Dell Denies Data

Michael Dell ignores reality when he claims PCs are selling better than tablets all the while tablets are seeing double-digit growth and shipments of Wintel PCs are down or flat depending on where you look. Of course, Dell makes a lot more money selling desktop/notebook PCs than tablets but Dell has missed a lot of revenue as others did better than Dell selling tablets. The key to selling tablets is of course to sell good performance at lower price than the competition. Others are doing that and growing at huge rates.

Clearly, Wintel is a boat-anchor tied to Dell’s neck. He will go down with the ship if he does not free himself from it. ARM, MIPS, GNU/Linux and Android/linux are taking share from Wintel. Dell can deny it for 2011 but it will be too big an effect to ignore in 2012. What will he do then? Chinese manufacturers are shipping in quantity to retailers globally. Dell is a middleman that can be cut out leaving everyone along the supply chain profitable while Dell is losing share.

see The Register – Michael Dell: PC profits plunge not down to tablets

Mobile clients were down 2% and desktop PCs down 6% Q3 2011/2010. see financials

About Robert Pogson

I am a retired teacher in Canada. I taught in the subject areas where I have worked for almost forty years: maths, physics, chemistry and computers. I love hunting, fishing, picking berries and mushrooms, too.
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18 Responses to Dell Denies Data

  1. Dann says:

    *Quantity, sorry

  2. Dann says:

    “Then you write “75million [tablets] sold in 2011. 350million desktop/notebook/netbook PCs sold in 2011.””

    ‘Selling better’ isn’t just about overall quality, it’s about rate of growth as well.

    You are comparing a long-established line of hardware with a new one, see the incongruities there?

  3. ch says:

    Mr Pogson,

    you just did it again: First you write
    “Michael Dell ignores reality when he claims PCs are selling better than tablets all the while tablets are seeing double-digit growth and shipments of Wintel PCs are down or flat depending on where you look.”

    Then you write “75million [tablets] sold in 2011. 350million desktop/notebook/netbook PCs sold in 2011.”

    Obviously, when MD talks about “selling better” he is talking about _absolute_ numbers, and your own figures show that the absolute numbers sold are allmost 5:1 for PCs vs. tablets, so PCs actually _did_ sell better. You are talking mostly relative numbers (growth) which might well mean that in the future tablets will overtake PC sales, but it hasn’t happened yet. So I don’t see which actual data Mr. Dell would deny.

  4. Clarence Moon says:

    I think the non-branded merchandise is most often identical to the branded stuff with just the logos removed or altered to avoid lawsuits. Consider some facts of manufacturing life:

    If you are going to manufacture items in the millions of units, you need substantial infrastructure and processes to run them. Quality is a result of these processes in action. It is the same for shoes, computers, glassware, televisions, cell phones, or tablets. You cannot economically manufacture a knockoff product of a mass market item without establishing the same scale of process. It will cost you more than the product’s price. Try making just a few tablets or computers in your garage by hand to get the idea.

    There may be a low volume of product that came from some flawed process, and would have been scrapped by a reputable manufacturer, on the market, but the bulk of whitebox product is likely to be from the same factories as the branded merchandise, produced in the same way from the same components by the same process.

  5. Phenom says:

    Clarence Moon, I fully agree that branded items, produced in China, bear good quality.

    I meant the no-name brands, which come out cheap and en masse. Generic cases, no logos, just some assembled PCs.

  6. oiaohm says:

    Clarence Moon there are some true knock of stuff in china. There is some true fakes.

    Just like there are true trickster in the USA. Everywhere has there sharks. The bigger the country more sharks. Deal with China be aware it has a huge population so the population for sharks wanting to rip you off is high.

    The most dangerous fake product to turn up in china was fake eggs made from toxic factory waste. Looked like a egg smelt like a egg tasted like a egg but it was killing you.

    Basically treat china with the due care and you can get very decent product from there. If you random-ally buy from china you will most likely find a shark and rip self off badly.

    Some people have had cooling problems with computers from china was because they did not read the computers specs. Computer designed only to operate in a Air conditioned Office does not take too kindly to being in a non Air Conditioned Office. The difference is power effectiveness that is kinda important in china as well. The computer that does not need Air Conditioning needs bigger power-supply and bigger fans.

