Dell's comeback machine
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| The redesigned Dell Latitude line will offer colors, a Linux mode, and other un-Dell touches. Photo: Dell |
I'm at Dell's design headquarters near Round Rock, Texas, getting a first glimpse of the company's colorful new line of business laptops that go on sale Tuesday, and I mention that the pink looks a lot better in person than online. A Dell executive is quick to tell me why. What I've seen on the website, he says, is consumer pink. "This is business pink."
Huh? Surely this must be some sort of joke. Everyone knows that buttoned-down Dell (DELL) doesn't do business pink. It's better known for dutifully boring machines, made to order with the latest technology from Microsoft (MSFT) and Intel (INTC), at a price a corporate bean counter could love.
But Dell is doing a few things differently as it navigates an overdue turnaround. Over the past three years its position in the PC industry has gone from dominator to underdog, as shoddy customer service, weak international distribution, and outdated designs have cost it the title of global market leader. (That isn't all it cost, as investors will tell you; Dell has also lost nearly $35 billion in stock market value since December 2004.)
One of the clearest signs of change is this redesigned Latitude laptop, the company's flagship model, which will be its first business laptop line to come in rainbow colors. The laptop's core design gets updated only every four or five years, making its debut a supremely important moment. Get this right, and Dell can shore up a weak spot where rivals have taken market share, and surge ahead as corporate buyers upgrade from desktops to laptops. Get it wrong and the company can kiss its comeback goodbye. Michael Dell himself was clearly aware of the stakes a couple of weeks ago when we talked about Dell's future –he singled out the Latitude as a strategically important product.
So when I'm invited to Texas as the first reporter to see what the team has come up with, there is an undeniable subtext: Dell has something to prove.
It's understandable, given all the trash-talking Dell has endured lately. Once it started losing ground and its stock dipped, the detractors piled on with all the old put-downs: Dell doesn't innovate. Dell's marketing sucks. Dell designs machines with corporate IT departments in mind, not real people.
Back when Dell was whipping everyone in the PC industry, it was easy to shrug off the insults. Dell innovates where it matters, execs would say, in the supply chain and with its direct sales model. Now it's easy to imagine the talk is hitting a nerve.
Why? Because in a maturing PC market, Dell's traditional weak points have become must-win areas. In the early days of the PC market, when computers were expensive, every new Intel chip offered a major performance boost and every Microsoft operating system seemed to offer must-have features. Back then, Dell's IT department focus, direct-sales efficiency and price leadership trumped everything else. But these days, chip and OS upgrades are no longer major events, and PCs are mainstream enough that much of the growth is in the consumer market, and consumer trends even influence business purchases. Now, design, innovative features and broad distribution matter more than price cuts, and Dell is scrambling to adjust.
For instance, Dell realized its designers can no longer craft Latitude laptops simply to satisfy IT managers. Design director Ken Musgrave tells me that as tech-savvy Gen Y'ers have entered the workforce, they've brought a sense of digital entitlement; they don't want to use equipment that isn't cutting edge and cool, and Dell's brand doesn't have credibility with them yet.
"They're coming in having had a cell phone when they were 12, having had a MySpace page through high school, and they're used to having things their way," Musgrave explains. "They're not making the purchase decisions yet, but they will be."
The diminutive cherry-red laptop he sets on the table in front of me a few moments later should go a long way toward getting Dell some street cred. In development this model was code-named "Mini Cooper" I'm told, and as weight-conscious engineers put it together, they tracked each component on a spreadsheet and obsessed over how to trim excess grams to meet a weight target. (One weight-saving move was to strip the metal casing from the laptop's flash-based storage drive.) The payoff: it tips the scales at just a kilogram – 2.2 pounds. (A full range of Latitude sizes is available.) When I ask why the fixation on a kilogram, they shrug. It was just the goal they picked, they say. To keep them focused.
I'm used to seeing this kind of design daring from Apple (AAPL) and Sony (SNE). But Dell?
"Dell's laptops probably were stockier than average in the past, so it had more ground to make up," says Roger Kay, CEO of consulting firm Endpoint Technologies, who was also pre-briefed on the new Latitudes. "I think these might actually beat some expectations." They should also blunt Hewlett-Packard's (HPQ) efforts to steal away corporate customers.
There are some surprises beneath the surface of the Latitude line as well. One is an optional Linux-based low-power mode called Dell Latitude On, which boots in two seconds. It offers more than a day's worth of battery life for basic tasks like web surfing, Exchange e-mail, and viewing e-mail attachments, and runs on an ARM-based (ARMH) chip rather than the main Intel processor. (HP and Lenovo laptops offer similar Linux modes, but with fewer capabilities.)
