Apple's computer business may or may not thrive over the next decade, but beware the false dichotomy where the choice is between Apple thriving or Dell thriving. Dell is in the no-man's land where it actually isn't the cheapest supplier, as FSJ explains so sweetly, it has burned its customer loyalty, and it certainly doesn't have any cachet. And finally, they are at Microsoft's mercy, and the Vista debacle hurt them terribly. They needed an OS that would be a killer app: something that would drive customers to upgrade their hardware just to run Vista.
Without that, where are they going to find explosive growth? Music players? Anybody remember the Bic Lighter^H^H Dell DJ? Flat screen TVs? Selling American PCs to the growing Chinese market?
I can't tell you whether to go long AAPL. But I admire the balls of anyone going long on DELL.
The real genius and power of China lies in its armies of low-cost and brilliant engineers. Seen a Lenovo box lately? Heck of a lot nicer than anything Dell is pooping out from its factory in Round Rock.
Yeah, right. AFAIK all Lenovo engineering and design is done in the same ex-IBM engineering US-based campus and I am personally get scared every time new Thinkpads come out, because when Lenovo transfers engineering to China or/and turns into Dell, there won't be any usable laptops anymore and I'll have to go back to a self-made desktop PC.
Sorry Apple, but your keyboards and touchpads aren't in the same league with http://kontsevoy.com/ultranav.png and Dell... let's just say they'll never bounce back.
Lenovo is already making the Thinkpads suck. For example, they use shitty LCDs because they have some pride issue buying components from Japan and Korea, and therefore get second-rate LCDs instead. On my T61, there is a slot for an xD card (which my camera uses), but for some reason Lenovo has disabled that reader in hardware. It shows up in Linux, but can't read the media. What the fuck?
Anyway, the hardware is solid, but Lenovo is pulling a lot of crap that will probably prevent me from buying another Thinkpad. Dell and Apple both suck for other reasons, unfortunately, making it impossible to get an acceptable laptop. sigh.
I've been really pleased with the quality on the Dell XPS line. Comparing it to the new T61 I got for work, the Dell seems better in every way with the exception of the lack of a force mouse in the middle of the keyboard.
They're not. You can get custom machines from www.powernotebooks.com, and their prices do beat both Apple's and Dells.
I also recall the press release when Asustek won the contract for Apple's MacBook... though I don't remember whether it was Acer or Crown that won the contract for the MacBook Pro.
I am not saying that other manufacturers are not capable of building stuff that way. But they don't let you assemble your desired PC via web. OK, except maybe for powernotebooks, but I don't know them well enough to trust them yet.
Dell makes cheap functional machines. Apple makes expensive consumerist lifestyle fashion. In the current economic environment Apple is a better short than Dell.
Dell makes machines with limited design value add, Apple makes machines with substantial design value add. ThinkPads, for example, also have design value add -- not because they look pretty (most people think they don't) -- but because (like Macs) they're lighter, smaller, and have better battery life than equivalent-power Taiwanese white box systems.
Toshiba and Sony also make machines with design value add. Dell, not much. Gateway/Acer, not at all. HP, maybe more than Dell, but not especially.
Ten years ago, almost all the market was in generic desktop boxes, and notebooks were a minor category. Dell's manufacturing and supply chain expertise allowed them to differentiate their systems through cost savings and through rapid production of customized systems. They could carry a few more components and sell people better boxes just by swapping in the right components.
Now, the problem is that generic boxes are purely a low-margin commodity, and all the margin is in systems that are actually engineered. Macs. Thinkpads. Elaborate gaming systems. Stuff where you don't just switch out a part or two and call it a different box. And that's not Dell's game.
Having seen the widespread use of Dell in some larger corporate accounts, I feel bad for the employees who are forced to use such terrible machines with such terrible service. Plastic parts and poor design lead to machines that feel flimsy and break often.
With service contracts outsourced to Bangalore (or other off-shore or off-site locations), users of Dell equipment at these corporations are becoming more and more flustered. They can't get their machines fixed in a timely manner, and are locked in to long-term contracts negotiated by executive board members who don't use the machines on a daily basis.
When you say that Dell makes "cheap functional machines", I'd argue that they're simply in the business of making cheap machines these days. Functional machines, I'd argue, would be able to withstand the rigors of normal (10hr/day) usage.
One of the mains reason Apple succeeds today is because their equipment works. Lenovo is also succeeding, despite its ties with Microsoft. (Also, it doesn't hurt that Apple has stores all over the country where you can get live, in-person help with your machine.)
Good observation, bad conclusion. If Apple had to sell as many computers as Dell to survive, then maybe it would overextend its market and be worth shorting. Since Apple sells relatively few computers, there are lots of people who settle for a Dell but dream of an Apple. If your customers would jump ship the first chance they get, you're not a good long bet.
apple's "expensive consumerist lifestyle fashion," as you call it, is now the de facto standard hacker machine, used by dhh, the inventor of ruby on rails, by pg himself, and too many others to mention.
You're confusing Macs-the-hardware with UNIX they run. Yes, all hackers work on UNIX of some sort. And even then, OSX requires a quite a bit of work to get it up to Linux levels of hacker friendliness.
dell may make functional machines, but they are not cheap. maybe cheaper than apple, but u can already see Asian companies starting to beat dell at their own game
Without that, where are they going to find explosive growth? Music players? Anybody remember the Bic Lighter^H^H Dell DJ? Flat screen TVs? Selling American PCs to the growing Chinese market?
I can't tell you whether to go long AAPL. But I admire the balls of anyone going long on DELL.