. [droll tone] apparently the hard drive is dead.[/droll tone] would you like an engineer to fit the replacement or are you happy fitting the drive?

Just the drive is fine mate.

Yeah, thought it would be. The giveaway was you telling me what the problem was as soon as I picked the phone up. Where do you want the drive sent to?

<address>

ok, i'm just going to stick you on hold and type this up, ok?

Sure.

<2 mins later>

Ok, your new drive should be with you in the morning, can I help you with anything else this afternoon?

No, it was just the HDD.

Ok, thanks for calling and have a nice day.

You too, thanks for the help.

---

Having deal with both, do you think I buy (and advise other people to buy) from Dell or HP?

More importantly to Dell's prospects, if Dell started offering services do you think that any significant number of people who have had the "pleasure" of dealing with Dell support would be happy with the prospect of buying services from Dell?

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Meh

Re: The Tree is Dead

To be fair to Dell (or at least try to provide an explanation), the 2GB system in the catalog is there to provide a lower price intended to get your attention.

Yes, we all know the definition of an upsell. Unfortunately for Dell, you can buy RAM cheaper from Crucial or pretty much any other online RAM seller.

I've found Dell's online prices to be more than competitive vs. similarly configured boxes from HP or Lenovo

Is that because you'll slice your hand on the razor-sharp paper-thin metal cases they use in their cheaper PCs?

I'd prefer to pay a bit more for a Lenovo...

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FAIL

Re: The Tree is Dead

Yeah, I thought that too; however, considering both the price ($1459 stateside for an i5 is a bit...steep; for reference, my HP Envy 17, which came with an i7 and 8 GB of RAM was around, I believe, $1300, and that's without me listing the other major differences; maybe Dell sent me catalog for Australians by accident?). And more importantly, if you look at the resolution on this screen, it's touted as HD (your mind instantly thinks 1080P; http://cdn.instanttrap.com/trap.jpg ), but the actual pixel resolution is only 1600 x 900.

It seriously does look like Dell put together whatever components they had an overstock on, slapped a 'premium' label on it, and are now trying to hock it for the price of a Rolls-Royce. Half these components don't even make sense, even as entry level....and the other half you wouldn't spec into a premium laptop because it completely nullifies the premium label. Like buying a Porsche with a Lego steering wheel, Bose sound system, and cardboard seats. I don't even.

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Re: The Tree is Dead

Yes, but that's the true idiocy of this design. RAM is so inexpensive at the moment, that only the most naive of your first-time customers, who incidentally has spent the last two decades under a rock, would go for these 'upgrades.' I mean, if you're a large OEM, you're supposed to negotiate a lower price (at a higher volume) for things like memory, then pass some of those savings along to your customer, while keeping some of the savings for yourself; your customer gets a better machine than they can by buying the memory retail, and you and the memory guys make more money at the end of the day.

And do not get me started on the $1K 512GB SSDs that a lot of these places want to sell you. Since the cost of the SSD is usually less than $500, that's easily a 200+% markup. Wait, I take that back. If you go with OCZ, and / or get the PCIe variant of these SSDs, then that could easily be over $500. Point being, people are getting robbed.

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Meh

Re: The Tree is Dead

The industry tries to kid us that we need expensive Ultrabooks, then it tries to kid us we need a new operating system, then it tries to kid us that laptops and desktops need touch screens, then it tries to kid us we need to upgrade to ensure we have the fastest experience possible.

The consumer on the other hand has got wise to this crap..........

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Anonymous Coward

Re: The Tree is Dead

My 2008/2009 Dell XPS was great until it died 3 years 3 days later of a graphics chip failure. I now know there were problems with overheating, they changed the BIOS to compensate for this to the point that the fan was almost always on. All in all though it was a great little computer.

It was replaced with a Studio XPS 1645 with an i7 processor in 2010, while it has never failed completely it has proved irksome. It will hang at the drop of a hat, think for many minutes before wanting to send an error report and it really doesn't like software, any software installed on it. Before it finally gets going you could finish your Sunday lunch. The build quality compared to the last model was cheap, creaky and plastic.