Another is a Broadcom (BRCM) chip that brings stronger security to the laptops by handling encryption on the hardware. But the clincher seems so simple, it's a wonder no one had done it before – a door on the underside of the laptop that, after you remove it by loosening one screw, offers up all the major components for quick maintenance. One engineer told me that despite all the other bells and whistles in the new Latitudes, the easy-access door is what got one Fortune 10 IT manager's heart pounding during a recent show-and-tell.
All of which bodes well for Dell's chances of extending its comeback with the Latitude launch. The company seems to be doing everything right – courting Gen Y, minding design, and still managing to keep IT managers happy.
Well, there are a couple of kinks to work out – and the sooner the better for the company's revenue and buzz. I'm told during my visit that Dell Latitude On won't be available until a few weeks after the launch, because there are a few issues to iron out still. And – darn it – Musgrave tells me that engineers are still puzzling over how to get paint to consistently stick to the Latitude's magnesium skin. Which means we'll have to wait for the promised range of rainbow colors.
And I was so looking forward to business pink.
This is mainly a reply to Fred's comment. Long story short, you shouldn't be buying a factory build in the first place if you are looking for a gaming machine. You should be building your own box. You are going to get your wallet cleaned out looking for a gaming machine regardless of which manufacturer you buy from.
I will never buy a dell. These machines are sold only for suckers. They purposely price differentiate consumers by making the chassis not accept certain parts. So if you buy a low end CPU but want a nice GPU forget it.. you need to upgrade to their expensive gamer line machines so DELL can rape your wallet.
I will definitely check out the latest Dell innovations when I shop next for a computer. If you customize them appropriately, they are the best deal for the money. Mine are quite fast! I have bought 5 dells to date, and am very satisfied.
FYI to the Mac'ys out there -
Only 17% of college students are choosing Macs this year. Apple does not come close to parity, even with Gen Y. They were only able to grow by offering windows compatibility, a smart move, even if the Mac OS is technically better.
I bought a Dell 10 months ago. they had to replace the motherboard in my laptop. took the service tech 9 days to get to my house and do the repair.
This was on next day service? After many years of being a Dell Dude, I do not think my next one will be a Dell dude.
Dell= lame service
All Dell Latitude Tech support is based on the mainland with Teir 1, 2 & 3 depends on what support level upgrades you do for. It's the consumer range Inspirion & Vostro are supported in India. Hence you pay more for the business range. You paying for better customer service and better consistency of built.
You don't get a DVI connector on the new Latitude because it comes with the latest technology "Display Port". This is where display connectors are moving over the next few years.
And if you purchase a laptop in "Cost-CO", wouldn't anyone expect the specification is of "low-spec" to meet the "Low Price".
We exist in a blame culture and nobody appreciate what anyone does anymore. If you have so many ideas, go take a pen and a bit of paper and make your own and see how long it would take you to be the next Michael Dell.
In the past I'd owned two VAIOs, but I bought a Dell from Cost-Co last year, because the price was good. Big mistake. It's far slower than the Sonys were, and there's nothing it does particularly well.
mmmmmm, not quite yet, but a decent first step.
If you want Americans and corporations to burn money they don't have this isn't even close.
Until dell brings support back to the mainland instead of foreign countries that do it for pennies, their support record will continue to fall. Plus, I just looked on the dell site for the latitude's specs…I cannot believe they still HAVE NOT put a DVI Connector on this product. I called dell once about DVI and they said oh its a lack of space…BULL SH*T! Apple's ibook which is small has a dvi, even acer for sake has one.
I purchased a Dell years ago and have used them in my office for years. I will never by one for home again. I won't say that about work because I don't make all of the decisions. My experience with Dell tech support was so horrible. Their tech support consists of some guy that knows nothing about computers sitting in front of a computer screen reading a script. They gave me the run around so much when I had problems with my machine. They replaced the mother board three times within two months. It's likely the fix was a simple software issue, but since they don't "service" software they just proceeded to replace the same component over and over again (because every time I called tech support read the same script off the computer) until ultimately I demanded a new machine. Fortunately, after many phone calls, I was able to get them to send me a new one. My last home purchase was a Mac. It has been a fabulous experience. It is slightly more expensive than a Dell, but now that I have seen the light I would gladly have paid even more. Their machines and software are just superior at least for a home machine. I hope Dell can turn it around, but they won't ever be getting me back as a customer.
