Me Too Phone: Dell to Release a Smartphone?

meetooThe WSJ reports that Dell is about to release a cell phone, possibly as early as next month.  Dan Frommer says it might be called the MePhone, and has a rumored release date of 9/9/09.  9/9/99 would be a better date, and here’s why.

First, the train has left the station.  And the iPhone is clearly the locomotive.  Far behind, but still hanging on, are RIM’s Blackberry Storm (if you’re thinking of buying one, click that link and the intro will send you scrambling towards the Apple Store) and the various Android devices (which have Google’s mojo, money and applications behind them, mainly to get more Google apps into use).  The once thought to be dead Palm prepares to attempt a comeback with the Pre (a silly name, but who knows, maybe it will give the iPhone some much needed competition).

When the Storm came out, there was a little buzz, but not a fraction of the buzz that surrounds even a minor iPhone update.  In the following weeks, the press and reviews were mixed, at best.  I work in the most Blackberry-centric industry there is, and I have seen exactly one Storm in the wild.

Even with Google behind it, the Android buzz came and went, almost without anyone outside of the tech blogosphere noticing.  The Pre is getting some attention, partially out of surprise and partially out of hope.

But in the end they are all playing for second place.  Or in Dell’s case, fourth or fifth.

The iPhone/Apple cult combination has created such tremendous loyalty and raised expectations to such an lofty extent that it would be almost impossible for any new device to measure up- much less blow people away.  Sure, I’m in the iPhone/Apple club, but a true competitor would be the best thing that could happen for consumers.

Yes, competition would be the best thing.  About the worse thing, at least for Dell, would be to toss out a “me too” handset just to get in the handheld game.  Dell already tried to compete with Apple in the MP3 player space, only to beat a hasty retreat.  Last year there were reports that another attempt was forthcoming, but that attempt was delayed.  I have no idea what the plan is now.

Remember the Dell Axim?  Me neither.  Dell entered the cooling PDA market in 2002.  And withdrew in 2007.

As computers complete the inevitable transition from beloved high-end electronic device to taken for granted low-end commodity, I suppose Dell has to follow the money and the margins.  But unless they have beat the odds and created something that is revolutionary, or at least evolutionary, and not at all devolutionary, it’s not going to work.

I hope I’m wrong.

Why HP is Kicking Dell’s Ass

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I’ve been a Dell guy for a long time.  Until I started building my own desktops, I bought a series of Dell desktops for me and my wife.  My first three laptops were Dells.  We used to have Dell desktops and laptops in my office.  I recommended Dells to teens of people who came to me for computer advice.  I am a long time Dell shareholder.

But the fact is that HP is kicking Dell’s ass.  Here’s why.

My office (which has thousands of computers) switched from Dells to HPs a year or so ago.  I have asked several of my friends who work for other big companies about their experience and, while Dell still holds a lot of market share, it is clear to me that HP is gaining share.  HP has the momentum for business users from what I see and hear.

When the power supplies started exploding on my self-built primary computer, I decided to buy a second computer to use as a backup- for both data and use when my primary computer is doing its fireplace imitation.  I went to Micro Center and looked around.  It was all about HP there.  I looked at a nicely priced HP Media Center computer and then came home to buy a Dell online.  I couldn’t find one I liked as well as the HP for the same or a better price.  I went back to the store and bought the HP.  It has worked like a charm, even through a Vista upgrade– and I didn’t have to wait for it to be manufactured and delivered.

HP has a virtual lock on retail shelf space as far as I can tell.  If he wants an HP,  Average Joe has to pull into the first computer store he sees.  If he wants a Dell, he has to go online, build it, send his credit card information into the big, scary internet…and wait.  Traditionally, Joe might be willing to do this, because he got a better bang for his buck and better technical support.  Dell seems to have squandered that giant advantage.

Next, my wife wanted a new computer for her birthday.  She uses computers for email, Photoshop and light word processing.  She told me what features she wanted.  I found another HP desktop that had exactly what she was looking for.  The price was right, and again I could buy it and bring it home right away.  Suddenly I had more HPs than any other brand of computer in my house- that was a weird feeling.

Finally, I decided I needed an alternate to my trusty Thinkpad X41 Tablet to take on business trips when I need a CD/DVD player and a little more H(orse)P(ower).  I looked at Dells, but the ones I liked cost more than I wanted to spend.  So one day I’m walking into a CompUSA to buy a useless Windows LifeCam (which managed to crash Vista and never worked once- more on that later) and I see this huge, 17 inch widescreen HP Pavilion laptop (model no. dv9225us).  Vista Ultimate, 64 bit, 2G of RAM, built in webcam, very nice speakers, HDMI output, etc.  For less than $1500.  Other than the unavoidable 64 bit compatibility problems (some applications aren’t compatible with the 64 bit version of Vista), this is one heck of a laptop for the money.

In sum, it looks to me like HP has the momentum across a very wide spectrum and in a very big way.

Momentum that changed me from a guy with a house and office full of Dells to a guy with a house and office full of HPs.  Sure, I feel a little disloyal, but other than that, it was a no-brainer.

And, yes, I bought that laptop.

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Dell's Dilemma

I can’t argue too much with Nick Carr’s take on Dell’s problems. I think Nick is correct that the support side of the business is dragging Dell, and its profits, down.

But I think there’s even more to it. Part of it isn’t Dell’s fault and part of it is.

The part that isn’t Dell’s fault is the fact that Intel and Microsoft aren’t doing their part to get new technology out the door that will spur lots of users into computer buying action.

