The Curious Investor

Dell's Perplexing Strategy

My main purpose in the article is to examine the motivation behind this attempt at a brand and image change is on the consumer end. Why play copy cat in a market environment where the "luxury" model has flagged? Further, I don't believe that any mass market PC manufacturer can, in fact, create this kind of brand image. As referenced above, even HP launches its "high end" computers at price points below Apple's. The baseline Adamo is $200 more than the MacBook Air and is suspiciously similar in specifications.

Is this not a big deal because Dell is mainly an enterprise focused business? Well, I think it definitely speaks to the quality of decision making at this Company. Further, it would seem that the consumer segment is a significantly higher margin business. It would be foolish not to pursue an effective strategy there when your Company clearly ought to have the core competencies to do so.


On Mar 19 07:54 AM cloughg wrote:

> Question - I presume your stats only focus on the consumer market
> share and CPU share? 80% of Dells revenues come from business to
> business sales therefore I would expect a predominately consumer
> focused manufacturer such as apple to be streaks ahead in the consumer
> space.
>
> 2008 Stats for Dell's consumer only business - Notebook units grew
> 43% in 2008 while desktops units were down 18%. Dell grew Notebook
> units in the consumer space 1.9 times faster that the rate of the
> industry concluding that Dell is gaining market share in the consumer
> space.
>
> Overall stats (consumer & business sales) are: Apple sold 2,5million
> Macintosh® computers during quarter Q4 compared to Dell's 4.47 million
> units. Therefore despite Dells Q4 decline in market share share they
> still shipped nearly double the number of units that Apple shipped
> in Q4.
>
> In 2008, Hewlett-Packard Company accounted for 20% of Intels net
> revenue (17% in 2007) and Dell Inc. accounted for 18% of Intels net
> revenue (18% in 2007). No other customer accounted for more than
> 10% of Intels net revenue including apple.
>
> The Adamo notebook on its own is not about gaining market share for
> Dell, im sure Dell dont beleive that launching a single notebook
> will do this.
> What is it will do is re-enforce the brand and image change that
> Dell are attempting to make and will continue to make throught 2009.
>
>
> The Adamo is a consumer gimic. Consumers buy gimics as they are emotive
> buyers if Dell continue to drive innovative designs like this in
> the consumer space it will continue to change the perception about
> Dell in both the consumer and business markets which can only be
> a good thing.
>
> The real money for Hi Tech companys is in the large corps - Servers,
> Storage and services are where the big $$ sit. Not in shifting tin
> like PC's, notebooks into consumers etc - there is simply no margin
> in this area.
>
> Tell me one fortune 500 that runs on apple? None
>
> Thats why apple will never overtake Dell or HP or IBM the dont have
> crediability to play with the big boys in the market area which makes
> the real money

30 Stocks Worth Investigating for 2009

A very interesting list. Is it possible for you to explain the methodology used to assess expected sales growth and the value score?