The new ones appear much better, but once bitten twice shy. For not much more than an new XPS I bought a MacBook Pro. Now I have the best of both worlds, a Win7 computer and an OSX one in the same case.

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Thumb Down

Re: The Tree is Dead

I think someone works for HP.

In my 20 year experience in supporting PC's HP is by bar the worst. Pretty much as you have described for Dell in fact.

Don't get me wrong. I have love for neither in terms of support. Dell is OK. Actually if you learn the error codes before you call, you can just rattle off the answers. We have them written down somewhere.

But HP is just awful. Too many calls to HP involve waiting while I get informed about a support website I can log on to to get instant fixes. Yeh right - a website is going to fix a knackered Hard Disk.... I'm calling a business support line. Do they assume that 'Business Support' means that I know nothing about IT?

A recent scorcher of a call was a failed LAN port on an expensive Workstation. After several minutes of totally useless "Is it plugged in" type questions, the Indian tech decided it was a software issue and therefore nothing to do with them. 35 soul sapping minutes later - my entire office is entertained in the meantime as I get more irate - I finally get a tech out 'for a visit' the next day. With no parts as the Indian Tech still insists it's software.

Needless to say the engineer arrives the next day, see's its a faulty LAN port and orders up another Motherboard.

Trouble is they operate from 'scripts'. Designed by the incompetent to allow the untrained to provide a thin modicum of a sliver of support to the IT professionals amongst us. They hope that we just get fed up and put the phone down.

I use Dell at home, and suffer HP at work. But I'm thankful were moving to a Thin Client environment. No more faulty Hard Disks there. Maybe the odd bust LAN port. But hey - I'll live with it.

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Re: The Tree is Dead

I have the exact reverse - HP has always been much better to me (once even did a 2-day turn around on broken laptop over a weekend during x-mas holidays...) than Dell (my experience mirrors the above script...) over the last 20 years. So much so that I would never, ever buy another Dell, although I might buy an HP. That said, I mostly only use Macs these days which rarely fail and manage to retain their value for more than six months....

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Linux

Re: The Tree is Dead

> Since I am past the age where spending my weekends recompiling the kernel to get sound working, that should tell you something.

It certainly demonstrates your laziness but perhaps not in the way you thought.

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Linux

Re: The Tree is Dead

I have a number of machines that do quite well with only 2G. Unless someone wants to say something extreme like claiming that Windows by itself needs 8G or 16G, then I don't see what the fuss is about here. Not everyone is trying to launch Salvage 1 in their back yard.

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Re: The Tree is Dead

Actually Dell's business support is in Scotland. Dells Enterprise Business support is in Ireland and Scotland. Precision Business support is also in Scotland.

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PCs too good

Much is made of the Tablet boom killing the PC, but in the workplace the real killer of the PC market is the PC itself. With a dual core PC and 2Gb RAM you don't really need a replacement cycle of anything less than five years for many users. If you're employees are on mandatory profiles and standard Office apps / server-based systems a dual core PC will work fine until it packs up. The IT Support team's focus is now on business critical / specialist PC replacements. And when the time does come to replace these PCs, the bottom of the range model will do.

This trend should have been obvious several years ago (it was to me, anyway) but I suspect that the Tablet success obscured the basic change in the PC market.

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I'm guessing its illegal

To just go ahead as planned and take the company private after the shares have tanked then? Seeing as that would save them a fistful of dollars.

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Let me see

The PC makers is building what Microsoft and Intel tell them to build and no-one is buying like they used to.

Maybe they should stop letting two geriatric corporations take all their management decisions for them and start building their own product? Be innovative, creative, and differentiate their offerings from each other?

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What temptation is there?

Really, most PCs are not exciting and the prices they want too high. Like the ~£1k for a basic 1080 line screen.

What happened to anything decent that is not 16:9 crap?

Oh yes, all that is left is the Apple MacBook Pro and Google's new Chromebook Pixel. They might see my money at some time in the near future, not the pedlars of crap stuff to watch DVDs on.

Oh, sorry, no DVD drive any more and still technically illegal to rip my own disk to play it from the HDD...

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The trouble is, all the companies went WOW! People all pay Apple $1000+ for a laptop! We all need to charge that too! Or more because we have WINDOWS!