    It all about doing you homework proper with china. Same people who stuff up ordering from china stuff up from ordering for the white box guy down the street.

  7. Clarence Moon wrote, “Why not claim the prize?”

    I am old and tired, inexperienced in business and I have made my millions. I will leave it to younger folks. China, Brazil, Russia and India have millions of entrepreneurs who can do the job if the Dells of the world will not.

  8. Tim Lovejoy wrote about the prevalence of tablets. Tablets are a newish product in the market. Some retailers still don’t carry them but 75million sold in 2011. 350million desktop/notebook/netbook PCs sold in 2011. Growth rate of tablets is huge while the others are in single digits, percentage-wise. Predictions are that within a year or two they will be all over the place.

    I have a database from Wikipedia that gives some information from User_agent strings from browsers. Assuming anything containing “Tab” or “pad” is a tablet, I get 0.119 million unique visits out of 5.72 million unique visits (1/1000 of one day). That’s a low percentage. It’s even a low percentage of “Android” which is similar to “ipad” but iPad had a year or so head start and it takes time to catch up. It took a year for Android to catch up on smart phones. It will take a bit longer for tablets. I can find hits from just about any tablet known to Man. They are out there and selling.

  9. Clarence Moon says:

    “these Chinese PCs are plagued with hardware issues”

    I don’t think that is a completely true statement. When I turn over my Dell laptop that I am using at the moment, it states “Made in China”. A lot of the equipment sold as white boxes is made on the very same assembly lines using the same components as the branded merchandise sold to Dell, HP, or others.

    There was an expose on CNBC or such a few months ago about the knock-off merchandise coming out of China not really being knock-off in terms of copying, but rather it was simply unauthorized production. Nike orders a million pair of shoes to be made and they are delivered. But the supplier company doesn’t turn off the machines and send the people home when the orders run out, they keep the lines running and steer the output to the counterfeit market. They are the same Nike shoes, just not approved by the brand owner.

    It is not necessarily a quality issue.

  10. rev Tim Lovejoy says:

    Hey Robert.
    I sent Xmas emails to friends and family this year and asked people at the same time to let me know who had a tablet and honestly, its less than 1%.
    of course this means nothing other than an observation but for some time now, people at work keep mentioning the same thing especially since we work in tech and youd figure wed have more contact with the kind of clientele that tablets go for. A few people in the marketing dept have one and one or two VPs. Go out to your families and its not any better. Going to regular soccer and martial arts practices this winter we get to see tons of parents waiting for their kids and at the winter soccer camp there was even more than usual. And there again, the moms and dads have their laptops, their netbooks and phones but I saw only three tablets during those 5 days. One coworker says he plays that VW punch buggy game when he sees one (were you get to punch the person next to you when you spot one) because they are so rare.

    I believe that each gadget has its own use and merits and find it annoying that when a new paradigm is introduced, it always HAS to replace old ones which is why we have the death of desktop-laptops stories non-stop.

    >don’t be so happy about Chinese PCs.

    Arent Apple computers made in China?
    I remember when a friend found out 4yrs ago that his Macbook was being made in China and he kept denying it.
    Pretty sure that most of the fruit toys come from Foxconn which if Im not mistaken is in China.
    You have quality stuff made in China and you have cheap stuff. You have to know the difference.

  11. Clarence Moon says:

    “it would be pretty easy”

    Sure, Mr. Pogson, sure! It is a wonder that everyone does not do that and grab a chunk of Dell’s obscenely high business volume in Windows computers and turn it into a victory for Linux as well as a tidy amount of personal income. A piece of cake, no more than that.

    Rather than laying about waiting for the rain to stop so that you can lay some serious bead, I would think that such an enterprise would be right up your alley. Since you are so nettled by Microsoft’s continued money-making schemes and outraged by their abusive treatment of just about everyone, it would seem like the ideal thing to soothe your ire.

    Why not claim the prize?

  12. oiaohm says:

    Phenom I have sourced from China a lot.

    The issues you are talking about is stupid people. I have see same kinds of issues in USA and Australian white box makers as well.

    There are suppliers in china that can build machines to quality. There are also ones that build crap. It important to know what one you are buying from.

