20
Sep 11

Michael Dell’s world of fantasy and delight

Studies  have shown it’s natural and healthy for males to have recurring fantasies. But still, the ones dancing around in Michael Dell’s head may be pushing things.

To hear Michael tell the tale, life is sweet. All this talk of a post-PC world doesn’t phase him. Quite the contrary. With HP leaving the PC business, his eyes light up at the idea of gaining PC market share. So it goes in his recent comments to Financial Times.

Only a few problems with Michael’s logic.

First is the fact that HP decided to get out of PCs for good reason. Even though they sell more PCs than any company on earth, HP believes the smartest thing they can do is abandon ship. That’s because (a) PC profit margins are microscopic, and (b) it’s only going to get worse as PCs continue their descent.

Second, it’s hard to deny that demand for PCs is fading. Not only have the prognosticators lowered their global sales estimates, so has Michael’s own company. It was just one month ago that Dell cut its sales forecasts for PCs, citing “weakening consumer demand” and other causes.

Third, Michael was publicly downplaying his PC sales as recently as April, making sure we were all aware that Dell was now more focused on the enterprise, with PCs only representing one third of their business. The most positive thing he could say about PCs was that Dell made a “modest profit” on them. “I’m just level-setting what Dell is today,” he said.

He speaks optimistically of Dell’s prospects in tablets too—despite the fact that the 5-inch Streak is dead and the 7-inch model is languishing at best. For some reason, Michael’s fantasy here is that things will somehow be different when and if the tablet competition heats up. In fact, Dell will be one of dozens of tablet-makers all sharing the same OS, slugging it out for a sliver of the market.

“We are very distinct from our competitors,” says Michael in that Financial Times interview. Hard to argue with that.

At least IBM and HP stopped having those PC fantasies.

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  • jbelkin

    His limited thinking is that he can find cost cuts and price the DellMikePad $10 cheaper than the ipad, people will flock to it. But as you noted that era is passed mainly because Android is only sellable at $99 and Dell cannot get there and make anything. What’s even funnier is Dell spends $2 billion a year on R&D. Whoever is running that department must have a private island by now …

  • bladrnr

    Dell got into this market years ago. It’s all he’s got. He should have developed a Dell Linux OS back in 1998. He should have seen the handwriting on the wall. That is the difference between Jobs and Dell. One is a visionary. The other is trying to make money selling a commodity based on someone else’s OS. It worked in the ’80s and ’90s. Now, not so much.

  • Ricky Badger

    That must be the new Dell-O-Phone he’s trying to get up to his ear… yeah, they’re in the race fer sure.

  • Atul Barry

    I have a fantasy too: Mr. Dell should sell his company and give money back to shareholders.

  • Bmcfadden

    I still get a good laugh thinking about the horrific marketing for Dell’s “DJ Ditty” — a supposed “iPod killer”. I think Dell has stopped fancying itself as an Apple competitor — though the delusion seems to linger on with tablets. Dell ‘s consumer efforts make Microsoft look visionary, which isn’t saying alot.