All the Mac Fanboys and MacSheeps are in full force here. S Jobs is laughing all the way to bank by suckering you guys. Dell on the other hand gives good machines at a very decent prices. And don't put a blanket statement like "Gen y" is all Mac. "Gen Y" who are MacSheeps are all Mac. I can't imagine standing in a line for six hours so that you can pay to buy a iPhone.
Mac = Only for Fanboys
Once again Dell misses the mark. Dell's product and pricing are fine. To semi quote a former president "It's the customer service stupid." Until Dell corrects their anti-customer policies and standards they will never recover the lost customers from the past several years. I have gladly paid more than I could have with Dell just because Dell's customer service was absolutely horrible to me personally and my business. NEVER AGAIN
I would line up for hours to buy a Mac if it offered a laptop w/ similar features with a Dell, at the price of a Dell.
As long as it's running Windows, it's still the same helping of in-your-face McAfee and Norton alerts, spyware, popups, dancing paperclips and puppydogs. Gen Y needs to wake up and get themselves a Mac. Everyone I've converted to Apple says they don't know why they put up with Windows for so long.
Attn DELL:
Another thing you can do to help sales of this is to NOT force the customer to have VISTA on it, like they do at BEST BUY, Circuit City, etc. If I want to use WinXP or Linux, I should be able to and I should be able to load it myself and configure it they way I want to. I have not upgraded to a new PC or laptop yet because everywhere I go, you don't have a choice, you are stuck with POS VISTA.
If you design a laptop to be serviced by removing one screw and panel on the outside of the case it introduces two problems of two problems.
First, a single access screw is a single point of failure. It is more likely to fall apart during transport by a Road Warrior.
Second, it makes it easier for someone to steal and walk away with an internal drive.
Easy acceptance of rapidly changing technology isn't all roses. Accepting innovation is not the same thing as making progress. Fortunes have been lost due to innovative bookkeeping and innovative financing of homes.
Unlike business tools, the design of gadgets is based on increasing initial sales not usefulness or life cycle costs. Reducing product losses, improving reliability and satisfaction of gadgets reduces total sales and profit.
Gen Y was raised to expect the consequence of breaking or losing a gadget that they don't pay for, to be getting a newer and better free gadget.
If everyone ever realized that they pay for the cost of constantly replacing business gadgets in the form of reduced wages, they might start to think in terms of what they actually need to do their work, and be less impressed by features, packaging, bells and whistles they don't actually need.
We applaud DELL for finally taking a new innovative approach. In fact, DELL awarded our company a TOP 10 INNOVATION for small mobile businesses (link at the bottom of my comment). The key to success with the younger generation buying mobile devices is not only how cool looking, light weight, fast or inexpensive a product is, but rather "what does it do for the customer". DELL, as well as any other company pushing new devices should seriously consider what products are bundled into the computer for the consumer, with these products being exposed equally as opposed to being viewed as just an add-on. For my example, http://www.MyOnlineToolbox.com simply targets a contractor who needs to run his business while he is constantly mobile. The marketing departments have to be more strategic than ever if they want their products to gain traction since they are viewed as a commodity by the evolving generations.
To Mr. Bowers,
I am not exactly sure what "customers" you are referring to when you say 99% are tied to OS. I would argue that over 80% of people are running windows, or have for most of their past. Even if Gen Y is the target market you are referring to, it hasn't been until recently that the Yers have been buying up Macs; I would bet that a majority of them grew up with Windows. I can't argue the fault of backing Windows, but I think your perception of what percent of the public is tied to OS is quite off.
Does the Dell Latitude has the built-in microphone this time? Dell disappointed many buyers without that features last time. I hope they learned their lesson this time.
What some people fail to realize is that the Latitude brand is aimed directly at the business market, not the consumer market.
As an IT Manager, I look for security, durability, weight and reliability for my end users when purchasing laptops, basically everything Lionel mentioned earlier. My end users are extremely picky about weight and reliability so I have to make sure I get it right or I'm out of a job. The past Dells have been bulky and cumbersome not to mention heavier than their competitors, hence my switch to HP.
If the Latitude is Dell's core market, then people like me should kept in mind. As the typical consumer will buy 1 or 2 machines, I will buy 75+ of these machines at a time it they pass muster. Add that number up over hundreds of IT professionals which have the same purchasing power (or greater) that I do and see what's at stake with Dell.
For some of you wanting snazzy colors and sleekness, go get an Inspiron or XPS, which is aimed at the consumer market.
For Dell, it's an upgrade long overdue.
