um, Ok I didnt ever work with Steve. It just an ancient Lloyd Bentson reference.
But with fancy gaming pc commercials with Devo music, youth targeted ads with Flaming Lips riffs and the entertainment-focused Dell Lounge project, does Michael Dell have a little Steve Jobs envy? Apparently Forbes thinks so, but is pretty sure that Dell ain’t the next Apple:
So far, however, Dell is missing the biggest element in the turnarounds at Apple (nasdaq: AAPL - news - people ) and Hewlett-Packard (nyse: HPQ - news - people ): deep product design teams. Both Apple and H-P appealed to consumers to claw their way out of slumps. Apple, under Chief Executive Steve Jobs, launched catchy new products ranging from all-in-one iMacs to the iPod line of digital music players. Hewlett-Packard, likewise, poured resources into designing slick, retail-friendly PCs to compete on crowded store shelves even as it was slashing jobs and shuttering excess manufacturing capacity. That was good enough to move H-P past Dell to the top spot in the PC business.
Dell, by contrast, has never spent much on research and development. For the fiscal year ending in February 2008, Dell spent $610 million, scarcely more than 1% of its sales, on research and development–and that is up from the prior year. By contrast, H-P spent $898 million, or 3.2% of sales, on R&D for the year ending in January 2008. Likewise, Apple spent $782 million, 3% of its sales, on R&D in the fiscal year ending in September 2007. Even in fiscal 1998, when Apple slashed costs as sales stumbled, the company spent 5.1% of sales on R&D. <more>
An interesting turn of events given you could look back into the executive commentary files and find plenty of quotes from Dell folks that implied that “Apple didn’t matter” to their business. A far cry from where they are now, and perhaps for the first time faced with the need to be a consumer facing brand, and restore it’s brand position.
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Dell claims it is trying to “re-establish itself as a premium brand,” but I don’t think Dell was ever a “premium brand.” Dell sold good computers inexpensively. Like a Wal-Mart, Dell’s innovations came more from creative ways of making computers inexpensively than from any “panache” of having a Dell.
Unfortunately for Dell, everyone else figured out how to make computers inexpensively leaving Dell with nothing to differentiate itself from the competition except pricing. It was a race to the bottom that nobody would win.
Wal-Mart recently tried to move their image “upscale” and gave up–people did not equate Wal-Mart with designer goods. I think it will be much the same with Dell.
ha! peter, I couldn’t agree with you more. I had a similiar beer soaked debate with a good friend and Dell employee around this very topic when they were in teh heyday of “apple doesn’t matter” mode, and brought up that Wal-mart example. They’ll survive, but until they crack any one of these: branding, unique user experience, or cohesive messaging across the enterprise they’ll keep struggling.
…don’t count em out though, look at Target. They were at best a Kmart knock off and totally reinvented themselves. Maybe a bit of fear, profit loss, and competition will put em in a new place.