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Dell
Type Public (NASDAQ: DELL SEHK: 4331)
Founded Austin, Texas (November 4, 1984) (as "PC's Limited")
Headquarters Round Rock, Texas, United States of America
Key people Michael Dell, Founder and CEO
Don Carty, CFO
Industry Computer hardware
Products Desktops
Servers
Notebooks
Peripherals
Printers
Revenue $55.908 Billion USD (2006)
Net income $3.572 Billion USD (2006)
(6.39% profit margin)
Employees 78,000[citation needed]
Subsidiaries Alienware
Website www.dell.com
Dell Inc. (NASDAQ: DELL SEHK: 4331), an American computer-hardware company
based in Round Rock, Texas, develops, manufactures, sells and supports
personal computers, servers, data storage devices, network switches,
personal digital assistants (PDAs), software, televisions, computer
peripherals and other technology-related products. As of 2006, Dell employed
more than 78,700 people worldwide. Formerly holding a substantial lead in
sales of PCs and of servers[citation needed], the company recently slipped
behind Hewlett-Packard (HP) in these markets[citation needed].
In 2006, Fortune magazine ranked Dell as the 25th-largest company in the
Fortune 500 list, 8th on its annual Top 20 list of the most-admired
companies in the United States. A 2006 publication identified Dell as one of
38 high-performance companies in the S&P 500, which consistently
out-performed the market over the previous 15 years.[1]
History
Origins and evolution
While a student at the University of Texas at Austin in 1984, Michael Dell
founded the company as PC's Limited with just $1100[citation needed].
Operating from Michael Dell's off-campus dorm room at Dobie Center [6], the
startup aimed to sell IBM-compatible computers built from stock components.
Michael Dell started trading in the belief that by selling personal computer
systems directly to customers, PC's Limited could better understand
customers' needs and provide the most effective computing solutions to meet
those needs. Michael Dell dropped out of school in order to focus full-time
on his fledgling business.
In 1985, the company produced the first computer of its own design (the
"Turbo PC"), which contained an Intel 8088-compatible processor running at a
speed of 8 MHz. PC's Limited advertised the systems in national computer
magazines for sale directly to consumers, and custom-assembled each ordered
unit according to a selection of options. This offered buyers prices lower
than those of retail brands, but with greater convenience than assembling
the components themselves. Although not the first company to use this model,
PC's Limited became one of the first to succeed with it. The company grossed
more than $73 million in its first year.
In 1989, PC's Limited set up its first on-site-service programs in order to
compensate for the lack of local retailers prepared to act as service
centers. Also in 1987, the company set up its first operations in the United
Kingdom; eleven more international operations followed within the next four
years. In June 1988, Dell's market capitalization grew by $30 million to $80
million from its initial public offering of 3.5 million shares at $8.50 a
share. The company changed its name to "Dell Computer Corporation" in 1988.
In 1990, Dell Computer Corporation tried selling its products indirectly
through warehouse-clubs and computer-superstores, but met with little
success, and the company re-focused on its more successful
direct-to-consumer sales model. In 1992, Fortune magazine included Dell
Computer Corporation in its list of the world's 500 largest companies.
In 1996, Dell began selling computers via its web site.
In 1999, Dell overtook Compaq to become the largest seller of personal
computers in the United States of America with $25 billion in revenue
reported in January 2000.
In 2002, Dell attempted to expand by tapping into the multimedia and
home-entertainment markets with the introduction of televisions, handhelds,
and digital audio players. Dell has also produced Dell-brand printers for
home and small-office use. Michael Dell stepped aside as Chief Executive
Officer (CEO) on July 16, 2004, but retained his position as Chairman of the
Board. Kevin B. Rollins, who had held a number of executive posts at Dell,
became the new CEO.
In 2003, at the annual company meeting, the stockholders approved changing
the company name to "Dell Inc." to recognize the company's expansion beyond
computers.
In 2004, the company announced that it would build a new assembly-plant near
Winston-Salem, North Carolina; the city and county provided Dell with $37.2
million in incentive packages; the state provided approximately $250 million
in incentives and tax breaks.
In 2005, the share of sales coming from international markets increased, as
revealed in the company's press releases for the first two quarters of its
fiscal 2005 year. In February 2005 Dell appeared in first place in a ranking
of the "Most Admired Companies" published by Fortune magazine. In November
2005 BusinessWeek magazine published an article titled "It's Bad to Worse at
Dell" about shortfalls in projected earnings and sales, with a
worse-than-predicted third-quarter financial performance — a bad omen for a
company that had routinely underestimated its earnings. Dell acknowledged
that faulty capacitors on the motherboards of the Optiplex GX270 and GX280
had already cost the company $300 million. The CEO, Kevin Rollins,
attributed the bad performance partially to Dell's focus on low-end PCs.