The part that is Dell’s fault is the fact that Dell has become one of the giant companies it was created to slay and its regrettable decision to try to go cheap and off-shore where support is concerned. Most of the people who buy Dells are not computer geeks- at most they have read in the trades that Dells have traditionally been reliable and well-supported. These people have trusted the Dell brand, not so much for the cutting edge technology as for the reputation for reliability and good support. For Dell to take the cheap route where support is concerned is, to put it mildly, not taking care of the goose.

Adding to the problem is that Dell’s notebook line is faltering at a time when more and more businesses are moving to laptops. My firm just replaced our Dell desktops with HP laptops. From what I hear and read, I suspect some other large companies have done so as well.

Back in the day, buying a Dell and not a Compaq or an IBM was a little bit of a rebel move- and Lord knows the establishment-hating computerites of the world are always willing to take a shot at the man. Unfortunately for Dell, it has moved from the right side of the table to the wrong side. Now, along with Microsoft and Intel, Dell is the man. Its former place is now occupied by a new generation of small shops, who take their own shots at the man by building generic (but, generally speaking, quality) machines with AMD chips and Linux operating systems.

Making matters worse is that all of this is happening at the same time the desktop computer market matures, making computers less about tech and more about commodity.

Given that, Dell has to figure out how to make the transition from tech company to commodity company. In 2006, Dell has more in common with Ford or GM than it does with a tech company.

Making money in commodities is almost entirely a contracts and cost business. I think that explains, but does not excuse, the failed attempt to cut support costs.

It’s going to be a tough ride for Dell, but Dell is not without some advantages.

The advantages in the direct sale approach are still there. It costs money to operate and maintain retail distribution channels. Plus, Dell is expanding its services into storage and IT services. Its experience in building quality equipment cheaply will serve it well in those areas too. And there is still growth to be had overseas.

I still recommend Dells to my friends who ask. But I have to admit that, other than one trusty Latitude I keep around for guests, none of my current computers are Dells.

DISCLAIMER: I am a long-time Dell shareholder.

Dell Blowing Up in Japan

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When I saw the headline, I was happy. I am a shareholder and thought it meant blow up as in take off. You know, similar to bad like Shaft and all that.

As it turns out, it really blew up- as in exploded.

It seems that at some conference in Japan a Dell laptop suddenly exploded into flames. Granted, my Dell laptop sometimes feels like its on fire when sitting on my lap, but thus far I haven’t been able to cook over it.

I suspect a faulty battery was to blame.

This is not the first time Dells began to spontaneously combust.

But don’t look for another fire sale.

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Dell Holds the Junkware

Before I starting building my own, I was a big fan of Dell computers. I bought 4-5 computers and a laptop from Dell over the years. When I am asked (as I am often) by friends for computer recommendations, I still suggest Dell desktops (and Thinkpad laptops).

bloatwareOne annoyance with any new computer is all of the junkware they pre-install on it, likely in exchange for payment from the vendor who hopes against hope you will buy the full version of the crippled junkware version that comes pre-installed.

Dwight Silverman reports today that Dell has added an option to dispense with the junkware. This is great news, and if you buy a computer you should always select the “no preinstalled software” option, if available.

Windows, an anti-virus program and any Office products you buy will still be installed. But you won’t get a bunch of crippled bloatware and offers for ISP services you don’t want.

Kudos to Dell for doing this.

Dell and Google in Bloatware Venture

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I know it’s hard to believe after my spit take on the new Google internets and my resounding yawn in the face of Gmail chatting, but in general I really like Google. Or at least I did until it started spending billions on stupid ideas.

Now that I’ve gotten that out of the way, let me tell you the other reason why I think this new Dell/Google deal to get Google software pre-installed on new Dell computers is bad news. Henry Blodget has already covered the financial side of things.

It’s bad news because the very last thing in the world- and I mean the very last thing- Dell needs to do is pre-install more bloatware on its computers. There are far too many trial versions and thinly disguised ads on new Dells now. Dell has been criticized for this before. In fact, excessive bloatware is one of the reasons I stopped buying Dells (and other brands) and started building my own computers.

Here are a couple of rules that should be mandatory for every computer manufacturer:

1) Except for a very few major things like anti-virus and anti-spyware programs, don’t pre-install any trial versions or other disguised ads on new computers. Either give us a the full, non-crippled, non-expiring version of something or don’t give us anything. No one believes this is anything other than a disguised ad.

2) Other than an internet browser, don’t pre-install anything that we can download for free off the internet. I probably don’t want that stuff and it’s easier to add what I want than to remove a ton of bloatware. This applies to the Google software that will be stuffed down our throats under this new arrangement.

I use and love the Google Toolbar. But I prefer X-1 (even though I have to pay for it) over Google’s desktop search. And just because Google will pay Dell to pre-install a bunch of junk that third party vendors pay Google to include in the bloatware package doesn’t mean it should be stuffed onto my new computer.

Everybody gets paid in this caper except for the person who pays for the computer. He or she has to either spend hours removing or pay some computer geek to remove all the stuff he or she doesn’t want. It’s an entire industry designed to screw over computer buyers in the name of a few dollars. Anyone who thinks this is about helping the consumer is living in Google fantasy land.

And don’t even get me started about the Google Pack. If I want that stuff (most of which I most definitely don’t), I’ll go get it. Do not pre-install any of that stuff on my computer. None of it.

The Dell/Google deal is a bad idea for Google (too expensive) and for consumers (even more bloatware). Dell, of course, makes out like a bandit, but at the expense of its customers.

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