Why Is Dell Trying to Compete With the iPod? 15 comments
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Wednesday morning’s Wall Street Journal says that Dell is readying a new MP3 player to compete with the iPod. Unlike its failed effort in 2003, this would also include a client application and download service for both music and video. As CNET notes, the Page B1 article makes a nice trial balloon.
It seems like Michael Dell dreams of surpassing Steve Ballmer’s success with the Zune. In the US, Apple has 70+% and Microsoft has 4% (Both Apple and Dell are much less influential overseas, so Dell has to hope that he can first gain US market share.)
To make this work, Dell would have to move from assembling products from standard parts to being able to do its own systems integration. Of course, that is why they bought Zing last year (presumably for something close to $50 million).
It’s not completely clear, but providing its own service would appear to shift to a differentiation strategy — away from its historic strength as a low-cost, commodity producer with low R&D. It certainly is part of an ongoing (and mostly unsuccessful) effort to achieve a consumer market share comparable to what it has with big business.
Why is Dell doing this? The story brings to mind a song by my favorite band: I Can’t Tell You Why.
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This article has 15 comments:
They are watching market share inexorably shift to Apple. Now it is slow, but they see it for what it is - a shifting of tectonic plates.
So they see that if they do not want to continue this escalating shift to Apple, then they need to put a dent in the Apple ecosystem. The only way to stop Apple is to develop an alternative that will keep users from the Apple experience. They are not attacking iPod per se, they are trying to break the halo.
IMHO
Dell: “Apple has become the conformist company”
counternotions.com/200.../
Dell has a hard lesson to learn - marketing efforts in a market where you don't dominate create more business for the market leader than they do for you. The people who were only thinking "Dell" start thinking "music", then they actually look at the alternative.
This just re-emphasises that the Dell/Microsoft era is over, and consumers will realise they need to widen their horizons.
They'll never launch this product, but thankfully, RE is one year nearer retirement.
Sorry to be mean hearted, but the guy really is a mendacious idiot...
so now Dell has colors on its laptop. big deal. you can buy skins for mac laptops to change the color. and Dell spent so much $ trying to get the paint right..it's taken them a year to figure it out! but Macs came in colors YEARS ago when these other companies ignored Apple, and now they're trying to play catch up when it's very late in the day. teutonic shifts indeed and the very early tremors are just being felt.
and the most innovative developers are waking up and turning to Apple, which is one of the only tech stocks/ companies that has all the qualifications of a Buffet 'moat'. this means that everyone else will have to throw huge amounts of money around in an attempt to cross the moat and storm the drawbridge. sorry, folks, it's not going to happen. ' there be dragons' in the moat and the drawbridge is already up!
The reason they are doing this is because they are desperate. But I think their customers will remember the dell DJ, and how Dell and MSFT both left them high and dry on that one. Also, MSFT is about to abandon the Zune, according to it's biggest fans. Dell will never be able to partner with Apple, so that leaves them with no option for bundling a music player in that all important young demographic.
Who knows, if Dell could have a decent player and Linux could make massive strides, they could even get out from under microsoft before the whole house of cards implodes.
Apple can give away iPods with computers. In fact, they are doing that now for back to school. Apple wants nothing more than to surpass Dell in sales, this could do it for them.
When Michael Dell wryly suggested that Apple should 'shut down the company and return the money to the shareholders' Steve Jobs said 'Mike, buddy, we are coming after you.'
I think he meant that. Look for Apple to make MASSIVE marketshare gains in the next couple of years (about the time all the iPhone profits ramp up.)
Dell will not be able to compete. Look at their systems now, they are the ugliest on the market.
They should close the company down and return shareholders' money (Now, who said this about whom?)
The kind of people who might help Dell are EXACTLY the kind of people Dell would never employ.
Thats normal for most companies getting old - they wont/cant change.
What would I do with Dell?
Build a new Linux desktop that works - spend a TON of cash on some young code writers and try to embrace all that is NOT MSFT.
Could not have said it better myself. The further away from Redmond they could get the better they will be.
I scratch my head and wonder why Dell didn't make their own Linux OS distro years ago. If all you make is the hardware you are a slave to the maker of the OS (MSFT).