In 2006, Dell purchased the computer hardware manufacturer Alienware. Dell
Inc.'s plan anticipated Alienware continuing to operate independently under
its existing management. Alienware expected to benefit from Dell's efficient
manufacturing system.[2]
On January 31, 2007, Kevin B. Rollins, CEO of the company since 2004,
resigned abruptly as both CEO and as a director, and Michael Dell returned
to the CEO role. Investors and many shareholders had called for Rollins'
resignation because of poor company performance. At the same time, the
company announced that, for the fourth time in five quarters, earnings would
fail to reach consensus analyst-estimates.
In February 2007, Dell became the subject of formal investigations by the US
SEC [3] and the US Attorney General for the Southern District of New York.
[4] The company has not formally filed financial reports for either the
third or fourth fiscal quarter of 2006, and several class action lawsuits
[5] in the wake of its recent financial performance. The company's lack of
formal financial disclosure would normally subject the company to de-listing
from the NASDAQ, [6] but the exchange has granted Dell a waiver, allowing
the stock to trade normally. [7]
On 1 March, 2007, the company issued a preliminary quarterly earnings report
which showed gross sales of $14.4 billion, down 5% year-over-year, and net
income of $687 million (30 cents per share), down 33%. Net earnings would
have declined even more if not for the effects of eliminated employee
bonuses, which accounted for six cents per share. NASDAQ extended the
company's deadline for filing financials to May 4. [8]
Dell and AMD
On August 17, 2006, a Dell press-release stated that starting in September
2006, Dell Dimension desktop computers would have AMD processors and that
later in the year Dell would release a two-socket, multi-processor server
using AMD Opteron processors, moving away from using Dell's traditional
Intel processors.
CNet's News.com on August 17, 2006 cited Dell's CEO Kevin Rollins as
attributing the move to AMD processors to cost-advantage and to AMD
technology. AMD's senior VP in commercial business, Marty Seyer, stated:
"Dell's wider embrace of AMD processor-based offerings is a win for Dell,
for the industry and most importantly for Dell customers."
On October 23, 2006, Dell announced two new AMD-based servers — the
PowerEdge 6950 and the PowerEdge SC1435 — marking its entry into the
AMD-based server market.
On November 1, 2006, Dell's website began offering notebooks with AMD
processors (the Inspiron 1501 with a 15.4" display) with the choice of a
single-core MK-36 processor, dual-core Turion X2 chips or Mobile Sempron.
Dell and desktop Linux
First attempt in 2000
In 1998, Ralph Nader asked Dell (and 5 other major OEMs) to offer alternate
operating systems to Microsoft Windows, specifically including Linux, for
which "there is clearly a growing interest"[9][10] Dell started offering
Linux notebook systems which "cost no more than their Windows 98
counterparts" in 2000,[11] and soon expanded, with Dell becoming "the first
major manufacturer to offer Linux across its full product line"[12] But by
early 2001 Dell had "disbanded its Linux business unit".[13]
The reason(s) for such a quick reversal remain the subject of debate. Court
documents accused Microsoft of coercing OEMs to drop Linux:
Microsoft executive Joachim Kempin described his plan of retaliation and
coercion to shut down competition from Linux: "I am thinking of hitting the
OEM harder than in the past with anti-Linux actions" and will "further try
to restrict source code deliveries where possible and be less gracious when
interpreting agreements — again without being obvious about it," continuing
"this will be a delicate dance"[14]
While in a 2003 interview Michael Dell denied that Microsoft pressured Dell
Inc. into doing an about-face with regard to desktop Linux, citing a lack of
sales: "unfortunately the desktop Linux market didn't develop in volume.