They never asked us WHY we bought, they told each other over and over it was all "fashion" pure looks. And then they made a pile of plastic Mac lookalikes, See below.

Some fine examples of what I'm saying.

The Lenovo Macbook Pro

http://www.theregister.co.uk/2012/10/25/review_lenovo_ideapad_u410_ultrabook/

And the Dell iMac.

http://www.dell.com/content/topics/segtopic.aspx/inspiron-one?c=us&cs=19&l=en&s=dhs&~ck=mn

The HP Macbook pro, complete with glowing logo on the back of the display.

http://shopping.hp.com/en_US/home-office/-/static/page-envy-notebooks

And when they failed to sell, refused to believe that there wasn't a market. Windows Hardcores don't WANT a pretend Mac, and people who already have Macs are not going to walk into a store and accidentally buy a PC because it looks like a Mac.

They just DON'T get it. And as long as they keep pretending its just about looks, not reliability and customer service, they never will.

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That's one thing you can say about Apple. They to generally provide better quality products. It doesn't really matter that the iPhone 5 was an incremental upgrade and that the iPads are not really "magical" - what they are is decent quality and built with a bit of thought for the end user (HCI).

PC manufactures seem content with just cramming everything on it without thought of how it would be used by the end user (full keyboards with number pads squished on 15" laptops being one of my gripes).

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Linux

It is fashion nonsense....

Yes, it is all fashion nonsense. The problem though is that Apple caters to that kind of person. Apple customers are the kind that are going to buy that nonsense because they are self selecting. You can't project what Apple users will do and apply that to the industry at large.

A Mac-wannabe may fail in the general PC market because non-Apple users likely don't want to buy from Lenovo what they aren't buying from Apple.

PC users care about practical concerns like cost and features and maintainability. They are less willfully ignorant than their Apple counterparts. They are less interested in engaging in conspicuous consumption than their Apple counterparts.

As someone that hasn't bought into the Apple group think, I am much more likely to employ a 5 year old Compaq in place of a brand new Mac Mini. That 5 year old Compaq can be tweaked in ways that makes it much more effective than newer inflexible designs.

That also means that I may not buy a new PC either.

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Unhappy

Actually, this underlines a major problem with many public companies these days. The shareholders want instant maximum profits and are totally averse to risk. Therefore any attempt at diversifying to rescue a failing business is doomed before it starts.

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Those "shareholders" tend be the BODs.

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Mushroom

One last thing....

So you wanna get back into the "value chain" biz?

Then GET RID OF WINDOWS.

License an OS. Any OS. Tune it into something agreeable with SWEAT, PAIN AND BLOOD. But get RID OF WINDOWS. Get RID OF THAT HORRIFIC INTERFACE. Get rid of THAT PILE OF JUNK that needs "ANTIVIRUS", that still doesn't know how to organize files properly in a meaningful hierarchy, is subject to the whims of some sweating overfed kids from marketing, is so NIMBY that it knows about FAT16 but not EXT2 ... in 2013, has a IN-HOUSE BROWSER THAT NEEDS IMMEDIATE REPLACEMENT, is so wobbly that you find trojans ensconced in C:\TMP, needs RESTARTS whenever something kernelish happens (and then may NEVER COME BACK) and is all-round a PITA allied to a LIQUID SANTORUM.

I know you have the cojones beaten out of you by a decade of "Customers Want Windows" sludge and brainwash from Redmond, but BY GOD, IT IS TIME TO WAKE THE HELL UP.

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Happy

Re: One last thing....

Bravo! +1 for the 'liquid santorum'

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Della. Yours is here.

Never forget.

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Meh

Left behind

At least they now see and acknowledge the unremitting brutality of the PC Market, unlike those that still see it as delivering massive growth. Dell and others missed the boat in allowing others to lead innovation and are now paying the price. Getting them all to admit it is quite another but the bottom line is that Michael Dell is making the right move in terms of where he wants Dell to be.

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Anonymous Coward

Re: Left behind

> At least they now see and acknowledge the unremitting brutality of the PC Market, unlike those that still see it as delivering massive growth.

You mean Microsoft...

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