    Price difference for a QA version and a non QA version Phenom 3 dollars. Funny enough 3 dollars cheaper for the QA checked one. Reason its build in a factory without humans. Poor quality stuff is normally still assembled by humans.

    Basically you aquired one that did not last 72 hours on a stress test you paid too much for the complete machine. You deserve to be bitten for not doing you homework properly.

    I bet the machine did not come with a matching QA test with stress test results. 7 day stress test before being shipped on core parts. You can even setup for that to be emailed out in advance of shipping from china for you to read over before approving the machine to be sent.

    Also it is helpful to have a QA service in japan. So item made in china then shipped to japan for quality check then shipped on. Its only a short boat ride for the QA people to go kick the china people tail for poor results.

    Did you have a return on there dime of the machine is not to spec inside 30 days? I guess not Phenom this stops a lot of QA issues dead.

    Yes dealing with china the devil is in the fine print. If the fine print is not good do not buy from them.

    Cost difference between those in china that do the job properly and those that don’t is bugger all. Mostly the ones that do the job properly are more truthful about pricing and charge less over all.

    Sharks exist everywhere. China bigger population more sharks.

  13. Phenom says:

    Pogson, don’t be so happy about Chinese PCs. I can tell you from my own experience, that these Chinese PCs are plagued with hardware issues. Most of them subtle, like insufficient power supplies, causing the system to hang under heavy load, or some incompatibility between the motherboard and the video card, which also makes the system unstable under certain conditions. Overheating is another very common issue. Most of these cheap PCs won’t survive a 72-hour stress test.

    You are doomed to fail by numerous complains and enourmous after-sale support costs.

  14. Dr Loser wrote, “I rather doubt that the local bank will give you the time of day for it.”

    Local banks love me. I have assets. In the old days, when I was young, I used to have to beg banks for a loan. Now I can get a “line of credit” with few questions asked. A shipping container can contain thousands of gadgets and if I wanted to interrupt my retirement to buy one, it would be pretty easy. Retailers do that routinely and they have the infrastructure to sell such products. Probably if the little woman did not have other ideas I would have done that years ago, but for now, I am just a retired old man. I get to do what I want when I want, mostly. Today I blogged, ate breakfast, blogged, ate lunch, went for a walk and somewhere in their watched some “Dexter” on Netflix and blogged some more. Life is good. Next good weather, I plan to do some more welding.

  15. Dr Loser says:

    @Robert:

    One word:

    Logistics. Michael Dell worked that one out at college and has been fanatical about it ever since.

    Much though I like the idea of your Manitoba warehouse of non-name boxen, I rather doubt that the local bank will give you the time of day for it.

  16. Clarence Moon says:

    You leave a lot of stones unturned, Mr. Pogson. It is a wonder to see you carry on, oblivious to the real world around you! How many of those Chinese PCs are in that container and who are you going to sell them to? Do you have enough hours in the day to talk to the folk who might have purchased them and now need some advice on how to proceed? Tech issues are just a minor part of the overall considerations needed to manufacture and distribute PCs to the consumers.

  17. Clarence Moon wrote, “while providing sales, service, financing, design, and various other services”

    There’s the rub. A lot of that can be done in China where it costs less to do. Even service scarcely matters any longer. I cannot remember the last time I or my students asked anyone for service. Many parts of ATX* systems are interchangeable and any teenager with a screwdriver can do that. With FLOSS the teenager can also upgrade the OS and applications quickly and legally for less than Dell would charge.

    I can order a container of PCs from China and receive it in a few weeks ready to sell and if anything breaks I can swap a new unit for less cost than Dell. Who needs service? Linux has far fewer problems than that other OS,too, so there’s less need for service. A modern IT system should include a raft of thin clients which are as reliable as telephones and require no service until the screen resolution becomes insufficient, a decade or more.

  18. Clarence Moon says:

    “Dell is a middleman that can be cut out…”

    Well, if everyone were inclined to contact Singapore or a similar manufacturing contractor area and import their own PCs to their home country while providing sales, service, financing, design, and various other services, then perhaps that man in the middle could be cut out, but it seems like such a lot of work for whatever benefit you claim, Mr. Pogson.

    While you are at it, you could cut out Apple as well. And a host of others.

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