It's more of a server opportunity" but adding: "We continue to offer Linux
on the desktop and there is nothing else to say."[15] However, a 2004 report
noted that Dell no longer offered preinstalled desktop Linux:
So what does it mean "factory installed Linux"? If you want Dell to install
Linux for you, first add on $119. But here is the annoying part. They won't
send you a computer with Linux pre-installed. They sell you the computer and
the boxes of software on the side, and then they make an appointment to send
you someone who comes to your house or business and installs it there.[16]
A new attempt starting in 2007
On February 26, 2007, Dell announced that it had commenced a program to sell
and distribute a range of computers with pre-installed Linux distributions
instead of Microsoft Windows. Dell indicated that Novell's SUSE Linux would
appear first.[17] However, Dell on February 27, 2007 announced that its
previous announcement related to certifying the hardware as ready to work
with Novell SUSE Linux and that it (Dell) had no plans to sell systems
pre-installed with Linux in the near future.[18] On March 28, 2007, Dell
announced that it would begin shipping some desktops and laptops with Linux
pre-installed, although it did not specify which distribution of Linux or
which hardware would lead.[19] On April 18, 2007 a report appeared to the
effect that Michael Dell used Ubuntu Linux on one of his home systems.[20]
On May 1, 2007, Dell announced it will ship the Ubuntu Linux
distribution.[21] On May 24, 2007, Dell started selling models with Ubuntu
Linux 7.04 pre-installed: a laptop, a budget computer, and a high-end
PC.[22] On June 27, 2007, Dell announced on its Direct2Dell blog that it
planned to offer more pre-loaded systems (the new Dell Inspiron desktops and
laptops). After the IdeaStorm site supported extending the bundles beyond
the US market, Dell later announced more international marketing.
Michael Dell's return
On January 31 2007 Michael Dell returned to the company as CEO. As chairman
of the board, Mr. Dell had had significant input into the company's
operations during Rollins' years as CEO. However with the return of Michael
Dell as CEO, the company saw immediate changes in operations, the exodus of
many senior vice-presidents and new blood brought in from outside the
company.
Departures announced include:
* Kevin Rollins, CEO[23]
* James Schneider, CFO[24]
* John Medica, senior vice president, consumer products[25]
* Joe Marengi, senior vice president, Americas[26]
* John Hamlin, senior vice president, worldwide online operations[27]
* Paul McKinnon, senior vice president, human resources[28]
* Rosenda Parra, senior vice president/general manager, home & small
business group[29]
* Glenn E. Neland, senior vice president, procurement[30]
Additions announced include:
* Michael Dell, CEO and co-Chairman of the Board (previously Chairman of the
Board)
* Don Carty, CFO and co-Chairman of the Board (previously Board member)
* Michael R. Cannon, former CEO of Solectron, as President, Global
Operations[31]
* Ron Garriques, who formerly headed Motorola's mobile phone unit, as
President, Global Consumer Group[32]
* Stephen F. Schuckenbrock, Senior Vice President, Global Services[33]
Mr. Dell announced a number of initiatives and plans (part of the "Dell 2.0"
initiative) to improve the company's financial performance. These include:
* elimination of 2006 bonuses for employees with some discretionary awards
* reduction in the number of managers reporting directly to Mr. Dell from 20
to 12
* in a noted departure from previous years, "build, partner, and buy" to
increase services capabilities
* reduction of "bureaucracy"
Dell, Inc. appears to have re-focussed on reduced costs rather than on
innovation, in line with the company's history of delivering units at the
lowest cost possible via its direct-sales model. In an interview with
Business Week, Mr. Dell stated "this is a company which can execute quite a
bit better on things it already knows how to do."[34]
Products
Scope and brands
The corporation markets specific brand names to different market segments:
* Business Class: including OptiPlex, Latitude, and Precision, where the
company's advertising emphasizes long life-cycles, reliability and
serviceability:
* OptiPlex for office Desktop computer systems
* Dell N-Series - Desktop and notebook computers shipped with Linux or
FreeDOS installed
* Vostro for notebooks and desktop systems focused on small-business
cusomers
* Latitude for commercially-focused notebooks
* Precision for workstation systems and high-performance notebooks
* PowerEdge for larger corporate servers
* PowerVault for direct-attach and some network-attached storage (NAS)
* Dell PowerConnect for network switches
* Dell EMC for storage area networks ( SANs)
* Home/Consumer Class: including Dimension, Inspiron, and XPS brands,
emphasizing value, performance and expandability:
* Inspiron for consumer desktop and notebook systems
* XPS for enthusiast/high-performance systems
* Peripherals: Dell has also diversified its product line to include
peripheral products such as USB keydrives, LCD televisions, and printers.
* Dell monitors LCD/plasma TVs and projectors for HDTV and monitor
* Services and support:
* Dell On Call - extended support services (mainly for the removal of
spyware and of viruses)
* Dell Solution Center - extended support services similar to Dell On Call
for EMEA customers.
* Dell Business Support - a service contract (for a fee) that provides an
industry-certified technician with a lower call-volume than in normal
queues. Covers hardware, and some software support.