No question that this product will do well as it is quite a deal better than what has been out there for some time. But Dell could take a couple of suggestions from companies like Apple. Instead of offering what seems like literally dozens of different laptops, they should focus on doing just a few, but make them spectacular. Trying to be all things to everyone is not a strategy that pays off in the long term. GM for decades grew its product lineup while companies like Honda, Nissan and Toyota took over the market by providing just a hand full of products — but doing them exceptionally well instead of having a lot of mediocrity with a couple of stars here and there. I think if Dell succeeds in that way, they can be more focused, more profitable and continue to own a growing share of the PC laptop space.
Yup, just get out the credit card to buy one of these latest 'toys'. Can't afford it?? Just put on credit card and expect either parents or govt stimulus to pay for it.
Of course these gen y trend whores would rather starve for a week than go without the latest ithing or latest laptop computer.
Sure is healthy sitting on your butt all day in starbucks 'burning CD's on a computer right
I hope they have improved latitude.I have one now and is a piece of crap with out a service contract.Little over one yr of service I have lost motherboard,harddrive and battery.
I agree with Nathan Bowers 100%. The majority of a user’s satisfaction comes from using applications on the computer, which is the responsibility of the OS. Dell likes to hide behind the fact that they did not physically create the OS and ignore any responsibility of providing support to the consumer. Until Dell recognizes the fact that THEY received the consumer’s money for the hardware and OS and THEY should be responsible for OS support as well, they will continue to have unsatisfied customers and continue to foster the spread of negative feedback in the market place.
Have no fear ,Dell financial services will screw it up for them.they have ticked so many people off ,like myself ,that they will NEVER return to DEll.I have purchased ALOT from Dell over the last 5 years ,and the morons at DFS have dumped on me forthe last time.NOW im buying a MAC.Good luck DEll-your gonna need it.
My last PC purchase was a Dell-Ubuntu Linux desktop. Ubuntu is great, the hardware is so-so. My next PC will be a Linux netbook. I expect Dell will sell Linux netbooks like they do other Linux PCs, only if the customer searches hard to find it.
@Doug: I have to disagree with you a bit on this one. There's more to these laptops than just a few different colors.
You can tell these machines are built for durability besides looking good. Even though they are lighter than our previous generation machines, they feel solid. Things like USB PowerShare that let you power mobile devices via the USB port when the notebook is powered off isn't something that Apple offers. And Apple also doesn't offer the same level of security features that we do, and that's important to a lot of businesses.
I think we're heading in the right direction with products like these and things like the Studio Hybrid. And there will be more to come.
Thanks,
Lionel Menchaca
Chief Blogger, Dell Inc.
I sincerely hope the new Latitude is offered in a format just like Vostro… no trialware. That one feature (or lack thereof) will make the decision for me.
Scott Kersey
blog.kerseyscott.com
Dell, HP, and the rest all face the same problem: they're tethered to Windows. When 99% of your customers' experience is tied to the OS, and you've ceded control of that experience to a bumbling giant like Microsoft, be very very afraid.
Note to PC makers: hardware differentiation is too marginal to save you.
Ken Musgrave's insights about his target audience speaks volumes about the difference between your typical PC house and Apple. Musgrave has this mental image of the guy he THINKS he can sell this laptop to. Apple, on the other hand, gets an idea in its head that just strikes them as the right thing to do, regardless of any one individual. As Steve Jobs famously recounted, Henry Ford was once asked why he didn't listen to his customers when he designed his cars. Ford responded "if I had listened to my customers, I would have built a faster horse."
Dell's idea of innovation: paint the horse pink.
Dell exhibits no vision, as Musgrave's statement proves. That is why the newest Latitude line is yet just another "me, too" addition to an endless string of mediocrity.
Great article… it looks like Dell is doing everything right.
I'm a Mac fan, but I feel this time Dell is really on to something.
I got to admit that taking a look at a couple Dell products got me surprised.
Steve Jobs and his Apple crew should start pricing their products right!!!
It's not only about Dell laptops but desktops too. Some are cool!!!
And those new products are greener, more affordable… check this:
With alot of people getting laid off I was shocked to have Shaun ex2167169 tell me I was Malicious two times when I called to ask why I was not getting what the picture shown in the AD.He was so rude I canceled a 2000.00 order can not get anyone from the company to call me or e-mail about this from the company.I am getting from fedex and ups the order that I canceled 4 days ago.And know they want 45.00 to send back.also sent e-mails to his boss no reply his name is Selly Shoulin.I wish MR. Dell could see why a Great company starts to have problems with employees not caring.And I was on the phone for two hours doing this.Not Kool