* Discontinued Products:
* Dimension home and small office/home office desktop (discontinued July
2007).
* Axim for PDAs utilizing Microsoft's Windows Mobile (discontinued April 9,
2007[35])
* Dell DJ line of MP3 players (discontinued August 2006)
* Dell PowerApp line of Application based severs
Dell also offers Red Hat and SUSE Linux for servers; as well as "bare-bones"
computers without pre-installed software (N series by default and by request
on XPS and Inspiron systems) at significantly lower prices. Due to Dell's
licensing-contract with Microsoft, Dell cannot offer those systems on their
website and customers have to request them explicitly. Dell has to ship such
systems with a FreeDOS disk included in the box and must issue a so-called
"Windows refund" or a merchandise credit after sale of the system at the
"regular" retail price.
Manufacturing
Dell has a general policy of manufacturing its products close to their
customers, implementing Just in Time (JIT) Manufacturing. Assembly for
desktop computers for the North American market takes place at Dell plants
in Lebanon, Tennessee, Austin, Texas, and Winston-Salem, North
Carolina[citation needed]; with servers built in Austin, Texas.
Dell assembles computers for the EMEA market in Limerick in the Republic of
Ireland, and employs about 4,500 people in that country. European
Manufacturing Facility 1 (EMF1, opened in 1990) and EMF3 form part of the
Raheen Industrial Estate near Limerick. EMF2 (previously a Wang facility,
situated in Castletroy) has since closed, and Dell Inc has consolidated
production into EMF3 (EMF1 now contains only offices[36]). Construction of
EMF4 in Łódź, Poland has started, with production planned to start there in
autumn 2007.[37]
Dell's assembly-plants in Malaysia, China assemble 95% of Dell notebooks.
Dell Inc has invested an estimated 60 billion US Dollars in a new
manufacturing unit in Chennai, India, to support the sales of its products
in the Indian Subcontinent. Indian-made products will bear the "Made in
India" mark on them. In 2007 the Chennai facility has the target of
producing 400,000 desktop PCs, and in the later half of 2007 it will start
producing notebook PCs and other products.[citation needed]
Technical support
Dell Inc routes technical support queries according to component-type and to
the level of support purchased with each unit sold. Currently Dell offers
four levels of customer supportand encourages customers to educate
themselves on the differences between these service types.
Dell Inc brands its service-agreements at four levels:
1. Basic
2. Silver
3. Gold
4. Platinum Plus
Regardless of the level of service-agreement, Dell's agents rigorously
follow a specific troubleshooting procedure. Controversy has developed
around this area when knowledgeable computer users have already troubleshot
the equipment and know the source of the problem. Since Dell policy requires
the technicians to always follow this procedure, resolution-time can take
longer than expected. Some IT departments have even calculated times to
place Dell agents on hold when callers are required to perform tests that
customer-staff have already carried out prior to calling.
To reduce costs[citation needed], Dell began moving technical support
offshore, however this has resulted in quality of service concerns.
At Dell's higher levels of support, benefits can purportedly include shorter
wait-times, faster time-to-resolution, and better-experienced
support-technicians. While Dell has added call-center staff in North
America, it still routes the majority of service-support calls to India and
to the Philippines.
Service Tags
Dell Inc associates a Service Tag, a unique alpha-numeric word, with most of
its products, this resembles a serial number. Given numerous different
made-to-order PCs, the company needs a way to identify systems in its
database in order to provide support for them. The service-tag number,
represented in Base 36, has a length of five or seven characters.
Dell, Inc. does not tag its monitors. Monitors bought as part of a system
get support via the tag of the system itself. Monitors bought separately get
support via the Dell Order Number or via the monitor's serial number.
DellConnect
The DellConnect program, a remote-access tool, gives technicians within Dell
Support the ability to access customer computers from a remote location for
troubleshooting purposes. By utilizing this tool, support-technicians can
analyze the configuration of a system, view and edit its files and software
environment, view and comment on the screen, or take control of the system
(with the customer's approval) for troubleshooting purposes.
Recently, Dell Inc replaced its proprietary remote-access tool with the
newer DellConnect 2.0www.dellconnect.com manufactured by Citrix. Once
installed by the customer, this software can permit a support-technician to
view and work on their computer from a remote location. This permits the
technician to work virtually at a customer's computer, without requiring
physical attendance. As with the previous version, release 2.0 has a feature
of letting the technician reboot the system remotely and continuing the same
session. Version 2.0 adds the functionality of being able to copy
information from the technician's clipboard and paste it to the customer's
clipboard. This makes redirecting a user to a long website (for example)
very easy.
World-wide technical support
In the Americas, Dell has customer-contact centers in Edmonton, Alberta;
Ottawa, Ontario; Central Texas; Salt Lake City, Utah; Nashville, Tennessee;
Chesapeake; Roseburg, Oregon; Twin Falls, Idaho; Oklahoma City, Okla; San
Salvador, El Salvador; as well as Glace Bay, Nova Scotia and Panama City,
Panama.
In the Asia-Pacific region Dell provides customer-support from Pasay City,
Philippines; Penang, Malaysia; and Xiamen and Dalian, China. Dell recently
opened its second Philippines site in Quezon City. [38]
In India, Dell has customer-support centers in the northern cities of
Gurgaon and Mohali; and in the southern cities of Hyderabad and Bangalore.
[39]
Commercial aspects
Business-model
Dell sells all its products both to end-use consumers and to corporate
customers, using a direct-sales model via the Internet and the telephone
network. Dell maintains a negative cash conversion cycle through use of this
model: in other words, Dell Inc. receives payment for the products before it
has to pay for the materials. Dell also practices just-in-time (JIT)
inventory-management, profiting from its attendant benefits. Dell’s JIT
approach utilizes the “pull” system by building computers only after
customers place orders and by requesting materials from suppliers as needed.
In this way Dell mirrors Toyota by following Toyota Way Principle #3 ("Use
'pull' systems to avoid overproduction"). Since the days of the original
dominance of telephone-ordering, the Internet has significantly enhanced
Dell’s business-model, making it easier for customers and potential
customers to contact Dell directly. This model also has enabled Dell to
provide very customizable systems at an affordable rate, since Dell
manufacturing builds specifically for each customer. Other
computer-manufacturers, including Gateway and Hewlett-Packard, have
attempted to adapt[citation needed] this same business-model, but due to
timing and/or retail-channel pressures[citation needed] they have not
achieved the same results as Dell.
Organization
A Board of Directors of nine people runs the company. Michael Dell, the
founder of the company, serves on the board. Other board members include Don
Carty, William Gray, Judy Lewent, Klaus Luft, Alex Mandl, Michael A. Miles,
and Sam Nunn. Shareholders elect the nine board members at meetings, and
those board members who do not get a majority of votes must submit a
resignation to the board, which will subsequently choose whether or not to
accept the resignation. The board of directors usually sets up five
committees which have oversight over specific matters. These committees
include the Audit Committee, which handles accounting issues, including
auditing and reporting; the Compensation Committee, which approves
compensation for the CEO and other employees of the company; the Finance
Committee, which handles financial matters such as proposed mergers and
acquisitions; the Governance and Nominating Committee, which handles various
corporate matters (including nomination of the board); and the Antitrust
Compliance Committee, which attempts to prevent company practices from
violating antitrust laws.
The corporate structure and management of Dell extends beyond the board of
directors. The Dell Global Executive Management Committee sets the strategic
direction for how the corporation keeps customers at the forefront, from
designing and manufacturing computer systems to offering products that meet
customers' requirements to providing sufficient service and support. Dell
has regional senior vice presidents for countries other than the United
States, including David Marmonti for EMEA and Stephen J. Felice for
Asia/Japan. As of 2007, other officers include Martin Garvin (senior vice
president for worldwide procurement) and Susan E. Sheskey (vice president
and chief information officer).
Marketing
Dell advertisements have appeared in several types of media including
television, the Internet, magazines, catalogs and newspapers. Some of Dell
Inc's marketing strategies include lowering prices at all times of the year,
offering free bonus products (such as Dell printers), and offering free
shipping in order to encourage more sales and to stave off competitors. In
2006, Dell cut its prices in an effort to maintain its 19.2% market share.
However, this also cut profit-margins by more than half, from 8.7 to 4.3
percent. To maintain its low prices, Dell continues to accept most purchases
of its products via the Internet and through the telephone network, and to
move its customer-care division to India and El Salvador.[citation needed]
A popular United States television and print ad campaign in the early 2000s
featured the actor Ben Curtis playing the part of "Steven," a lightly
mischievous blond-haired kid who came to the assistance of bereft computer
purchasers. Each television advertisement usually ended with Steven's
catch-phrase: "Dude, you're gettin' a Dell!"
A subsequent advertising campaign featured interns at Dell headquarters
(with Curtis' character appearing in a small cameo at the end of one of the
first commercials in this particular campaign).
A Dell advertising campaign for the XPS line of gaming computers featured in
print in the September 2006 issue of Wired Magazine. It used as a tagline
the common term in Internet and gamer slang: "FTW", meaning "For The Win".
However, Dell Inc. soon dropped the campaign.
Dell Kiosks
In the early 2000s, Dell opened kiosk locations in shopping malls across the
United States in order to give personal service to customers who preferred
this method of shopping, compared to using the Internet or telephone.
Despite the added expense, prices at the kiosks are equal or less than
prices available through other retail channels. Starting in 2005, Dell
expanded kiosk locations to include shopping malls across Australia, Canada
and Hong Kong.
Dell Stores
In 2006, Dell Inc. opened a full store in Northpark Center in Dallas, Texas.
It operates the 3,000-square-foot Dallas outlet seven days a week and to
display about 36 models, including PCs and televisions. Like the kiosks,
customers can only see demonstration computers and place orders through
agents. Purchased items are then delivered just as if the customer placed
the order over the phone or internet. Dell Inc plans to use the Dallas store
to house about three times as many products as it displays in more than 160
kiosks in malls and airports. In addition to showcasing products, the store
also supports on-site warranties or non warranty service ("Dell on Call").
Services offered include repairing computer video-cards and removing spyware
from hard drives.
Environmental Responsibility
Dell was the first in the information technology industry to establish a
product recycling goal in 2004 and completed the implementation of its
global consumer recycling program in 2006. [40] On February 6, 2007, the
National Recycling Coalition awarded Dell its “Recycling Works” award for
efforts to promote producer responsibility. [41] On July 19, 2007, Dell
announced that it is ahead of schedule to achieve a multi-year goal of
recovering 275 million pounds of computer equipment by 2009. [42] The
company reported the recovery of 78 million pounds (nearly 40,000 tons) of
IT equipment from customers in 2006, a 93 percent increase over 2005 and
12.4% of the equipment Dell sold seven years earlier. [43]
On June 5, 2007, Dell set a goal of becoming the greenest technology company
on earth for the long term. The company launched a zero-carbon initiative
that includes:
1) Reducing Dell’s carbon intensity by 15 percent by 2012
2) Requiring primary suppliers to report carbon emissions data during
quarterly business reviews
3) Partnering with customers to build the “greenest PC on the planet”
4) Expanding the company’s carbon-offsetting program, “Plant a Tree for Me”
The company introduced the term “Re-Generation” during a roundtable in
London commemorating 2007 World Environment Day. “Re-Generation” refers to
people of all ages throughout the world who want to make a difference in
improving the world’s environment. Dell also talked about plans to take the
lead in setting an environmental standard for the technology industry and
maintaining that leadership in the future.
Competition
Dell's major competitors include Apple, Hewlett-Packard, Sun Microsystems,
Gateway, Lenovo, Sony, Acer, Toshiba and Asus. Dell and its subsidiary,
Alienware, compete in the enthusiast market against Falcon Northwest, Voodoo
PC (a division of HP), and other manufacturers. In the second quarter of
2006, Dell had between 18% and 19% share of the worldwide personal-computer
market, compared to Hewlett-Packard with roughly 15%. By leveraging its
business-model, Dell attempts to undercut competitors and offer customers a
more attractive choice of personal computers and other equipment.
Dell in late 2006 lost its once-substantial lead in the PC business to
Hewlett-Packard. Both Gartner and IDC estimated that in the third quarter of
2006, HP shipped more units world-wide than did Dell. Dell's 3.6% growth
paled in comparison to HP's 15% growth during the same period. The problem
got worse in the fourth quarter, when Gartner estimated that Dell PC
shipments declined 8.9% (versus HP's 23.9% growth). As a result, at the end
of 2006 Dell's overall PC market share stood at 13.9% (versus HP's 17.4%).
IDC has also reported that Dell lost more server market share than any of
the top four competitors in that arena. IDC's Q4 2006 estimates show Dell's
share of the server market at 8.1%, down from 9.5% in the previous year.
This represents a 8.8% loss year-over-year, primarily to competitors EMC and
IBM.[44]
"Shut down Apple"
Dell conducted a public war-of-words with Apple CEO Steve Jobs, starting
when Jobs first criticized Dell for making "un-innovative beige boxes". On
October 5, 1997, when asked what he would do if he owned then-troubled Apple
Computer, Michael Dell said "I'd shut it down and give the money back to the
shareholders."[45]
Lawsuits & other legal action
* In 2005, Dell began the construction of a facility in Winston-Salem, North
Carolina. [46]Many claims emerged that Dell had used unfair practices to
obtain huge incentives.[47]Dell fought a lawsuit which the court system
later dismissed.[48]
* In October 2005, Dell filed a lawsuit in a Paris court to sue
Menorca-based independent website-designer Paul Dell "Dellimages" for
engaging in “parasitism and unfair competition”. This related to his company
website "DellWebsites".
* On January 31, 2007, some shareholders filed a lawsuit accusing Dell and
Intel of conspiring, and accusing Dell executives (including Michael Dell)
of options-backdating and of propped financial reports.
* On February 8, 2007, seven current and former workers at a call-center in
Roseburg, Oregon sued the computer-maker, saying the company worked its
sales reps "off the clock", failed to provide proper rest-breaks and
improperly recorded their lunch-periods.[49] Moves have begun to turn the
case into a class action.
* In May 2007, New York Attorney General, Andrew Cuomo, filed a lawsuit
against Dell for "false advertising and deceptive business practices,
including offering misleading financing, and failing to honor rebates,
warranties and service contracts." [7] Dell spokesman Bob Pearson portrayed
the lawsuit as based on only a small portion of Dell's customers and as in
no way reflecting the way the company treats its customers. Dell's
hardware-warranty contract says that customers must troubleshoot over the
phone — including possibly opening the computer — before Dell will send a
technical service provider to replace a part.
Criticisms
In the 1990s Dell switched from using primarily ATX motherboards and PSU, to
using boards and power-supplies with mechanically-identical but
differently-wired connectors.[50][51]
In 2005, according to the Better Business Bureau, complaints about Dell more
than doubled, to 1,533.
Consumer complaints about the quality of customer-service mounted, and in
2006, Dell acknowledged that it had problems with customer service. Issues
included call transfers[52]of more than 45% of calls and long wait-times.
Dell's blog detailed the response[53]: "We’re spending more than a $100
million — and a lot of blood, sweat and tears of talented people — to fix
this." Later in the year, the company increased its spending on customer
service to $150 million.[54]
In 2006, Dell and Sony recalled over 4.2 million notebook batteries after
the discovery of flaws that could cause the Sony-manufactured batteries to
overheat and catch fire. Subsequent announcements by almost every major
laptop manufacturer in the world (including Apple, Lenovo, Toshiba, Hitachi
and Fujitsu) led to a recall of nearly 9.6 million Sony-manufactured
batteries and led Sony executives to apologize on October 24, 2006 for the
inconvenience.
References
* Michael Dell, Catherine Fredman, Direct From Dell, ISBN 0-88730-914-3
* Andy Serwer, (November 28, 2005). Dell's Midlife Crisis, Fortune, pages.
63 - 66.
* Dell as the seventh-most-admired computer company in the USA, eighth
overall, and seventh worldwide. Fortune, Most Admired Companies 2006.
* Dell Named Top Computer Hardware Provider for Life Sciences. Reuters
* Dell Ottawa references:
o CNWGroup news website
o Dell official website
o Ottawa Business Journal
* BBC News, 21 August 2003, Dell makes grab for market share
* USA Today, 20 January 2001, Dell business model turns to muscle as rivals
struggle
* Ubuntu Forums, 7 June 2007,
Dell's with Ubuntu called Dellbuntu
Notes
1. ^ Frigo, Mark L, Needles, Belvard E and Marian Powers: "Strategy and
Integrated Financial Ratio Performance Measures: Further Evidence of the
Financial Performance Scorecard and High Performance Companies". Studies in
Managerial and Financial Accounting Volume 16, (2006)
2. ^ Lee, Louise. "Dell Goes High-end and Hip", BusinessWeek, March 23,
2006.
3. ^ http://www.computerworld.com/action/article.do?command=viewArticleBasic&articleId=9002535&source=rss_news50
4. ^ [1]
5. ^ http://www.dallasnews.com/sharedcontent/APStories/stories/D8N1MLNO0.html
6. ^ http://www.crn.com/showArticle.jhtml?articleID=193004297
7. ^ http://www.crn.com/sections/breakingnews/dailyarchives.jhtml?articleId=196903036
8. ^ [http://www.thestreet.com/_yahoo/newsanalysis/techhardware/10341935.html
9. ^ James Love (Information Policy Notes) (March 8, 1998). Nader/CPT ask
OEMs to offer OS alternatives".
10. ^ Consumer Project on Technology (Internet Archive from November 6,
2002). CPT's Microsoft Antitrust Page.
11. ^ Dan Neel (CNN) (February 3, 2000). Dell offers Linux on laptops.
12. ^ Michael Dell (August 15, 2000). Michael Dell Remarks/Putting Linux on
the Fast Track/Keynote at the LinuxWorld Expo".
13. ^ Andrew Orlowski (The Register) (March 19, 2002). Microsoft ‘killed
Dell Linux’ – States.
14. ^ Plaintiffs' Modified Fourth Amended Petition (February 8, 2006). Joe
Comes, et al vs Microsoft Corporation.
15. ^ Ashlee Vance (InfoWorld) (January 14, 2003). Interview: Dell eyes
Linux future despite desktop retreat.
16. ^ Pamela Jones (Groklaw) (September 20, 2004). Standards, Dell and
Microsoft.
17. ^ http://www.itwire.com.au/content/view/9951/53/
18. ^ Computerworld (February 27, 2007). Dell to Linux users: Not so fast".
19. ^ http://www.dell.com/content/topics/global.aspx/ideastorm/ideasinaction?c=us&l=en&s=gen
20. ^ Steven J. Vaughan-Nichols (DesktopLinux) (April 18, 2007). Michael
Dell's Linux choice? Ubuntu.
21. ^ BBC (May 1, 2007). Dell to choose Ubuntu".
22. ^ http://direct2dell.com/one2one/archive/2007/05/24/15994.aspx http://linux.dell.com/
23. ^ http://www.crn.com/sections/dell/dell.jhtml?articleId=197002299
24. ^ http://www.crn.com/sections/dell/dell.jhtml?articleId=197002299
25. ^ http://www.statesman.com/business/content/business/stories/technology/02/14/14dell.html
26. ^ http://www.statesman.com/business/content/business/stories/technology/02/14/14dell.html
27. ^ http://biz.yahoo.com/bizj/070214/1417329.html?.v=3
28. ^ http://www.statesman.com/business/content/business/stories/technology/02/14/14dell.html
29. ^ http://www.statesman.com/business/content/business/stories/technology/02/17/17dell.html
30. ^ http://www.nytimes.com/2007/02/17/business/17dell.html?em&ex=1171947600&en=89394cd8cc59606c&ei=5087%0A
31. ^ http://www.statesman.com/blogs/content/shared-gen/blogs/austin/theticker/index.html
32. ^ Gollner, Philipp, Ritsuko Ando. "Dell hires Motorola executive for
consumer unit", SAN FRANCISCO (Reuters), Reuters.com, 2007-02-16. Retrieved
on 2007-06-22.
33. ^ http://www.nytimes.com/2007/02/17/business/17dell.html?em&ex=1171947600&en=89394cd8cc59606c&ei=5087%0A
34. ^ http://www.businessweek.com/technology/content/jan2007/tc20070131_257826.htm?chan=search
35. ^ Direct2Dell.com
36. ^ http://www.blythe.org/nytransfer-subs/2000ire/IEP:_The_IE_Professional_No.250_5-17
37. ^ http://www1.euro.dell.com/content/topics/topic.aspx/emea/corporate/pressoffice/2006/uk/en/2006_09_18_brk_000?c=uk&l=en&s=corp
38. ^ http://www.allheadlinenews.com/articles/7006608869
39. ^ http://ipcommunications.tmcnet.com/news/2006/10/06/212847.htm
40. ^ http://www.socialfunds.com/news/article.cgi/1421.html
41. ^ National Recycling Coalition
42. ^ http://biz.yahoo.com/ap/070719/tx_dell_recycling.html?.v=1 }}
43. ^ [http: http://www.dell.com/content/topics/global.aspx/corp/pressoffice/en/2007/2007_07_19_rr_001?c=us&l=en&s=corp
Dell Inc.]
44. ^ http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20070312:MTFH05034_2007-03-12_21-17-33_N12385967&type=comktNews&rpc=44
45. ^ CNet
46. ^ http://www.findarticles.com/p/articles/mi_m0EIN/is_2005_Oct_25/ai_n15732802
47. ^ http://www.theregister.co.uk/2005/06/23/dell_nc_suit
48. ^ http://www.newsobserver.com/104/story/438280.html
49. ^ http://atwork.blogs.oregonlive.com/uploads/487501-dellsuit.pdf
50. ^ [2]
51. ^ Mueller, Scott. Upgrading and Repairing PCs, 13ed, Indianapolis: Que
Publications, 2002, ISBN 0789725428, and subsequent editions
52. ^ [3]
53. ^ [4]
54. ^ [5]
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